Are we going to have problems remortgaging

purplebiro

Hello,

Me and my best friend bought our property in September 2006.

Becuase I had past, uncleared credit problems (although nothing too severe, no ccjs) we were forced to take a sub-prime mortgage.

We are due to remortgage in September 2008 and I wondered if we are likely to face problems and whether it is likeley we will be able to get a high street mortgage or whether we'll have to look for another sub prime? We have paid our mortgage on time and without fail since inception, but the mortgage is over 30 years and is for 95% of the property value and I've read that these are the "risk factors" that mortgage providers are avoiding in the current climate.

I should also mention that I have had a few late payments on a credit card since taking out the mortgage but never for more than a month and always resolved.

purplebiro

Helloooo, anyone out there?

payless

Are you sure you can remtg in 9/08 without penalties

It was 95% sub prime ?

30 yrs- not a major issue unless it takes you past retirement

95% - does restrict lender/ rate choice a little .. perhaps it will be lower LTV by then ( repayments & price increase)

Card payments, yes this could be an issue...by the nature of things it makes you below prime client .. and makes position more difficult as sub prime lenders have lower LTV limits these days , thats not to say you won't stand a chance , try and keep a good record for the next few months , then see a broker or maybe your own bank if the current lender can't offer a new good deal

edit... I have only answered as I saw you were keen for a reply... my own business is generally low LTV/ high equity - high end stuff, so others may be more in tune with your situation.

purplebiro

Thanks, yes I am sure we can remortgage then.

PasturesNew

payless wrote: »

.. perhaps it will be lower LTV by then ( repayments & price increase)

However, if the property value has fallen, it might mean "no".

If I were you I'd look now at how much it would cost if you can't remortgage. You've got 8 months to build up your income, build up savings, take on a 2nd job, cut outgoings etc ... so you can make those increased payments when they occur. Then if you CAN remortgage at that time, you're ahead of the game!

Also check out the cost of remortgaging (mortgage arrangement fees).

As I said, with 8 months' lead in time, start planning now and you can ride it out and survive.

poppy10_2

Is it an interest only mortgage? If so, the LTV may not have come down, or may be even higher.

purplebiro

No, it's a repayment mortgage.

Is it likely that we'll have to have another sub-prime mortgage, then? My credit rating has gone up considerably since we took out the mortgage (from around 300 to 700 according to online checks), mostly due to my old mistakes "timing-out" as it were.

herbiesjp

IF you keep your repayments up on all your outgopings you could well go onto a prime deal - set up a DD for at least the minimum payment on your credit cards, this way you cannot miss them again - instant way of improving your scenario!

You may just creep in at 90% LTV which will be important if you are still classed as sub prime (although you need house prices to have gone in your favour). Also being at 90% will mean a greater choice of lenders and lower fees (as most charge a Higher Lending Charge over 90%)

What is your current mortgage balance and what is the current value of your property? Just to see what the situation looks like at todays snapshot

purplebiro

As of 01/01/08 we have £121000 o/s mortgage, obv will be more in September.

When we bought the house it was valued at £132500. there are similar houses on our street (all same in condition only difference being we are end terrace and ever so slightly more room, plus a garage - very rare in our area) on the market (and selling) at £139000. I would conservitively estimate value of the property at £140000. Houses have sold for more in the surrounding area.

purplebiro

Hello, anyone free to come back on this?

poppy10_2

On those figures you have over 10% equity, and only need a an 87% mortgage. this should make things feasible for you.