Low Value Mortgages

starmist_2

Ok folks I need some help - I'm in the lucky position of wanting to remortgage and due to having payed off a large part of my existing mortgage I only require a mortgage for 22k - I have been checking various mortgage deals but all require a minimum of at least 25k with many wanting more

Does anyone know of any deals (without fees) below 6.2% APR for 22k or under!! A tall order but interesting challenge

Katgoddess

Have an offset mortgage for £25,000, then put the extra 3 grand into one of the savings pots so you won't be paying interest on it?

herbiesjp

Offset may be a higher rate - you could look for a discount or tracker with no early repayment charges and do exactly the same thing - borrow £25 and pay back 3k straight away.

Prudent

I have a flexible mortgage with the Northern rock which was originally for £28,000. I was due some money and was able to start bulk repayments fairly quickly. Within the first few months I paid off £3000 and within just over a year only owed a balance of £100. There was no restriction on when repayments could be made, though I cannot pay off in full until the penality period is over.The monthly cost of the mortgage is adjusted as soon as a lump sum payment is made. Might be worth looking at an option like this. You can also redraw a lump sum payment if you want extra money for anything.

The mortgage has a good rate and this could be fixed for 2,5, or 7 years.

Joe_Bloggs

You don't say how long you want to borrow the 22K for.
You may have to borrow 25K like everybody has suggested and stash the rest. Nationwide are good value and you can over pay £500 per month from a high interest account.
A 5 year tracker is 4.95%(variable with BofE base rates) and 5 year fixed is 5.19%. The fees are £389 and you will have 'sealing fees' from your existing lender. This is not a recommendation but a suggestion given the lack of details.
J_B.

dougk_2

If you can get a mortgage for under 5% and then borrow £25k you can then put the extra 3k into an ISA and make a few quid on it - guess its a bit like stoozing with a mortgage rather than credit card!

KrazyFool

doesnt that screw up your credit rating because surely each time a CC is applied for it gets checked? so with these people who do that must have a huge list of CCs in their report. other CC companies must get wise to it? if it doesnt screw it up it damn well should do - esp when other law abiding people get refused for some godforsaken reason its damn annoying people like that can get away with it!

Fairdo_2

Like Herbie mentioned in this post and a post for 1st Time buyer in similar situation. There is nothing wrong with borrwing £25,000 initially (assuming income allows) and paying off £3K straight away. They do not have to be offset mortgages, although the contributors who have mentioned it are spot on. If you do not feel that you would want to draw down overpayments, you can do so on a Traditional mortgage like a discount or tracker without offset facility and definately No Early redemption Charge. Ideally on a Daily or Monthly Interest Rest, so that the Capital is re-calculated sooner.

Fairdo_2

KrazyFool wrote:

doesnt that screw up your credit rating because surely each time a CC is applied for it gets checked? so with these people who do that must have a huge list of CCs in their report. other CC companies must get wise to it? if it doesnt screw it up it damn well should do - esp when other law abiding people get refused for some godforsaken reason its damn annoying people like that can get away with it!

I'm sorry to hear that Krazyfool.

It is a case of getting it and using it if you can.

Sometimes, the more CC's you have, the more attractive you look to other CC companies.

I had played the game for a while and have decided personally that enough was enough.

I had built up a Total Credit Limit of close to £75,000 and did not utilise it all, but I know it can feel quite addictive. This is something CC companies hope will happen, because they want people to get in too deep, so that they can only manage to pay the minimum each month.

Some as MSE has preached to the careful can take full advantage of this, but those weeker willed like me can get stung if they don't play the game right. I took seven years building up this limit and at most had £22,000 outstanding at any particular time, but I had put £17,000 into a svaings account, so it is easy to get carried away.

Therefore, I have closed all but 1 cc now and have been paying that off and brought the savings down, along with my liability.

Maybe you have been so good with your cash in the past that you have not built up a credit history suffient enough, but if you started small with your own bank, for example, if there is nothing wrong in the past then you should be able to get acceptance on a small credit facility initially.

I personally feel it is a club I no longer want to belong to anymore, as it can be a dangerous game and I do not trust myself with that level.

The way cc companies see it is that you may not be a great customer for them if you are careful, as you may not make them much money. Hopefully, you might see that as a good thing?

KrazyFool

well i thought it was...got refused but accepted at a higher rate :rolleyes: why the hell would i want a higher rate. If i cant pay back a low rate what planet are they on to think i would be able to pay off a higher rate. i suppose they think ok once in debt always in debt. if he cant pay of a small one lets give him a bigger one knowing we can earn more money from him - no wonder this country has so many people in debt

Fairdo_2

"well i thought it was...got refused but accepted at a higher rate why the hell would i want a higher rate."

Spot on KrazyFool

I am not expert in this area (as you can probably tell from my previous post!).

I wonder whether it is because you did not have a track record, therefore, you are higher risk to them, which they will think justifies why they have offered you a higher rate.

please don't think I condone what they have done, but this is what makes the world go round for them. They are hoping to headline a nice rate and then offer as many people as they can on a higher charge, beacuse they will make more money for the same thing (unless you always pay off balance during the Interest free period)

It may be worth trying an Interest Free for 6 months promotion and see if you can get acceptance with them first. If your existing offer is the only one available to you, then it may mean biting the bullet and working on paying off the balance before interest is charged each month until you have built up enough track record to become attractive to other cc companies.

I am concerned about encouraging building up credit card debt of any sort, but if you want the credit card to be available for your benefit, then I'd say to build up slowly but surely and always be in control.