Sticking on I/O is fine.

I think all of the SVRs have gone up in price (unfairly so in my opinion).

Regarding the house valuations I don't think they should be less than the value in Sept 2004 but around that amount. It's worth a quick look at the land registry or ourproperty to see what other property has sold for recently.

Sparky.

Hi Sparky

Apologies for replying, my laptop decided to break ! again I aint the luckiest person in the world, thankfully I know a good computer techy.

I contacted Abbey on Thursday and they basically they said that due to their lending criteria changing they arnt offering the majority of their customers, maturing on a fixed rate anything other than their account moving to their SVR - currently 4.24% (i am on 5.84%).

The gent, said, if their SVR remains the same, my monthly payments would drop from £525 to £384, if I wanted to move it onto Repayment, there would be a charge of £75 and my payments would change to £505, still at 4.24%. However, what the bloke seemed to stress a lot is that SVR's are not linked in anyway to BOE BaseRates...he seemed keen to imply that they were only dropping because of the public pressure whilst the BOE's rate was dropping.

Basically I got the impression they were really keen to start increasing their SVR asap but clearly didnt want to be the first to do it ...

Therefore I contacted my IFA and she also stressed that she had seen her work cut by 75% as their isnt the deals that there used to be going back to summer of 2007 unless you still have a fair chunk of equity left.

I have decided to remain on I/O when my deal ends on the SVR, the difference in what I would be paying to what I was paying I will continue to pay as a monthly extra payment, if I am unable to do this I will set up yet another saving account, bank it and pay in January 2011 a lump sum.

Also interestingly enough, has anyone tried the Nationwide House Price Index... I did this stating my house was valued, which is was, at £124,950 in Sept 04, (Q3) which it said it would be £118000 now, which is not bad, as in december 07 it was valued at £119,950 by the abbey. However, if I put in the valuation by the abbey for Q4 of 2007, it says that my house is now worth only approx £98000 I cant understand why there is so much difference. The original quotation means I am still around 90% LTV, the latter, means I am well into Negative equity....

Hi Mr Spock,

Try a comparison of mortgages on the main site here, most are only offering 85% or 90%.

This would be worth knowing before going to Abbey so that you know how to compare what they offer (and you might be able to negotiate on fees).

If you need more advice it might be worth speaking to an Independant Financial Advisor to get more specific advice, including your savings and pension plans.

.

I think that the main problem you will have with a remortgage will be the affordability.

As a single applicant you will need over 4.5 times your salary, and given the 4K debt you would need:

£107k + £4K = £111K / £24.5K = 4.531 times your salary, which is quite high.

This is because they will deduct any other debts from your possible mortgage.

.

I do understand about your access to some capital, but lets say for £4000 you are paying interest on a credit card at

16.9% (fairly good standard rate at the moment)

Paying £676 per year - £56.33 per month

19.9% (average rate)

Paying £796 per year - £66.33 per month

22.9% (above standard rate)

Paying £916 per year - £76.33 per month

.

So you would save additional funds to pay back your mortgage.

HTH

Sparky.

Hi Sparky

Thanks for the prompt response and for the advice. I guess with me its always the worry of hindsight !

The credit card, although the amount is high, really isnt worrying me at the moment, I meet the repayments fine, my main worry is my new mortgage. I know what you are saying about using my savings, but with two lads, its always nice to have money in the bank, not counting the expenses of school, both have to have new school uniforms (as my eldest is starting secondary school in two weeks) and have money for a rainy day (usually in my case its always a hurricane) etc I dont get any financial support from my ex wife.

I realistically want to get my mortgage sorted first. I am tempted to move onto Abbey's SVR get the drop in my monthly payments and then switch to repayment, so it kinda balances itself out, a drop but an increase, but as you say, fix at the first sign of increases......

