Request for re-mortgaging advice

VanDeretto

Hi there,

First time poster here, so please go easy

I am about to change my mortgage and would appreciate some advice.

Here’s a quick summary of my current circumstances:

Current mortgage: £75K (34 interest only + 41 repayment)
Current lender: Northern Rock (paying SVR of 6.74% - tied until end of July 2005)
Value of property: £150K
Current Term: 12 years + 2 months
Endowment: To cover the £34K (currently not giving me any real cause for concern in not meeting target, although this obviously may change)

I’d be looking to raise an additional £15K for various home improvements.

My current plan is to either a) move £30K to interest only + £60K repayment or b) move everything to repayment.

My first question is what is generally regarded as the rule of thumb with regards to increasing your term?

I was thinking of increasing the term from 12 years to 25 years in order to reduce the monthly payments. This is on the basis of getting a favourable interest rate for 2 years. Thereafter, I would be looking to re-mortgage again and perhaps reduce the term again i.e. from 25 years back to say 15 years. I appreciate that the sooner you pay off your mortgage, the better.

If I moved 100% to repayment, would it be advisable to keep my endowment or would I be better to cash in and invest in some other savings plan?

Apologies for the long post (especially as it’s my first).

Any advice will be greatly appreciated.

Jdubb

VanDeretto wrote:

Hi there,

First time poster here, so please go easy

I am about to change my mortgage and would appreciate some advice.

Here’s a quick summary of my current circumstances:

Current mortgage: £75K (34 interest only + 41 repayment)
Current lender: Northern Rock (paying SVR of 6.74% - tied until end of July 2005)
Value of property: £150K
Current Term: 12 years + 2 months
Endowment: To cover the £34K (currently not giving me any real cause for concern in not meeting target, although this obviously may change)

I’d be looking to raise an additional £15K for various home improvements.

My current plan is to either a) move £30K to interest only + £60K repayment or b) move everything to repayment.

My first question is what is generally regarded as the rule of thumb with regards to increasing your term?

I was thinking of increasing the term from 12 years to 25 years in order to reduce the monthly payments. This is on the basis of getting a favourable interest rate for 2 years. Thereafter, I would be looking to re-mortgage again and perhaps reduce the term again i.e. from 25 years back to say 15 years. I appreciate that the sooner you pay off your mortgage, the better.

If I moved 100% to repayment, would it be advisable to keep my endowment or would I be better to cash in and invest in some other savings plan?

Apologies for the long post (especially as it’s my first).

Any advice will be greatly appreciated.

I've just re-mortgaged with London & Country (brokers) at lcplc.co.uk. I'm not a great fan of brokers normally however, I found L&C to be very professional and organised - they can provide a recommendation or just a product, all done on the phone, so simple and convenient. They do source all lenders too! Plus their phone bak service via their website works!

Also a very nice man called Payless, a regular here, responded to my request for help, he may be able to help, I think his website is payless.me.uk but I'm sure he'll find u any way!! Good luck!