Hi Gemma,

When the change comes into effect the lender will reduce your direct debit, so you will need to arrange one of two options to add these over payments (of what amount you decide):

1) Make regular monthly payments to the mortgage. (Check you are ok to do this, and when the interest is calculated)

2) Make regular monthly payments to a savings account (ISA?) as this will give you more flexibility (and more tempting to use) for the use next year (to use as a further deposit on the mortgage / purchase of the additional share.

HTH

Sparky.

Thanks Sparky,

Do you think it would would be best to keep paying the same or is it okay to just add £200 to the new total a month?

I only ask because it would be nice to save a few pounds for the next year!

Thanks

Gemma

Hi Gemma,

Good to hear things are getting sorted, and that you will finally get some relief with the 2% above BOE!

Given this you should be paying less than half the interest on your mortgage, but i would try (if you can afford it) to keep your repayments at the same level.

If for example your mortgage was 100K you were probably paying about 480 in interest, which would now drop to around 208.

If you are able to pay the other 275 for the next year you would have paid off another 3300 off your mortgage, which will help you when you go to buy out the other part of the house, or when you come to remortgage.

From my own experience, it is much easier to do this when the change starts before the money gets assigned elsewhere.

Good luck with it all.

Sparky.

Hi Sparky,

Thank you for the advice. I check my credit report every few months and too be honest there needs to be a great deal of improvement before we will be accepted by a high street lender again. I have three years until all my defaults would have disappeared. Some of them are in two years but a couple are the end of 2012. Our current mortgage deal ends in November and after looking at all the details, they say their SVR is 2.00% above the base rate which is a good improve on when I took out the mortgage.

We've decided not to remortgage in November and have sent all the cheques off this week to pay the outstanding £2.5k of our debts. Even though I know it won't improve my rating now, it will over time and thats a great achievement for me. But we will need to move at some point next year to a bigger house so we'll have to see what situation we are in say in six months time.

Thank you for the advice

Gemma

Hi Gemma,

I'd reccomend getting a copy of your credit record to find out what it says, and you can see what the lenders will see also.

Regarding the remortgage, there are 85% deals out there (90%), and obviously the deals aren't as good as the 75% or 60% mortgages.

Looking at your credit record will help determine when defaults etc will clear your record.

Do you know what your SVR on the mortgage will be when the current deal finishes?

You do not need to remortgage, you are already in a deal, but the special deal (fixed) ends and then you go on the SVR so you are not at a complete loss, and also your SVR should be a lot less than 7.9%

Whether you decide to buy the other part of your house, I would recommend paying your other debt first.

Having 2000 rather than paying off the debts may be better to reduce your mortgage.

Speak to an IFA / broker about what they can find you and the benefits of having the 2000 vs paying off the debts.

Good Luck with it

Sparky.

Hello,

Our fixed rate mortgage ends in a few months and I've started looking at the option of remortgaging. A couple of years ago we remortgage through a broker to a mortgage company that accepts sub-prime borrowers. I've made some financial mistakes in the passed and have some defaults registered against me. A few have been paid off and my kind mother in law has offered to pay the outstanding £2000 off for us before we remortgage. Considering we were sub-prime the interest rate for our mortgage is 5.79% which was lower than Abbey at the time.

I would like to remortgage this year as we only own 75% of our property as we bought through the homebuy scheme 4 years ago. I would like us to buy the other share as we are now in the financial position to do so but this would mean increasing our mortgage. We've never missed a mortgage payment and I pay all my other bills on time (the defaulted ones). Is it easier staying with the same lender? Are they more likely to lend us more. Our mortgage is currently £100k. So we would be looking to add £25,000 to the mortgage because the house is worth £139k. I know they will do another credit check and my credit rating, although better is still extremely bad because I am using 85% of my available credit.

My husband's is actually better than mine, unlike last time when he was about the same. Will that help is secure a better mortgage. I'm not to bothered about the interest rate. Lloydstsb (our bank) said they will look at us but they won't even increase our overdraft so I doubt we'd be accepted. They are offering 7.29% for a 90% mortgage. That's worse than two years ago. That's fixed for 5 years. But surprisingly they were extremely supportive.

But I did read some where that sub-prime mortgage lenders work to help repair your credit rating because it doesn't appear on your history until you've held it for 2 to 3 years. Is that correct? It doesn't appear on my credit history at all. Abbey does stating it as settled!

Sorry for all the questions...I would appreciate any advice before moving forward.

Thanks

Gemma