Yes my deal ends on 1st January 2010, so any movement by me now would get me a penalty. Based upon the above what rates would you believe i would be likely to get, its just I am tempted to ring the Abbey, as you can do up to 4 months before your product ends to secure any new rates... and I would like to compare it to any the offer?

Hi Mr Spock,

If you are not on a 0% or very low credit card Balance transfer I would pay the credit card balance off as my highest priority.

I'd use the savings - which probably aren't earning much interest and most likely less than half/third/quarter the interest you are being charged on the credit card - to pay this off.

Also you would only have paid about 2700 off your mortgage (maybe another 500) as this is how much you have saved.

Although you have an interest only / investment mortgage, you should check to see if you are able to make repayments against the mortgage (usually up to 10% each year).

As savings rates are low (and lower than mortgages) I would consider paying the money you are saving every month into the mortgage account (like a repayment) instead.

The bank are currently making 5.84% on the full figure and paying you ?%

The bank are probably better off, and you are not.

.

Do you need to fix just yet? Although the SVR is 4.24% it is a saving of 1.6% which is more than a quarter saving on your interest payments. This is £16 per year on every £1000 you owe, or £1.33 pm per every £1000, which you could put towards repayment. Keep an eye on the deals and save towards the fees for the new mortgage.

When does your fixed term end (December)? You can't come off the deal until this time without paying (asuming there is one) an early repayment charge to get out of your fixed deal.

HTH

Sparky.

Hi All,

I have been a contributing member to this site for a couple of years, however, I havent asked for any advice, until now ! and really am stuck as to what to do......

Basically to cut a long story short, in October 2007 me and my wife split, I remained in the family home, with my two young sons. At that time we had many debts, one being a secured loan which we both jointly took out, but I only did so as I discovered more debts that she had accrued whilst she was, shall we say, having a fun lifestyle. Anyway in December 2007 I approached an independant mortgage advisor as my current deal, with A&L was running out, our mortgage at that point was approx £75k and the house was valued at £120K, however I also wanted to get rid of the cowboys from the secured loan. So I had to add that loan ontop, which took me up to £107k .

I honestly didnt think I wud get a new mortgage, but the IFA came through and got me a 2 year fixed rate deal with the Abbey, at 5.84%, but Abbey would only take me on as interest only. the IFA advised the difference in what i was paying out, to what I would be, to save into an ISA. This I started immediately, however, my wife then filed divource proceedings and it was a costly one, however, she didnt get anything, I paid off the divource in November 08 and then we had a quiet Christmas, I still have the house and the lads fulltime.

Anyway, paying the family bills wasnt a problem - a struggle yes, but all paid on time etc, but I had built up a hefty sum on my credit card, £4k, but have nearly £2700 in savings, adding too each month, and as my little run about died a death becoming an oscar nomination I had to buy a newer car, in November 08. I am employed full time and it is secure, my annual salary is £24.5k I have a share incentive savings plan & a final salary pension.

My main concern is as i am interest only I obviously havent paid anything off the mortage balance. But honestly, I am wondering what would I have paid off, as in what would my balance be, now, would it have gone down by alot in two years....??? also with interest rates, well SVR's at an all time low, would i be better coming off the fixed at 5.84% and dropping to abbey's 4.24% svr and then switching to repayment....or wud i be better ringing abbey and seeing what they could offer me. I am hesitant to re-mortgate with anyone again, as I had a 90% LTV before and honestly dont think I would have any equity as think house prices would have dropped or do you think I should bite the bullet, as I really didnt want to have to go back to the independant advisor with £4k in c.card debt...car finance etc .....

Finally if i was to get a new fixed rate deal, opting away from the svr's etc i would want a longer fix, as I remember when we bought our first home, in 1995, we were still feeling the pain of the last recession, and the interest rate we were paying then was near to 8% I honestly dont think interest rates could ever go back up to that level as surely there would be mass repossessions but they came down at a snails pace last year, but I can imagine they would go up like a helium balloon when it kicks off..

Cheers