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general remortgaging questions
saunaboy
Posts: 162 Forumite
Hello all.
I've got a 6.75% fixed 100% mortgage at the moment. Basically saw a bargain that I could easily snap up at 124k (it was worth approx 130-135k when bought compared to adjacent properties. It's not a new build by the way.) and we've made significant (and badly needed) updates/improvements. Our borrowing as proportion of joint income was only 1.95x (and falling as my salary rises, so now approx 1.85x) so in terms of 'affordability' we're fine.
It expires in Nov next year.
1) when would we be best advised to start looking? I've been told 3 months in advance.
2) what would you lot guess is the best type of deal for us? We realise that with a 100% mortgage we're on dodgy ground with respect to risks of falling into neg equity. We figured here that even if worst case scenario hit & we were forced to progress to SVR we could still easily ride it out. With our relatively cheap place & not great rate anyway, the SVR would only mean £50-70/month more at current levels. I'd guess base rate falls might ease this to some extent at least even if the crunch persists. At the moment we're in a position to make significant overpayments anyway (our current deal allows this) so not too worried about rate hikes.
We're hoping that in the light of the improvements though that this won't happen.
cheers for any advice !!
I've got a 6.75% fixed 100% mortgage at the moment. Basically saw a bargain that I could easily snap up at 124k (it was worth approx 130-135k when bought compared to adjacent properties. It's not a new build by the way.) and we've made significant (and badly needed) updates/improvements. Our borrowing as proportion of joint income was only 1.95x (and falling as my salary rises, so now approx 1.85x) so in terms of 'affordability' we're fine.
It expires in Nov next year.
1) when would we be best advised to start looking? I've been told 3 months in advance.
2) what would you lot guess is the best type of deal for us? We realise that with a 100% mortgage we're on dodgy ground with respect to risks of falling into neg equity. We figured here that even if worst case scenario hit & we were forced to progress to SVR we could still easily ride it out. With our relatively cheap place & not great rate anyway, the SVR would only mean £50-70/month more at current levels. I'd guess base rate falls might ease this to some extent at least even if the crunch persists. At the moment we're in a position to make significant overpayments anyway (our current deal allows this) so not too worried about rate hikes.
We're hoping that in the light of the improvements though that this won't happen.
cheers for any advice !!
0
Comments
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I would agree - start looking 3 months in advance - get a fee free broker to do the work for you!!
You say you got a bargain and have improved the property so do you have equity now?
I suspect with 10% equity you will get a better rate next time (though my crystal ball is no better than yours in predicting interest rates for November 2008!!)
My philosophy is that no-one should be paying SVR - the only winner is the lender. You can get discount deals with no tie in for less than many SVRs.
Depending on how you think interest rates might be moving next year a fixed rate for increasing in the future or a tracker for "I don't know" or reducing rates would generally be advisable. Get a good broker to help."The true measure of a man is how he treats someone who can do him no good."(Samuel Johnson 1709-1784)
Lots of years in financial services, still learning!0
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