Mortgages

[Tyler Durden]

I've been looking at this place...

 

http://www.rightmove.co.uk/property-for-sale/property-40515907.html

 

It needs a lot of work doing to it but if you could get it for £100k it's a hell of a lot of house for the money even if it is in a shit hole area.

Doesn't look that bad on the pictures, looks like a repossession, always a bargain the repos

[lifetime fan]

Doesn't look that bad on the pictures, looks like a repossession, always a bargain the repos

Yeah it is. Like I said its a crap area to live but the houses are a good size, just wary of spending any money to then have someone come in with a bigger offer.

[Champ]

Yeah it is. Like I said its a crap area to live but the houses are a good size, just wary of spending any money to then have someone come in with a bigger offer.

 

Daydreaming or is this a serious thought for a long time move?

[Section_31]

Alright folks, just after a bit of advice from anyone who knows about all this stuff. 

 

We got our fixed rate mortgage two years ago and  now it's time to remortgage. We've seen a financial advisor (who I'm not entirely convinces about as he keeps forgetting our second name, and also keeps asking why we're there when we go to an appointment) and he said he usually advises against it, but because ours is so high (think we got fleeced, but ho hum) then he said we should. 

 

Also, he's suggested we consolidate all our debts into the remortgage, something my mate in work reckons is a bad idea, as we'll be paying interest on it for decades, suggesting instead we get the minimum remortgage and just consolidate our debts into a loan with a clear end date. 

 

A second question:

 

We've done some research online and the options it gives us are two year fixed term and five year, the five year one is sixty quid a month higher - but I'm thinking with Brexit in the pipeline and all that bollocks, it might be the sensible choice. 

 

Thoughts ladies and gentlemen please? 

[Rick Sanchez C-137]

Alright folks, just after a bit of advice from anyone who knows about all this stuff. 

 

We got our fixed rate mortgage two years ago and  now it's time to remortgage. We've seen a financial advisor (who I'm not entirely convinces about as he keeps forgetting our second name, and also keeps asking why we're there when we go to an appointment) and he said he usually advises against it, but because ours is so high (think we got fleeced, but ho hum) then he said we should. 

 

Just sounds plain weird. Everyone I know renegotiates their mortgage deal at the end of their fixed term agreement.

 

Also, he's suggested we consolidate all our debts into the remortgage, something my mate in work reckons is a bad idea, as we'll be paying interest on it for decades, suggesting instead we get the minimum remortgage and just consolidate our debts into a loan with a clear end date. 

 

Depends on the size of the debt, but yes I'd agree with you that consolidating outside the mortgage would be the way to go if you can afford it. If you can't, as a last resort put it on your mortgage and make sure your mortgage has a decent allowance for penalty free over payments and pay off as much extra as you can.

 

A second question:

 

We've done some research online and the options it gives us are two year fixed term and five year, the five year one is sixty quid a month higher - but I'm thinking with Brexit in the pipeline and all that bollocks, it might be the sensible choice. 

 

Again, depends on the size of the mortgage but they've been talking about the baseline interest rate going up for years and it hasn't yet. Take your 2 year deal experiment with it and see what it would cost with the interest rate pushed up 0.5% and 1% etc.

 

Thoughts ladies and gentlemen please? 

[Mook]

I'm clueless when it comes to this sort of stuff but isn't re-mortgaging completely different to adjusting your fixed term every few years? Why would you need to re-mortgage?

 

I would always go with the lower payment option, £60 a month is a fucking lot of money over 2 years & you never know what might happen. I think leaving the EU might be good for home owners in terms of interest rates although I'm not due to call the bank until November so haven't really looked into it.

 

I'd be interested to see what sort of response you get from people who know more about it on here.

[Rick Sanchez C-137]

I'm clueless when it comes to this sort of stuff but isn't re-mortgaging completely different to adjusting your fixed term every few years? Why would you need to re-mortgage?

 

 

Well I've only had a mortgage 3 years, and had a 2 year fixed term, after that, I switched to a different lender altogether. I thought they were the same thing.

 

http://www.moneysavingexpert.com/mortgages/why-remortgage

 

This cunt is a cunt but he know his onions.

