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Help pls - Fixed rate mortgage coming to an end!

Last post Wed, Jul 15 2009, 1:57 PM by Ali***. 4 replies.
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  •  Wed, Jul 15 2009, 12:02 PM

    Help pls - Fixed rate mortgage coming to an end!

    Hi all,

    I was wondering if anyone could offer any advice?

    My 2 year fixed rate mortgage comes to an end next month and i'm unsure what to do.

    I'm with Alliance and Leicester (think the rate was 5.87%) and have a mortgage just under £110,000. When we bought our house 2 years ago we bought it for £137,000 (was worth slighty more).

    What do you think my best option is?

    Thanks in advance for any help.

    Ali

    • Post Points: 50
  •  Wed, Jul 15 2009, 1:03 PM

    Re: Help pls - Fixed rate mortgage coming to an end!

    hi Ali,

    Assuming that all prices have dropped 20 - 25% in the last two years it is probably now worth between 102750 and 109600.

    Have you had any valuations?

    Regarding the mortgage, were you on a repayment mortgage or investment (interst only)?

    How much do you now owe?

    Do you know what the SVR rate that the A+L will switch your mortgage onto when your deal finishes? I think you might be just as well if you are struggling to get a new offer, to wait a little longer for the mortgage market to recover, though a quick search looks like the SVR for the A+L is 4.99%??

    You can always contact them to discuss the offers for a remortgage.

    Good luck

    Sparky.

    • Post Points: 50
  •  Wed, Jul 15 2009, 1:41 PM

    Re: Help pls - Fixed rate mortgage coming to an end!

    Thank you for your reply Sparky.

    We are on a repayment mortgage. I think it's around 109,000 that we now owe.

    Yes the SVR rate is at 4.99%. Would you suggest to move on to the SVR rate and wait to get a fixed rate?

    Also, do you know how much the appox cost is for a valuation? I think our house is worth more than what A and L would have it down as.

    Thanks again

    Ali

    • Post Points: 50
  •  Wed, Jul 15 2009, 1:53 PM

    Re: Help pls - Fixed rate mortgage coming to an end!

    Hi Ali,

    I would only stay on the SVR if your circumstances are uncertain (might you move or sell) or you are unable to get another mortgage as they aren't very competitive, they are less than the fixed rates at the moment, but more than all the trackers. What this would give you is time to investigate further to find the best deal, but if interest rates go up these will also go up, and it will go up soon(ish - definately this year, perhaps after the summer in my opinion).

    You don't need to do anything or pay anything if you do nothing the mortgage will automatically go onto the SVR.

    If you want to remortgage, give them a call about this, and they will be able to tell you the fees for applying, the rates etc, and the cost of the valuations that are available.

    I think these range from a couple of hundred pounds for a basic valuation to about 600 for a homebuyer survey - you (probably) don't need this!

    They may offer a remortgage deal, but to be honest it is worth shopping around, dependant on the value you may still be able to get a new mortgage.

    Valuers look at what similar properties in the area have sold for and will use this as the basis for the valuation. They are being more conservative at the moment, but it is possible to challenge it if it is miles away if you can provide 3 other examples. Remember an estate agents price is a marketing offer and not a sale price, which the valuation is expected to reflect, the difference can be more significant now and is usually between 5 and 10% (in my opinion).

    HTH

    Sparky

    • Post Points: 20
  •  Wed, Jul 15 2009, 1:57 PM

    Re: Help pls - Fixed rate mortgage coming to an end!

    Thank you for all your help, you have been great.

    Ali

    • Post Points: 5