Potential Stupid Question

Claree__x

Hi All,

I'm not very clued up on mortgages at all so please excuse me if this is an absurd question - which I fear it may be.

My husband & I live in a house which he has a joint mortgage on with his cousin (who currently lives in Poland). They bought the house in 2007 for £105k on a 100% mortgage with Dunfermline building society - I'm not sure what the rate was at the time but we have reverted to their standard variable rate of 5.19% which I believe to be pretty high?

Problem is that we have £99k left to pay on it and the house prices have plummeted meaning we're in negative equity of about £33k - going by recent prices in the street.

Is there any way we can get this on to a lower rate or is it just a case of chipping away at the capital until we're in a better position?

corkyefes

Hi,

I think, but not 100% sure, you wouldn't be able to remortgage for £99k (what you owe on the house), if the property is valued at only £75k.

Currently at the minute, maximum loan to value is about 90% and you would need higher.

Like I say, Im not 100% sure but i think while the house value remains low you are stuck with your rate.... However, I dont think 5.19% is the worst rate about.

Hope someone can help more.

Claree__x

corkyefes wrote: »

Hi,

I think, but not 100% sure, you wouldn't be able to remortgage for £99k (what you owe on the house), if the property is valued at only £75k.

Currently at the minute, maximum loan to value is about 90% and you would need higher.

Like I say, Im not 100% sure but i think while the house value remains low you are stuck with your rate.... However, I dont think 5.19% is the worst rate about.

Hope someone can help more.

That was my understanding as well unfortunately!

Thanks

Dave_the_Ginger_Cat

Not an absurd question, but I fear you may struggle to find someone to refinance at a lower rate

The rate they had at the time was reflective of the risk of 100% mortgages to the bank. As your house price seems to have dropped, the risk to them has increased if anything.

The only way you might be able to do this is by talking to the Dunfermline - but they may not be keen. You may need to stay put until the house prices have increased

hamster2013

a stupid suggestion would be for you to purchase the house next door for £70k, and hand the keys for this one to the bank.... lol subprime, where are you?!?

amnblog

5.19% is a pretty good rate for what is, in effect, a 133% mortgage.

I'm afraid there is nothing you can do to get the rate down unless your current lender offers you something (I see no reason for them to do so).

xyellowx

Hi, we planned to put our house up for sale in september (reason september ongoing loans /credit cards/gym/mobile contracts will be paid of by then)

was looking at houses the sell for around 190k and will have just over the 20% deposit raised from sale of our house afordability credit history all fine
questions i wanted to ask are
1. if we put the house up for sale now and were lucky enough to get a quick sale would we be able to use around 7k from the sale to buy a car outright (we could then return the car we have on finance back and receive a part refund due to large deposit we put on it) and go to the bank with just over a 15% deposit

2 we have the option of selling our house with no upward chain and having 3/4 months before needing to move into new house could this be used to our advantage in selling and buying and would it make a differance to getting the new mortgage?
sorry its long winded.