NORTHERN ROCK fixed rate ending AUg08

cflarry

Help!

I currently pay a mortgage of 1060pounds a month repayment on a 167000 mortgage with NR and my mortgage comes to an end in Aug,

I contacted a mortgage advisor who said in FEB we could possibly get another mortgage interest only with Cheltenham and Gloucester for arrange fee of 999pounds and advisor fee of 450pounds...

Thats if my house is valued at 185000, if not i am stuffed

Can anyone give some sound advice...The houses on my estate arent selling


My cousins have lost their property in USA don't want to end up living in a TENT

neas

hmm, You are right to post here and try to get clued up.

Some half-facts:

1. Houses market is stalling, and starting to fall... If you could get it valued at 185k I'd fix the damn mortgage for 5 years and try and repay as much off of it as you can.. (seem unlikely as you are going for interest only)
2. If houses on your estate aren't selling then maybe they are stalling already....
3. If a House price cras has startted itll be in full swing by August so then your house would be worth significantly less

Minor questions for you:

1. What equity do you have in the house? Did you originally get a 100% 125% mortgage?
2. Are you on repayment mortgage now?
3. The potenital remortgage, how much per month would it be on interest only? And why does it matter if house is valued at 185k? Is that because you need 90% mortgage?

I certainly looks like you are overstretching yourself if you can only go to an interest only mortgage .

cflarry

I have a current 90percent mortgage
repayment mortgage,
interest only works out cheaper around 850pounds
I don't want to have to increase my mortgage with everything else going up (gas/elecy, council tax etc etc)
I think the equity is 10 percent

neas

so why do you need the house to be valued at 185k?

Basically when you bought the house if you put down 10% deposit then you had 10% equity at the time you bought it and a 90% mortgage. Right?

So you bought the house for 185k?
With a 90% mortgage of 167k?

So you want to get an interest only mortgage so you can afford gas/elec/council tax etc?. Its a risky predicament because you won't be reducing your mortgage etc. You want to paying off the mortgage not holding on by the skin of your teeth... If anything it pays to overpay a mortgage that way you owe the bank less.

I.e You owe them 100k.... you get charged 7k every year in interest (7% interest rate)
You pay 50k off your mortgage you get charged 3.5k every year in interest.


So your saying you need your house not to have dropped in value or you'd be forced onto a higher rate, or forced onto the SVR as you wouldnt be able to fix again.

If you've been paying the mortgage (capital and interest) then you've been also increasing slightly the amount of equity you own.

How long you been on your current mortgage? 2 years? 5 Years?

cflarry

I bought the house 4 years ago for 150 000 and remortgaged to 167 000 one year ago, does this help?

firesidemaid

have you made or can you make any overpayments towards the mortgage/added debt?

do you have any more debt since the mortgage? as lenders will take this into account re. affordability

neas

I see what you saying. Fixed deal is ending this august, you remortaged on what the house was valued last year and now if it drops too much you wont have much equity in the house at all to remortgage.

Not sure what to tell you, you probably know the answers, ou have 10% equity... you need 10-5% equity to remortgage at all... if house prices drp 10% then the revaluation will lower your equity such that you can't fix on any good deal.

I'd try and pump any assets you have into the mortgage or... sell up now.