Your thoughts on this credit crunch

maka_2

Morning all

i want to get a general feen of what is going on in the world re this credit crunch.

We bought are first house 2 yrs ago in this july and our fixed term is up is it best to remortgage now? or can we as we are fixed to july? or should we sit tight and hope things get better by july? or last do we try and sell up?

all info very welcome as this is the first time like so many others we have been through this and have no idea what to do

kind regards maka

dunstonh

is it best to remortgage now?

No. If you change now you will have an early repayment charge.

You can start looking around May time but the switch must not occur until the current deal expires. Also, you need to check out your current lender as they may offer the best option. There may not be any deals left by then with just trackers or standard variable rate the only options.

or last do we try and sell up?

Thats a bit extreme. Is your situation one where you really need to sell up to clear debts?

maka_2

no we have debts but do manage them well however if we were to have another £150 on our mortage this would cause problems

sarkin

wait till July this credit crunch has a long way to go yet. There is talk that some of the other big American Investment banks have funding problems.

In the 70's over inflated house prices corrected because Labour let inflation go wild and helped reduce the debt, in the 90's over inflated house prices corrected whwn we left the ERM and rates whent to 15%. This time it looks like the credit bubble will burst because of CIV's not worth the money that all banks have gambled on. The money markets are closed hence the BoE offering up 5 billion the other day and 23 billion was asked for.

hope this helps and as always do your own research I did I live in rented

stoke_bishop

maka wrote: »

no we have debts but do manage them well however if we were to have another £150 on our mortage this would cause problems

(I AM NOT AN EXPERT)
Some mortgage offers last for six months, so you might like to try to find one now that does. The change can not occur until July however. As an example, I almost went for a Britannia mortgage a while when I was 4 months from the end of my fixed term. Not a problem securing a rate however as their offer lasted for six months. Once you've paid you arrangement fee, you're in, whether you actually complete the transfer of the mortgage 6 months later or not. Some offers I think last just 90 days...

dunstonh

if we were to have another £150 on our mortage this would cause problems

How much is your current mortgage payment?

I just ask because £150pm increase on a typical sized mortgage is not an unusual increase in the typical ups and downs of a mortgage payment.

sarkin

rumour out that HBOS are in trouble shares sliding 18% this morning before a slight recovery to down 8%.

Once the rumour mill starts churning no bank is safe.

beecher

dunstonh wrote: »

There may not be any deals left by then with just trackers or standard variable rate the only options.

Surely it is unlikely that we'll be in a situation where fixed rates will not be an option? Why do you think banks would stop offering them, or is more that you think the arrangement fees will be crippling?

dunstonh

Surely it is unlikely that we'll be in a situation where fixed rates will not be an option? Why do you think banks would stop offering them, or is more that you think the arrangement fees will be crippling?

Have you seen the way deals have been vanishing recently?

Fixed rates are dependent on the funds being available to offer at that fixed rate. If the funds are not available or the terms are not attractive to the lender then they will not be available or attractive to you.

or is more that you think the arrangement fees will be crippling?

Arrangement fees could well go up if the only way to offer a decent fixed rate is to offer it with no profit margin in the rate. This already happens with some fixed rates which have a larger fee but lower rate. This is great for larger borrowers but wont be cost effective for smaller borrowers.

beecher

dunstonh wrote: »

Have you seen the way deals have been vanishing recently?

Fixed rates are dependent on the funds being available to offer at that fixed rate. If the funds are not available or the terms are not attractive to the lender then they will not be available or attractive to you.

I will probably end up paying over the odds when my fixed rate ends in December, but I hope we're not in such dire straits as to be in a situation where big banks don't have enough funds to offer fixed rates at all. We're in a 'wait and see' position with the economy at the moment, and I am beginning to fear that it'll be a lot worse than any of us think at the moment, so who knows where we'll be by December.

Dylanwing

My fixed mortgage rate with SPML ends in July, and because of problems that friends have experienced in re-mortgaging, I contacted my broker a Month ago. A few days later we had an offer on a decent 5 year fixed rate, and this is valid for 6 Months. No harm in getting sorted early.