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2 year tracker is ending soon..any tips?
SCUD
Posts: 110 Forumite
Helo guys... I hope you can help me with the following case of my friend:
He is 60 and had an 11 year mortgage.
He took the mortgage deal in 2011, it was interest-only tracker rate of 2.54% including Bank of England rate.
The deal expires soon and he said that his bank paper say that the interest rate will jump to 3.99% SMR.
His broker who secured him the mortgage 2 years ago has posted him inviting him to sit again and discuss the "best" offers out there.
What things should my friend look for when he sits with the broker? should he trust him and depend on him? or he should not?
What options does he have? he - an I - a bit confused about remortgaging... does remortgage means finding new good rate without borrowing more from the lender? or what?
I mean he is willing to continue paying his interest-only payment without borrowing more money. But one of his friends told him that his house value must have increased now and he can get more money because of that.
Can someone please advise what to do when you are in this situation? any ideas or tips are appreciated.
Many thanks.
He is 60 and had an 11 year mortgage.
He took the mortgage deal in 2011, it was interest-only tracker rate of 2.54% including Bank of England rate.
The deal expires soon and he said that his bank paper say that the interest rate will jump to 3.99% SMR.
His broker who secured him the mortgage 2 years ago has posted him inviting him to sit again and discuss the "best" offers out there.
What things should my friend look for when he sits with the broker? should he trust him and depend on him? or he should not?
What options does he have? he - an I - a bit confused about remortgaging... does remortgage means finding new good rate without borrowing more from the lender? or what?
I mean he is willing to continue paying his interest-only payment without borrowing more money. But one of his friends told him that his house value must have increased now and he can get more money because of that.
Can someone please advise what to do when you are in this situation? any ideas or tips are appreciated.
Many thanks.
0
Comments
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Remortgaging is using a new mortgage with a new lender to repay the old mortgage. It can be for the same amount, more, or even less, if the borrower wishes to reduce the mortgage using savings, or some other capital.
Interest only, with just 9 years to go?
How is the capital going to be repaid?I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
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kingstreet wrote: »Remortgaging is using a new mortgage with a new lender to repay the old mortgage. It can be for the same amount, more, or even less, if the borrower wishes to reduce the mortgage using savings, or some other capital.
Interest only, with just 9 years to go?
How is the capital going to be repaid?
He says he is saving to pay the capital later.
I told him that based on his income, he will never be able to pay the full amount after 9 years, but he said that if the bank refused to extend his mortgage with the small lump sum he saved, he plans to sell the house then, so he pays the bank and downgrades to smaller house or flat.
Is he thinking right?!0 -
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Any advice guys?0
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