Should I be worried about when my fixed term ends?

AshDam

Me and my h2b bought our home last year. We got a Together mortgage (think thats what it was called ) through Northern Rock on a fixed rate for 2 years.
In order to get rid of some debts and allow us to be homeowners we borrowed more than the house price - 90% of the house value is a secured mortgage and the rest of the money is an unsecured loan.

What does the recent state of mortgages etc mean for us?? - When we come to the end of our fixed deal are we going to find it hard to find a replacement as places have withdrawn 100% or more mortgages??

We think house prices may have risen slightly since we bought it (judging by recent sales in the area/asking prices of houses) and we will have paid a tiny bit off (not alot I know) but I am starting to get myself in a bit of a tizz already about it (will be seeing financial advisor around Nov time to start talking about the next deal)

Can anyone explain to me whether I should be worrying like I am?????

JimmyTheWig

Worrying is probably not the answer, but I think you are probably right to be concerned.
No-one really knows what is going to happen over the next year, but it sounds like from what you have said that it would be hard for you to get a new mortgage.
If that were the case then you will have to stick with your existing mortgage. When the fixed rate finishes you will go onto their standard variable rate (SVR) which will mean you will pay a lot more per month than you currently are.

The best thing you can do is start saving money _now_. Don't wait until next year when you need to find that extra money. Start saving money wherever you can. This site is a great help with that.
Do what you can to reduce your outgoings (in essence look at what you spend money on? Do you need it? Can you get it cheaper?). Put as much money as you can into a savings account.

Then when your fixed deal runs out you will have some extra cash that could reduce the amount of mortgage that you need. With this, depending on how much you are able to save, you may be able to get a better mortgage deal.
Either way, you will have learnt to live on less money and so when your mortgage payments go up you will be better able to afford them.

Don't worry.
Don't panic.
But act now.

AshDam

Thanks for your reply there Jimmy.

Since we took out our mortgage our incomings have increased substantially (35%) and we are currently saving a substantial amount a month - but TBH these savings are to pay for our wedding next year as we don't want to get into debt with the wedding..... my parents are both contributing to the wedding too.

I will check out the mortgage and loan paperwork to see what % it will go up to if we dont manage to secure a new deal elsewhere. (we're with Northern Rock)

Only other debt we have apart from mortgage is a small car loan (got 3 years to go on that though :-( )

Having now been in house a year and contracts having gone their 12months iyswim I am about to look to change energy suppliers (hopefully cheaper) and also switching to SkyBroadband (saving £14.99 a month) Not sure what other areas we can save in - but will check out some of the other boards.

We have just started meal planning to hopefully save money on food - and my h2b has changed shift patterns which means he works weekends (so less outgoings on beer )

I am just glad we bought when we did or we'd still be stuck at my mums with no idea of when we could leave.........

Trying not to worry/panic but its all confusing me alot with the news being full of stories saying mortgage deals are being withdrawn left,right and centre......with the wedding coming up, and then hopes to start a family the last thing I want is to be losing our home......

JimmyTheWig

Will the wedding be paid for before your mortgage deal runs out?
If so, the money you're currently putting towards the wedding can pay the increase in mortgage repayments.

It's not the ideal situation but as you have said it's better than being at your mum's.
With the sort of income increases you are talking about I would imagine that you could afford the mortgage increase.

I don't see (from what you've said) that you'll be one of the ones losing your home.

AshDam

JimmyTheWig wrote: »

Will the wedding be paid for before your mortgage deal runs out?

I don't see (from what you've said) that you'll be one of the ones losing your home.

Wedding is 2months after fixed deal runs out!! Wasnt the best planning on our part eh?!!

The amount we are putting away I would have thought we would have some still to pay some off the loan if needs be......we are currently looking at various things to try make wedding costs come down...ie. making invites etc

Thanks for reassurance though Jimmy - I dont think we will lose our home - I am a born worrier/panicker......