Mortgage Help!

rscosworth

Guys,

Current situation,

Myself and the girlfriend have a flat, we owe 58,500 over 22yrs on our current mortgage, we have a current deal with Northern Rock which has 1yr to run and we are currently on a 2yr fixed at around 4.6%.

We have seen a house and will be putting in an offer tomrrow, northern rock has advised that we have good credit and would be able to borrow up to 4.6 our joint salary (joint 43,000)

Our current property should sell for 95,000 (quiet possibly more). And would use 20,000 deposit on the 158,000 we are offering.

We plan to take out a mortgage for 140,000 over 30years.

We have worked out the payments etc and can afford to pay up to £880 a month mortgage.

The question i have is, do i stick with my current deal for the year and then change to something longer 5/10/15yrs, do i buy out of my current deal and sign up to a 5/10/15yrs straight away.

Im not very financially aware, as in, i do not know what effects the mortgage rates etc, i have no idea if they will go up or down, i have no idea if they will be 15% in a years time and will have to struggle to pay the mortgage (soups and pudding time!!!!)

Opinions please,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,,

Thanks :A

Mr_helpful

This would depend on what your current terms are. You could take the deal with you and take the top up on a no redemption fee deal until you are penalty free or it might be economic to pay off the fees and start again but you are unlikely to get anywhere near the 4.6% you are currently on

dwight-van-man

Hi, NR's policy on porting is that as long as you are on one of the flexi deals (which it sounds lik at that rate) and not a cashback or the cheap deal with the five year tie in, you can top up to the new loan required on the existing deal, so your entire borrowing will be on the one rate, with the same product end date. It should confirm this in your offer papers.

rscosworth

dwight-van-man wrote: »

Hi, NR's policy on porting is that as long as you are on one of the flexi deals (which it sounds lik at that rate) and not a cashback or the cheap deal with the five year tie in, you can top up to the new loan required on the existing deal, so your entire borrowing will be on the one rate, with the same product end date. It should confirm this in your offer papers.

Yes, were on a fixed rate deal till May 2008,

My question is, am i better buying our of my current deal and going to a 5/10/15 yr fixed (6.5-7.5%) or run with my current deal and get somthing longer term next May!!!! Any idea what will happen with the interest rates over the next year?

Cheers

poppy10_2

rscosworth wrote: »

Any idea what will happen with the interest rates over the next year?Cheers

Well, currently the markets are expecting one more rise to 6% sometime this year, and then for rates to remain at 6 or 6.25% through 2008 before falling again.

rscosworth

poppy10 wrote: »

Well, currently the markets are expecting one more rise to 6% sometime this year, and then for rates to remain at 6 or 6.25% through 2008 before falling again.

anyone else have any opinion on this? also, what is the current mortgage rate? cheers

homer_j_3

My view on it would be if I was you - take the existing rate with the top uo as dwight explained - NR brilliant for this. That would give me time to adjust to the new increase payments.

I would look at overpaying to the maximum budget that you can afford and your product will permit so you can get used to paying a higher amount. This way you will reduce your mortgage a lot quicker and you will not feel the pinch when the deal comes to an end.

That was if it was me though - you have to try and think about what you would do...