Any Mortgage advisers on the forum?

[jimbeekeeper]

....or any one that thinks they know about mortgages?


Ours is up for renewal 31 dec 2009, done all the search engines etc,

Current one (4.99%) ends and reverts to STD variable which is currently 2.5 %

Been looking at fixed rates abd best can see for 2 years is 4.09%

But thinking about the figures and looking in my magic ball, unless interest rates really go up past 4% very quickly i.e next 12 months, all I can see is we are best sticking where we are, then looking in 24 months for another deal, which we would have to do anyway if we switched now.

ARGHHHHHHHHHH Anoyying

 

[rae]

All you are buying (or not buying) is certainty for two years.

Will interest rates go loopy in the next 2 years - I think they will go up, but not hugely so..whether they push the SVR over 4.09% is anyone's guess. The fix in two years is the interesting one anyway - if rates are rising, you're going to get raped then, if not now.

I think I'd stick on the 2.5% and pay off as much as I humanly could while the rates are low. But that's not investment advice, cos I'm only a bloke on the interweb!

 

[jimbeekeeper]

thanks RAE

Theres nowt wrong with just been a bloke on the web!

That was my thought, but then again if I predict things like the stockmarkets etc, I might be in a different position.


Switich now, to know we WILL have to switch in 24 months, costing twice the fees I think is the wrong way.

Our plan was to increase payments any way, so sticking with current company @ currently 2.5% with no fees, but either over paying monthly (if the allow) or saving this money in a good savings /ISA account then paying the max lump off at the end of each 12 months I think is the best option.

 

[JCBrum]

Usually if you just increase your monthly payment they only treat it as payment in advance, and don't apply the capital reduction or any interest re-calculation until the annual review date.

You have to stipulate that you wish to make a capital reduction payment and have the interest element recalculated.

You probably know all this, ...... I'm just trying to be careful ....

usual disclaimers, ..... bloke on the web, etc.

JC.

 

[tkwinston4]

We are in exactly the same position as you and after speaking to our IFA, she said stay put. Reason being is because the variable rate will be much lower than the rate we are on at the moment, mortgages are still difficult to get and the rates are not particularly good, even though the press say different and she expects the selection of mortgages to increase next year and that banks etc. will start lending again more freely.
This is only one IFA's opinion, so please don't sue if interest rates shoot up to 10% next year!

 

[jimbeekeeper]

I have just spoken to my IFA and basically he said the same as you tkwinston4

So come January 2010, we will be over paying (capital reduction) as much as we can, whilst monitoring rates.

One other positive saving I have achieved whilst searching is, I have found is reducing our life a CIC by £41 per month

And buildings and contents by half, down to £18 per month

Oh and please do not take my advice...I am just a bloke on the net!

 

[Hombre]

21 years ago I took out my mortgage with a bank. The rate was variable, but a few years in, I asked if I could pay more. I was told that they would accept ad hoc payments and increased payments etc, but the ad hoc payments would need to be sensible amounts, like units of £100 etc. Being a bank, if I payed off £500 of the capital today, then the compound interest from tomorrow was going to be calculated on the capital minus £500 pounds. We payed extra as we could afford it and as we accumulated a bit of cash, we would pay of £1000 here and there. The net result was that our house was fully paid off five years early. There was no early redemption charge, but contracts vary. The bottom line is that five years later when the endowment matured. the one that should have paid off the mortgage and given us a big bonus as well, paid out marginally less than we had paid in. It would have been marginally better to save it under the mattress, except for the fact that it gave us lots of security in the early years when an accident or other event might have been catastrophic. No advice, times change, but investigate the possibilities.
If our mortgage had been with a mortgage company, then as has been stated, the interest would have been repayable on the appropriate quarter day, anniversary or what have you.
Good Luck.

In essence, the same advice as tkwinston4

 

[JCBrum]

It's a general rule that the best savings are to be made by using capital, or windfall income, to reduce debt till it's gone .....

The only problem with that is you're always giving your money to someone else and you feel broke all the time.

I used to know a bloke who won £500,000 on the lottery. I asked him what he did with it and he said he spent £300,000 on women and booze, and the rest he just wasted.

 

[Nopants]

As an Ex IFA Im in the same boat as you, Im on a tracker deal that has ended and will not be fixing my mortgage just yet as the banks are out to get you. It will cost you more to fix it in fees and then you will end up by paying over the top if rates remain low. Ideally I would like to see the return of the capped rate mortgages but I dont think that will return to the market place unless there are lots of people defaulting on the mortgages. My advice to you is go and see a fortune teller as an IFAs advice in this day and age is about as much use...

 

[jimbeekeeper]

I am a realy big fan of the money saving expert forum

http://www.moneysavingexpert.com/

On reading about mortgage life assurance he recomends

While some may be worried that ‘cheaper isn't better' actually, with term assurance, there's no investment element as the payout is fixed; and there's no argument over whether someone is dead so this is a truly simple policy. In fact, in most cases, (and do forgive the virtual shouting for necessary emphasis)...

"It's simply a case of the cheaper the better!"

The main things to make sure of are that the company is reputable, and as usual, the premiums (monthly payments) are fixed and not reviewable.

Does this logic apply to critical illness policies too?

I'm not a big fan of critical illness policies. Many believe they will "pay out if you get a serious illness and can't work". Yet that isn't true, critical illness policies pay out a lump sum if you get a specific critical illness as defined by the terms of the policy, which can often be changed; for example losing one leg isn't critical, but two legs is! So don't think "I'm covered for cancer"; most policies only cover a limited range of cancers.

Picking a good critical illness policy would take a doctor and financial nerd combined; so I suggest you're better off getting the mortgage term cover and an income protection policy - which does just that - protect your income from a range of eventualities.

So from this I am ditching the critcal illness and just going for a stright mortgage term cover and income protection.

Currently paying £114 for decreasing mortgage term and critical illness.

But can get via http://www.cavendishonline.co.uk/life_assurance/get_a_quote.php

Mortgage cover decreasing for £14 per month and income protection for me £23 per month and for the other half £20 per month.

So total of £57 per month (on off fee of £35) saving £57 per month and in my view for better cover.

 

[Onge]

I am a realy big fan of the money saving expert forum

Yep great sight check it out

 

[jimbeekeeper]

ALl insurances now sorted, and we are now £64 per month better off for a better cover of insuarance.

 

[VEG]

£64 per month

 

[BKF Admin]

I have a life policy covering the mortgage with the bank I have the mortgage with (HSBC).

It is about 30% a month more expensive than if I arranged it myself,but the very good sales girl informed me that in the event of my death they take on all the paperwork and as its inhouse they cant playup as its their mortgage they are insuring.

I would love to give everyone mortgage advice but as someone who spent the first 15 years with a unit trust endowment mortgage I would give me a wide birth..

 

[jimbeekeeper]

,but the very good sales girl informed me that in the event of my death they take on all the paperwork

Thats good to know, cos I would hate to think I paid all that money and they expected me to sort it out after I was dead