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hi all im after some advice/guidance!
just to set the scene...
we bought our first house in November 2007 for 128000
we had a mortgage from Halifax for 122000 , they then added the arrangement fee and then a higher lending charge to it t take the mortgage to 124384.
i have just phoned halifax last week and they have told me that our house is now valued at £109000.
i was quite shocked at this as we have spent nearly 15000 on renovating it from the bottom up (new kitchen and double glazing etc)
two houses on the estate similar to mine but not as nice (mid terraced as opposed to end like ours ) have just sold for £130 and £135 respectively .
we are due to renew our mortgage in the next month or so and im worried that we are not going to get a good deal.
we are currently on a 2 year fixed rate at 6.79% interest only.
i would like to switch to a repayment mortgage now to start bringing it down , this is the first time we have re mortgaged so not sure how it really happens.
for instance if halifax only value our house at 109 can we mention the other 2 that have sold for more??
many thanks
steve
You get it revalued & then go about seeing which mortgages are on the market that you're able to go for & see about applying for one.
There's an independant mortgage broker on here who may be able to help. I forget his name now but he's offered for others anyways.
i might sound a bit thick here but why do halifax bother to give you a valuation if you can go out and gt another anyway??
Prices houses sell for bare no relation to value for mortgage sadly.
Even if you value the house at £140K you may struggle to find anyone who will lend to you with a loan to value ratio of over 80%. Two of my work mates are in the same situation - they ended up staying put and dropping back onto the standard variable rate.
How have Halifax arrived at their figure?
Doing imnprovements to a house does not automatically add the same amount in terms of value, but I'd suggest you get some proper evidence to support these other recent sales (depends on how "recent" they are, might be on mouseprice or land registry site) and if Halifax want to argue about it, they need to show their evidence.
Valuations are only informed opinions, 10% margin or error is still competent in most courts.
does it cost to go back onto svr??
also are haifax likely to charge me for swapping from interest only to a repayment type mortgage??
one of the houses sold 2 weeks ago.
They didn't charge, how could they, you don't have any other option! I went from nearly £400 to about £160 a month. I didn;t have to do anything, thats just what happens when your fixed rate ends. However C&G's standard variable is 1.5% just now, some are much higher.
I'm sure they will charge you to change mortgage type. However from what i heard at work last week i think you'll be lucky if they let you.
i dont understand rockhopper are you saying is cost £160 quid to swap to a svr mortgage??
oh and what did you here last week??
Edited my post for not reading yours properly!
A work mate was in the same boat as you, borrowed 95%, house hasn't gone up as much as they hoped, fixed rate coming to an end, no one would give them another mortgage, not even their own lender. They have gone onto their current lenders SVR which unofrtunatly for them is quite high.
That's a horrible fixed rate. You should call your mortgage lender and ask them exactly when the fixed rate ends and what the rate arrangement is beyond then. Without knowing that it's tough to give helpful advice.
The other thing to do is look through your mortgage agreement for the repayment or redemption penalties. These are normally expressed as a percentage charge made for payments over the normal monthly amount. Assuming the period during which redemption penalties apply expires with your fixed rate (it might not) then there isn't any fundamental difference between interest only and capital repayment, you just hand over a bit more money each month and that extra erodes the capital bit by bit.
Always amazes me that you can get interest only without any sort of repayment vehicle. The usual flannel about downsizing in the future is, err, flannel.
When the fix period ends you'll almost certainly go onto the lenders standard variable rate. At the moment that's 3.5% at the halifax. That'll just about halve your monthly payments. Pay anything else you want or can afford off the capital. Keep an eye on your situation (interest rate changes, mortgages available to suit your situation) but I'd say there's no immediate rush to move. IMHO.
digimap , my repayment vehicle is the big lump sum i get for doing a full term in the RAF, ok it will not cover it all but it will a help by a long way.
my fixed rate ends in November but halifax have told me i can get something in place upto 3 months before.
my paperwork says i drop onto the svr after the fixed rate.
shave i got this right.... drop onto the svr which is nearly half my fixed rate?? interest only.
does this mean that i can continue paying what i am now and that anything above the normal monthly figure will come off the mortgage and nt the interest??
that's about the long and short of it (you might find that the amount you can 'overpay' on an interest only mortgage is limited though (it's about 10% PA on most I think)...
go to svr, or if you really want to change find a decent indy broker with access to all of market morgates (if you are London/SE based I can recommend one we have used x2 and have happily recommended to friends, family and work colleagues)
Go to SVR - we did, saved £350/mo 🙂 But don't change - there's no point at all. Your payments will drop but keep paying the same so you have some equity - then when the economy revives in a couple of years and rates go up, you can then switch.