Remortgage needed, dont know where to start.

austmanic

Hi,

We purchased a run down property in april/may with the attention of doing it up as it was the only property we could afford at the time.

With all the mortgage increases we have just recieved a letter stating the mortgate has now gone up to £417 a month (originally £365) & we are really stuggling to afford this. I am due to have a baby in march & im starting to wrry that when i go on maternity leave we arent going to have enough coming in to cover our payments.

Wr purchased the house for £54500 &the mortgage was for £58k to allow us to do some work. House prices have gone up strightly but with it being in such a state i dont think it will make much of a difference to the 105% we would need to borrow. We were frist time buyers & i feel the mortgage we were pushed to have wasnt the beest really for our situation but there isnt anything we can do about that now, but we really dont know where to start.

Can anyone suggest anyone?

Thanks

Ket xx

payless

Hard to know where to start-
Would you have a fee to pay if redeemed current mtg early

Why do you feel you were sold an incorrect deal

( can I guess the lender's name - does it begin with N)

austmanic

Hi payless,

We were told we would only have to pay £90 admin fee to get out of the mortgage with no pentalies. We were advised by a mortgage adviser that we would only get a mortgage through northern rock & if found that hard to believe but thought they would know the market better than me.

Ket xxx

payless

100% LTV (or more ) on a remortgage would be hard and likely too expensive to make worth while.

Might be worth getting a local estate agent to get views on properyy value , just in case its worth more. ( so long as income matched up)

A mortgage adviser should have discussed the various options with you- including fixed verus variable, and also affordability- in fact this latter point will be a major point when mortgage advice falls under FSA regulation next month.

Of course brokers might have warned you and even suggested you wait before buying or suggested a different product.(perhaps initially more expensive fixed rate)- only 2 sets of people were there- but look at his "product confirmation letter- see below)

Exit fee only £90 - ( yes some of these schemes had no actual product redemption - guess they knew many would not be in a position to leave anyway) its closer to £200 now -  not sure if it was less when you applied ( not my favoured lender/scheme , so no cases to refer back) I assume you have a printed illustration from the broker - issued before you applied, that should clear up that point. Also he should have issued a letter explaining why the product recommended was suitable and  disclosed his commission.

Did you take the £1000 "help with costs option" - that comes with a 3 yr tie!

If you wanted 100% or more it is of course possible that this lender was one of a few, if not only lender avaialble to you - again it s a route I try and avoid but know many brokers are keen on it.

austmanic

I'll give the estate agents a call later then see what they say.

She did explain about fixed & variable but she then advised that really the only mortgage we could get was a variable. My credit rating is fine but my partner had 1 debt collection a few years ago against his name, which was sorted out a year or so ago. Her idea waws that with us doing the house up we could change mortgages in a few months anyway but only after the application had gone through were we told we would 'be better waiting 6 months before we remortgaged'. She didnt suggest we wait or offer any alternative mortgage which i thought was a bit strange.

We were given a printed illustration but we werent told that the £90 may go up, infact she said it would always be £200. I feel really nieve now.

We didnt do the £1000 thing but northern rock did offer us that when i asked them about remortgaging a few weeks ago but if we were going to that the payments would have only been about £10 difference on what we were paying at the time (£30 if we did it with them now).