[Section_31]

Great stuff. 

 

The way this goon described it was that when you stay with the same lender, the proportion of capital you pay off as opposed to interest goes up the longer you're with them, but that when you switch lender you go back to the beginning. 

 

With regards our overall debt outside the mortgage, it's around ten grand, but that puts an extra tonne a month on our mortgage. I'm inclined now to go for that two year deal (it'd come in about £520 a month - we're currently paying £720) then just divert the extra money to debts. 

[The Woolster]

On consolidating your debts, it kinda depends on how much you've got and the interest you are being charged. If it is a credit card debt and you are 17% a year interest, then putting it on your mortgage could save you a fair bit.

 

It also depends on if you can be active about paying it off. If you consolidate and then just leave it, then you will pay more over the life, but if say that what you would have paid on your current loans you put to the side, and then overpay as ROTOQ says, then it should work out cheaper and it will be paid off quicker.

[The Woolster]

Great stuff. 

 

The way this goon described it was that when you stay with the same lender, the proportion of capital you pay off as opposed to interest goes up the longer you're with them, but that when you switch lender you go back to the beginning. 

 

With regards our overall debt outside the mortgage, it's around ten grand, but that puts an extra tonne a month on our mortgage. I'm inclined now to go for that two year deal (it'd come in about £520 a month - we're currently paying £720) then just divert the extra money to debts. 

 

At the beginning of a mortgage, it is true that the majority of what you are paying is interest, and you have to pay a mortgage fee when you take a new one out, but the amount that you save by going onto the new promotional offer should more than outweigh staying on the banks standard variable rate, which is often a good 3% higher

[Section_31]

On consolidating your debts, it kinda depends on how much you've got and the interest you are being charged. If it is a credit card debt and you are 17% a year interest, then putting it on your mortgage could save you a fair bit.

 

It also depends on if you can be active about paying it off. If you consolidate and then just leave it, then you will pay more over the life, but if say that what you would have paid on your current loans you put to the side, and then overpay as ROTOQ says, then it should work out cheaper and it will be paid off quicker.

 

Ours are all interest free at the moment, but that will come to an end in the next year or so. 

 

Minefield all this bollocks! Don't know whether to just try a new advisor but one who doesn't seem like such a clown. 

[Rick Sanchez C-137]

Ours are all interest free at the moment, but that will come to an end in the next year or so. 

 

Minefield all this bollocks! Don't know whether to just try a new advisor but one who doesn't seem like such a clown. 

 

Definitely ask a few trusted friends about recommendations for a new advisor. I'm no expert but I have complete faith in mine and he just tells me what he needs from me and has always found me good deals and kept me in the loop. He never pushed me towards doing anything, just told me the options and what each one meant and let me make the decision. I put my car loan onto my mortgage to lighten the monthly bills as I was struggling a bit so he made sure I was allowed overpayments so that I could pay when i wanted, but not HAVE to pay it each month. That really helped loosen the noose around my neck.

[Rico1304]

We've always used London and Country for remortgaging. They are all market and you don't pay them. I'd thoroughly recommend them (I think we got the original recommendation from the Martin Lewis site).

[The Woolster]

If it is interest free because you got a 0% balance transfer offer onto a credit card, then I would (and do myself) just get another 0% balance transfer when that one comes to an end.

 

Could depend on your credit score, but there are cards offering 36+ months interest free with a 2-3% fee. Its almost free money as long as you remember to transfer before the promotional period runs out. I've been doing it for years, the only issue I've had was when I bought my current house and having the credit card debt impacted on the amount I could borrow, and I was at the max of my budget, but as it is a remortgage, and as long as your financial situation hasn't changed for the worse, you should be ok

[The Woolster]

I've never used a financial advisor, and when I did have a brief chat with one, he couldn't find me a better rate than the one I had found already, but then I work in the finance industry so have an understanding of what is going on.

[stringvest]

I think the days of the financial advisor are numbered, as it is relatively easy to research yourself.  A bit like estate agents, they are being superseded by semi-automated services via t'intertnet.

 

I've just managed to save getting on for £10K in selling a house by not going to an estate agent.  

