Discussion
Mark1000000 said:
This is my current mortgage.
Current flat value would be £185-190k. Around £290k needs to be repaid to the original lender and the rate switches from 6.84 to 7.09 in November this year. I don't know my credit score.
ouch not a nice position to be in £100k negative equity... You don't really have any options as no new bank will offer you a mortgage for 95% of it's current value so you have to consider can you get a personal loan for the £100k and a mortgage from a different bank for. A cheaper rate than your current provider/ honestly I highly doubt it. Current flat value would be £185-190k. Around £290k needs to be repaid to the original lender and the rate switches from 6.84 to 7.09 in November this year. I don't know my credit score.
Got to ask when did you buy? Which part of the country?
I know in my area were back up to the peak levels again.
Is it Leeds Liverpool city flats which were brand new and vastly over priced when you bought.
Thinking rationally about this scenario it may take a good decade to get back up to the level your mortgage is currently at especially given the huge rise in values we have had since feb09. So you could rise it out and in the long run be ok OR the area noone should consider defaulting on the debt. Either way your in trouble for a decade with poor rates.
I know in my area were back up to the peak levels again.
Is it Leeds Liverpool city flats which were brand new and vastly over priced when you bought.
Thinking rationally about this scenario it may take a good decade to get back up to the level your mortgage is currently at especially given the huge rise in values we have had since feb09. So you could rise it out and in the long run be ok OR the area noone should consider defaulting on the debt. Either way your in trouble for a decade with poor rates.
Mark1000000 said:
The numbers I've given above are correct.
I bought the flat in June 2008; it's located in London zone 5.
I can rent out 1 room in the flat (have done it in the past) and that would bring ~£100k (ballpark figure)over 23 remaining years.
if you really believe your going to be "sharing" until your early to mid 50's with a lodger I think your going to have a bit of a wake up call I bought the flat in June 2008; it's located in London zone 5.
I can rent out 1 room in the flat (have done it in the past) and that would bring ~£100k (ballpark figure)over 23 remaining years.
Frankly speaking IMHO if he isnt up to speed on Mortgages Id say its highly unlikely he'd know the total amount payable much more likely to know the property value when bought & the mortgage taken out & the rough estimate of the property price currently.
If its as you say well he's in luck - if not b&lls deep somewhere very unpleasant.
If its as you say well he's in luck - if not b&lls deep somewhere very unpleasant.
YOu've bought a flat for £300k + which is now worth 185-190?
You poor bugger, where is it?
Have you checked what variable rate you will be going on to when the fixed rate ends? That's the important point at the moment. Along with your lender.
For your guide, unless you are well out on your figures somewhere you are not going to be changing your mortgage.
You poor bugger, where is it?
Have you checked what variable rate you will be going on to when the fixed rate ends? That's the important point at the moment. Along with your lender.
For your guide, unless you are well out on your figures somewhere you are not going to be changing your mortgage.
scotal said:
For your guide, unless you are well out on your figures somewhere you are not going to be changing your mortgage.
Is there any possibility his lender might switch him to a different product if he says that he's in negative equity, has no other assets, and that he's at risk of defaulting? I imagine they'd prefer to have someone paying towards a mortgage at a lower rate every month than crystallising a £100k+ loss.I got the feeling I'm not being fully understood here.
Yes, the mortgage - or rather its conditions - were bad; the reason I went ahead and accepted it in the first place was that working hours for my 2nd job (had 2 jobs back then) were not normalised - i.e. one week I'd be doing 45 hours, 60 in the next one etc. The potential lenders would not accept me under normal conditions.
The value of £185-190k is based on nearly identical flat being sold in the same block of flats.
The "renting out" solution is by no means perfect but doable.
Looking from a broader perspective, my descendants will get the flat for "free" as it's a freehold (obviously they'd still need to be able to pay the council tax and the bills).
Yes, the mortgage - or rather its conditions - were bad; the reason I went ahead and accepted it in the first place was that working hours for my 2nd job (had 2 jobs back then) were not normalised - i.e. one week I'd be doing 45 hours, 60 in the next one etc. The potential lenders would not accept me under normal conditions.
The value of £185-190k is based on nearly identical flat being sold in the same block of flats.
The "renting out" solution is by no means perfect but doable.
Looking from a broader perspective, my descendants will get the flat for "free" as it's a freehold (obviously they'd still need to be able to pay the council tax and the bills).
Mark1000000 said:
Looking from a broader perspective, my descendants will get the flat for "free" as it's a freehold (obviously they'd still need to be able to pay the council tax and the bills).
Only if you pay off the mortgage; at the moment you owe the bank the entire value of your flat plus £100k so nobody but the bank will be getting your flat.Mark1000000 said:
I've been thinking about switching my mortgage lender; the current mortgage stats are:
- First 2 years at 6.84%;
- 7.09% afterwards;
- Overall cost is 7.4% APR;
- £999 fees (added to the loan);
- Term of loan: 25 years.
Am I likely to find a better deal?
1. When does that fixed rate come to an end? Or is that a new 2 year fixed?- First 2 years at 6.84%;
- 7.09% afterwards;
- Overall cost is 7.4% APR;
- £999 fees (added to the loan);
- Term of loan: 25 years.
Am I likely to find a better deal?
2. Is that 7.09% rate being illustrated now, or was that from when you accepted the mortgage?
3. Is that 7.09% a standard variable rate, or a base rate tracker for the life of your loan?
SJobson said:
scotal said:
For your guide, unless you are well out on your figures somewhere you are not going to be changing your mortgage.
Is there any possibility his lender might switch him to a different product if he says that he's in negative equity, has no other assets, and that he's at risk of defaulting? I imagine they'd prefer to have someone paying towards a mortgage at a lower rate every month than crystallising a £100k+ loss.Gassing Station | Finance | Top of Page | What's New | My Stuff