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Original poster

Mortgages? How bad is it? <tremble>

52 replies

fizzbuzz · 04/04/2008 17:29

Due to come off fixed rate in September. Cannot afford higher repayments as all this started just after I had decided to work part time to look after dd

Should we move/bury head in sand? Any economists out there?

OP posts:
ScienceTeacher · 04/04/2008 19:02

I was listening to Moneysavingexpert on Radio 2 today. You might be able to catch the show on Iplayer. It was on from 1pm - 2pm.

Lulumama · 04/04/2008 19:02

have used them before, they are very good

am just hoping we don;t get stung too much

we have never defaulted, regular income, good credit history, if we wanted to get our current mortgage now , it would be 3 x our salary, so not ridicolous borrowing...

slayerette · 04/04/2008 19:06

Our broker told us to start looking in May; our fixed rate finishes in August [sigh]. We got a fantastic deal last time so that it's looking so bleak this time. Dh spoke to broker and is hopeful of repayments not crippling us but such a bad year for me to get laid off at work!

CountessDracula · 04/04/2008 19:10

They are saying interest rates could drop by 2% or more soon so maybe fixes not such a great idea!

Lulumama · 04/04/2008 19:13

it is whether those rate cuts are passed onto the morgages offered though.

MrsTittleMouse · 04/04/2008 19:14

Agree with everyone else - get advice from an independent mortgage broker now, putting head in sand is never a good option.
If your DSS is moving out then could that give you the option of getting a lodger like MissChief suggested? In any case, you need to be cutting back on expenses now as Cargirl said, because you need to see if you can cope on less money. Even in the best case situation, where you get a good rate, you will then have a pot of savings, so it's a win-win situation.
Extending the term may be an option, but it's best to remortgage again when things are better or to overpay if you can - depending on how old you are and whether it would mean a mortgage into retirement.
If you sell and rent, and then re-buy, then you might make money, but it would be speculating on the housing market in the same way that you speculate on the stocks market - it's not a sure deal. You would also need to factor in stamp duty, estate agents fees, deposit (for a rental place), moving fees, legal fees and so on. You also need to know that there are decent places available to rent in your area! It's not something that I would do without a LOT of research.
Hope things work out OK for you.

MrsTittleMouse · 04/04/2008 19:14

It's very doubtful that rate cuts will result in reduced mortgage rates in the short term. There simply isn't the money around to lend out.

CountessDracula · 04/04/2008 19:15

if you have a tracker then they will though

We have a capped tracker which comes down automatically when interest rates change

drosophila · 04/04/2008 19:16

I contacted my lender and was offered a reasonable tracker (givn the times) and a fixed rate that would mean virtualy no extra monthly but tied in for 5 years.

Now I think the Bank of England rates are going down so I think the tracker may be best but it is an increase of £150 a month compared to a nil increase if we fix for 5 years. What would you do??

Lulumama · 04/04/2008 19:17

oooh, i seeeee

will ask broker

am crap at this sort of thing

CountessDracula · 04/04/2008 19:18

Can you not get a capped rate that tracks? We only remortgaged 3 months ago so should still be around?

I guess fixes are cheaper as they expect rates to fall and if they don't track they don't have to pass it on.

CountessDracula · 04/04/2008 19:19

O..M..G

All capped rates have been withdrawn it seems

ffs

Lulumama · 04/04/2008 19:20

yikes

SpecialOffer · 04/04/2008 19:20

We have just come out of our fixed rate and are paying 200 more. No-one would accept us for a re-mortage, and current firm would not extend fixed period, we had a broker looking too.

Our interest only option would only save us 100 a month!!

ruty · 04/04/2008 19:23

oh shit. we are on a fixed rate that ends in december and is interest only. F*ck.

CountessDracula · 04/04/2008 19:23

Things should hopefully be better by then

noddyholder · 04/04/2008 19:38

countess you were really lucky!3 months is a long tome in mortgage land.All deals like that are being pulled and if you don't have enough equity in your house most lenders are advising you look elsewhere or go on to the SVR.Ring your provider now and try to get a deal as I think it will be a few years before the banks feel this crisis is over.They are expecting house prices to fall and are protecting themselves,ACT NOW!

MrsTittleMouse · 04/04/2008 19:43

Sorry, I should have been more clear. What I meant was that new mortgage deals won't go down (fixed rates and the like, which is what most people have).

ruty · 04/04/2008 19:45

what is the SVR?

Original poster
fizzbuzz · 04/04/2008 19:50

Gosh, obviously a hot topic at the moment!!!!

Well am still quite interested in renting, as I live in an uniquley strange area housing pricewise, as prices will stabilise rather then drop round here, but still have jitters abpout the whole thing.

What I don't understand is: If interest rates are going to come down, why aren't mortgae companies passing it on? Is it because they don't want any customers?

OP posts:
noddyholder · 04/04/2008 19:50

standard variable rate which is different from bank to bank and is not neccesarily related to the base rate

Original poster
fizzbuzz · 04/04/2008 19:51

Countess Dracula, you seem very wise about this.

Do you know when things will improve? (hopes for June time)

OP posts:
MrsTittleMouse · 04/04/2008 19:53

To be honest, the banks don't want the business. Banks are feeling vunerable at the moment, the more they lend out, compared to the amount that they have, the worse a position that they'll be in.

flossish · 04/04/2008 20:02

I'm so confused. We're on interest only atm, fixed rates until next april, which will be 3 yrs. The letter we got from the bank forcasting the repayments after this time are, as it stands less than we were expecting. Is this because I think it tracks just above the interest rate? Are we likely to be best to stick with this mortgage come a years time? Any pshycic predictions gratefully recieved...

MrsTittleMouse · 04/04/2008 20:09

flossish - If you have already signed up for a mortgage that tracks the base rate, then you are onto a good deal, as base rates have already come down, and most people predict that they will come down further.
The problem is for people who need to get new mortgages, as the rates for these are going up. This includes people who have fixed term deals and who don't want to revert to the standard variable rate of the mortgage provider (the standard rate tends to be quite high), as they'll need to find a new mortgage too.

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