Advice for an uninformed worrier please!

SymphonicX

Hi there

It seems I have one of the last 100% mortgages, myself and my gf got our 100% mortgage in december just gone, our flat is 169k - however we are both totally debt free, no loans or cards or anything....in fact our only outgoings are bills, food, mortgage and insurances and of course travel, and it seems that we have about 600 disposable income between us with about 200 disposable income each on top of that - so my question is this: Do I need to be worrying about everything I'm hearing in the news? Do you think it likely that I will still have to worry 2 years down the line when my current mortgage fixed rate is up and I need to get a new deal?

Just for info: I am on a Cheltenham and Gloucester 100% mortgage at 6.89% (:() - literally the interest rates went up by .08% the week before we got the offer in....argh!!

Any help and advice would be much appreciated, I'm not very good with this stuff and am still learning as I go!

thanks in advance!
Trev

Dan_Collins_2

As long as you dont borrow from now and your mortgage is repayment I dont think you will have to much of an issue. You can make overpayments on the C&G 100%, I think 10% per annum. If you can afford to it would be wise to pay off as much as you cna to make it easier in 2 years.

Kez100

When we suffered negative equity we had to save ourselves out of it so my attitude is if you can save now, whether by overpaying mortgage or savings ISA, or whatever is best for you, then do. At least if you do have a problem later down the it will have been minimised. If you don't end up with a problem you have a pot of rainy day money, or a lower mortgage which will save you interest in the long run.

SymphonicX

Hello, thanks for your advice....yes, its a repayment mortgage which is confidence inspiring! Thanks for your input..now just gotta see if we can make extra repayments

dunstonh

What is happening now is just part of the normal cycle that has happened many times in history before. The problem is we have a much more sensationalist media who dumb down the news to the lowest common denominator. We also have a public that have forgotten that this happens (the property always goes up brigade).

If you make your mortgage payments and are on capital and repayment mortgage then you havent really got a problem. You are probably already in negative equity so selling up and moving is not likely to be an option in the short to medium term unless you find ways to reduce your mortgage balance (or build up a pot of savings).

The interest rate you are on is not far off the standard variable rate or tracker rates currently. As long as you budget for about half as much again on your mortgage payments then you should be fine. i.e. if you are paying £500pm then budget on the basis it could go up to £750pm. That size of increase wouldnt be expected in your case but is historically possible (as in 1990s). Probably allowing for a 30% rise is more likely.