Re-Mortgage Question - New Rules and Schemes etc....
Discussion
Hello All.
Looking for a bit of guidance here and probably to have some myths dispelled....
I was fairly clear on what I needed to do, but the budget has left me feeling less sure and slightly confused about my options/ what I should do...
I will be at the end of my 3-year fix in Novemeber.
This is my first mortgage / mortgage term.
Initially, I borrowed £124K with £31K down against a property I paid £155K for so bang-on 20%
A couple of Mortgage amortisation calculators I have looked at would appear to suggest that, when the time actually comes to re-mortgage, aside from the sickening interest I would have paid over the three year period, I would be very close to effectively being able to re-mortage at the equivalent of 25% down, due to the ''equity I have bought in the three years of payments''
With the fact that rates seem to be slightly more attractive, this seems to add-up to a double whammy of positives; one that in general available rates for a 20% deposit have improved anyway, and the second being that 25% attracts a better/lower rate...
Some questions....
My calculations show that I will need to pay right up to the 36 month point to get to the 25% equity, maybe even make a one-off overpayment to get there (which I am fully allowed to do).
Can I remortgage on the higher deposit, based on the fact that that is where I WILL be, not where I am right this second?
How long before the end of 3 years should I be looking to seal a deal? 2 months, 4 months? what is the validity of the quotes/rates I will get? Are they likely to improve, as the price war hots up?
This brings me onto the other question: In january when phase-II of the help to buy scheme kicks in, does this mean I can take advantage of this and get a far higher effective deposit for mortgage purposes?
If so, should I let myself default onto the SVR (whatever it is) for a couple of months until these schemes become valid? Will some mortgage companies offer any incentives?
Sorry for all the questions, but what initially appeared to be a simple ''looks at the deals and make a decision'' decision, now seems altogether more complicated....
I was thinking about a 2 or 3 year fix @ 25% down - keep an eye on fees, or maybe even shorten the term based on the fact that I consider the current affordability to be relatively painless...
And if any resident brokers (Sarnie??) want to email me with some real-life figures for my consideration, I am all ears (eyes).
Thanks very much in advance.
Nick.
Looking for a bit of guidance here and probably to have some myths dispelled....
I was fairly clear on what I needed to do, but the budget has left me feeling less sure and slightly confused about my options/ what I should do...
I will be at the end of my 3-year fix in Novemeber.
This is my first mortgage / mortgage term.
Initially, I borrowed £124K with £31K down against a property I paid £155K for so bang-on 20%
A couple of Mortgage amortisation calculators I have looked at would appear to suggest that, when the time actually comes to re-mortgage, aside from the sickening interest I would have paid over the three year period, I would be very close to effectively being able to re-mortage at the equivalent of 25% down, due to the ''equity I have bought in the three years of payments''
With the fact that rates seem to be slightly more attractive, this seems to add-up to a double whammy of positives; one that in general available rates for a 20% deposit have improved anyway, and the second being that 25% attracts a better/lower rate...
Some questions....
My calculations show that I will need to pay right up to the 36 month point to get to the 25% equity, maybe even make a one-off overpayment to get there (which I am fully allowed to do).
Can I remortgage on the higher deposit, based on the fact that that is where I WILL be, not where I am right this second?
How long before the end of 3 years should I be looking to seal a deal? 2 months, 4 months? what is the validity of the quotes/rates I will get? Are they likely to improve, as the price war hots up?
This brings me onto the other question: In january when phase-II of the help to buy scheme kicks in, does this mean I can take advantage of this and get a far higher effective deposit for mortgage purposes?
If so, should I let myself default onto the SVR (whatever it is) for a couple of months until these schemes become valid? Will some mortgage companies offer any incentives?
Sorry for all the questions, but what initially appeared to be a simple ''looks at the deals and make a decision'' decision, now seems altogether more complicated....
I was thinking about a 2 or 3 year fix @ 25% down - keep an eye on fees, or maybe even shorten the term based on the fact that I consider the current affordability to be relatively painless...
And if any resident brokers (Sarnie??) want to email me with some real-life figures for my consideration, I am all ears (eyes).
Thanks very much in advance.
Nick.
To answer your questons;
My calculations show that I will need to pay right up to the 36 month point to get to the 25% equity, maybe even make a one-off overpayment to get there (which I am fully allowed to do).
Can I remortgage on the higher deposit, based on the fact that that is where I WILL be, not where I am right this second?
Yes, no problem at all. As long as the balance it needs to be on the day of completion, thats fine.
How long before the end of 3 years should I be looking to seal a deal? 2 months, 4 months? what is the validity of the quotes/rates I will get? Are they likely to improve, as the price war hots up?
90 days would be the earliest you would want to start looking at securing a rate. Rates are going up and down every other day so that will just come down to your own judgement. Secure a deal your happy with and then stop looking at rates!!
This brings me onto the other question: In january when phase-II of the help to buy scheme kicks in, does this mean I can take advantage of this and get a far higher effective deposit for mortgage purposes?
If so, should I let myself default onto the SVR (whatever it is) for a couple of months until these schemes become valid? Will some mortgage companies offer any incentives?
help to buy is for purchases not remortgages
Sorry for all the questions, but what initially appeared to be a simple ''looks at the deals and make a decision'' decision, now seems altogether more complicated....
I was thinking about a 2 or 3 year fix @ 25% down - keep an eye on fees, or maybe even shorten the term based on the fact that I consider the current affordability to be relatively painless...
And if any resident brokers (Sarnie??) want to email me with some real-life figures for my consideration, I am all ears (eyes).
you have mail!
My calculations show that I will need to pay right up to the 36 month point to get to the 25% equity, maybe even make a one-off overpayment to get there (which I am fully allowed to do).
Can I remortgage on the higher deposit, based on the fact that that is where I WILL be, not where I am right this second?
Yes, no problem at all. As long as the balance it needs to be on the day of completion, thats fine.
How long before the end of 3 years should I be looking to seal a deal? 2 months, 4 months? what is the validity of the quotes/rates I will get? Are they likely to improve, as the price war hots up?
90 days would be the earliest you would want to start looking at securing a rate. Rates are going up and down every other day so that will just come down to your own judgement. Secure a deal your happy with and then stop looking at rates!!
This brings me onto the other question: In january when phase-II of the help to buy scheme kicks in, does this mean I can take advantage of this and get a far higher effective deposit for mortgage purposes?
If so, should I let myself default onto the SVR (whatever it is) for a couple of months until these schemes become valid? Will some mortgage companies offer any incentives?
help to buy is for purchases not remortgages
Sorry for all the questions, but what initially appeared to be a simple ''looks at the deals and make a decision'' decision, now seems altogether more complicated....
I was thinking about a 2 or 3 year fix @ 25% down - keep an eye on fees, or maybe even shorten the term based on the fact that I consider the current affordability to be relatively painless...
And if any resident brokers (Sarnie??) want to email me with some real-life figures for my consideration, I am all ears (eyes).
you have mail!
Be aware that your valuation of your home could be considerably different to that of the mortgage lenders valuer. Three down valuations recently Nationwide £385,000 down to £325,000 (client decided to sell in the end and received an offer within days of £380,000), Nationwide £185,000 down to £160,000 and Abbey £300,000 down to £275,000. Annoying that some down valuations mean the loan to value just moves into a higher interest rate band.
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