Urgent Mortgage Advice Required

meestaman123

Hi All,

I'm one of the unlucky people whose fixed term deal is ending very shortly with all this credit crunch business going on and am looking for some advice.

Basically at present my repayments have been 700 per month on a 145k mortgage with GMAC. Within 2 months though the repayments are jumping to 1000 per month (ouch!).

I've contacted a mortgage advisor and so far she has come up with a fixed term deal (I forget who with) which would have the payments at 1000 per month (still not great). Should I stick with the SVR for now and remortgage in a couple of months time (would this even make any difference?) or should I jump ship and go for the best fixed deal even if it does not lower the monthly repayments at my current lender's SVR ?

Any help would be much appreciated.

Icey77

My fixed term rate ends on 30th June and because the property is let out (with all appropriate permissions!) I can't move to another mortgage provider as I do not currently have the equity to meet their requirements - I have 18% and they require 20% :rolleyes:

I also tried a mortgage broker but he couldn't find me anything due to the equite issue. So I contacted my mortgage company, Alliance and Leicester, and have remortgaged into another 2 year fixed rate. At the same time I changed the term from 33 years & 9 months down to 30 years as I'm earning more. So in the shortterm I will find it a little tighter but longterm I'm paying off the mortgage quicker.

I would suggest contacting you current mortgage company and seeing what their current products avialable are - keep in mind that to get the lower percentage rates you will have to pay a product fee. I just paid £999 to 6.04% which has already gone from the available products list to be replaced by 6.49%'s 6.99%'s so I'm quite happy with what I got.

Good luck

rdsmortgageman

meestaman123 wrote: »

Hi All,

I'm one of the unlucky people whose fixed term deal is ending very shortly with all this credit crunch business going on and am looking for some advice.

Basically at present my repayments have been 700 per month on a 145k mortgage with GMAC. Within 2 months though the repayments are jumping to 1000 per month (ouch!).

I've contacted a mortgage advisor and so far she has come up with a fixed term deal (I forget who with) which would have the payments at 1000 per month (still not great). Should I stick with the SVR for now and remortgage in a couple of months time (would this even make any difference?) or should I jump ship and go for the best fixed deal even if it does not lower the monthly repayments at my current lender's SVR ?

Any help would be much appreciated.

Normally GMAC RFC would be used for sub prime or self cert (not in every case). Is there a reason that you are with GMAC? Adverse etc?

If the adviser you spoke to is coming up with a deal that is the same monthly payment, I would suggest sticking with GMAC on the SVR. You won't have any additional fees to pay and you will be able to move away from them at any stage (assuming no exteded tie in).

herbiesjp

Is your mortgage adviser whole of market?

For them to come back with a fixed rate deal that means you are paying the same amount each months as Gmac's SVR leads me to believe that either they are not whole of market or that you have some adverse credit histroy meaning higher interest rates

Can you give a little more information?

JimmyTheWig

Arrangement fees / tie-in periods aside, what you need to ask yourself is what you think mortgage rates will do in the next few months and years. If you think they will come down (arguable, as the Bank of England base rate seems to be coming down) then stick with the SVR and look again when rates are lower. But if you think rates will go up (arguable, also, as the credit crunch could bite harder) then get yourself locked in now.

But, as rdsmortgageman points out, you can't ignore arrangement fees and tie-in periods, and so you need to factor those into your decision. E.g. if you think there is a chance rates might go up, then do you think this chance is worth paying the arrangement fees for?
Another reason to stick with the SVR is that, assuming it is a repayment mortgage, the longer you are paying it for the amount you owe is decreasing and so hopefully (depending on house prices) your equity will be rising. Plus, assuming you are paying everything on time, any adverse credit history is getting further away.