 

It is worth looking for interest free deals on credit cards, and investing a little time to save you a ton of money by switching regularly.  

[Rick Sanchez C-137]

I think the days of the financial advisor are numbered, as it is relatively easy to research yourself.  A bit like estate agents, they are being superseded by semi-automated services via t'intertnet.

 

I've just managed to save getting on for £10K in selling a house by not going to an estate agent.  

 

It is worth looking for interest free deals on credit cards, and investing a little time to save you a ton of money by switching regularly.  

 

How do you go about advertising your house without an estate agent? Do you just put it on propertypal yourself? I'm selling mine (currently vacant). It's in a fairly high demand area (considering its rural).

[bigbak]

 

Alright folks, just after a bit of advice from anyone who knows about all this stuff. 

 

We got our fixed rate mortgage two years ago and  now it's time to remortgage. We've seen a financial advisor (who I'm not entirely convinces about as he keeps forgetting our second name, and also keeps asking why we're there when we go to an appointment) and he said he usually advises against it, but because ours is so high (think we got fleeced, but ho hum) then he said we should. 

 

Just sounds plain weird. Everyone I know renegotiates their mortgage deal at the end of their fixed term agreement.

 

Also, he's suggested we consolidate all our debts into the remortgage, something my mate in work reckons is a bad idea, as we'll be paying interest on it for decades, suggesting instead we get the minimum remortgage and just consolidate our debts into a loan with a clear end date. 

 

Depends on the size of the debt, but yes I'd agree with you that consolidating outside the mortgage would be the way to go if you can afford it. If you can't, as a last resort put it on your mortgage and make sure your mortgage has a decent allowance for penalty free over payments and pay off as much extra as you can.

 

A second question:

 

We've done some research online and the options it gives us are two year fixed term and five year, the five year one is sixty quid a month higher - but I'm thinking with Brexit in the pipeline and all that bollocks, it might be the sensible choice. 

 

Again, depends on the size of the mortgage but they've been talking about the baseline interest rate going up for years and it hasn't yet. Take your 2 year deal experiment with it and see what it would cost with the interest rate pushed up 0.5% and 1% etc.

 

Thoughts ladies and gentlemen please? 

 

 

A lot of variables on this one.  It largely depends on your LTV.

If adding the debt makes your LTV prohibitively high, then don't consolidate.

 

Otherwise I'd consolidate the debt as he's said and overpay the mortgage.  The rate is going to be much lower than a consolidation loan.

That way you won't be paying interest on that debt for years.

 

I use an advisor as they can get off market deals and will work everything out based on fees and repayments.

They also fill in the forms for you (mine did anyway) and know how to present it to ensure you'll get the loan.

[REDTALISKER]

Depending upon your circumstances you don't even necessarily have to over pay the mortgage when consolidating debts into it. You can simply reduce the term of mortgage instead. In fact that's quite often a better bet than going the over payments route because as good as it sounds on paper many people find reasons not to do it in practice. Once the 2,3 or 5 year deal is finished you remortgage back to the original term. 

[stringvest]

How do you go about advertising your house without an estate agent? Do you just put it on propertypal yourself? I'm selling mine (currently vacant). It's in a fairly high demand area (considering its rural).

 

 

Sorry, I should have said 'traditional estate agent'; i.e. one of those thieving bastards that charge 1.5% or more commission on the sale.  Online estate agents typically come in between 600 and 800 quid for a standard service, which includes - amongst other things - photos of your property and posting onto all the popular property search sites.  

 

I used Sarah Beeny's company, Tepilo, as she has the best bangers of all the online estate agents.

 

Do the same with your conveyancing too - you'll save a lot of money compared to your old bricks-and-mortar johnnies.  

[G Richards]

Great stuff. 

 

The way this goon described it was that when you stay with the same lender, the proportion of capital you pay off as opposed to interest goes up the longer you're with them, but that when you switch lender you go back to the beginning. 

 

With regards our overall debt outside the mortgage, it's around ten grand, but that puts an extra tonne a month on our mortgage. I'm inclined now to go for that two year deal (it'd come in about £520 a month - we're currently paying £720) then just divert the extra money to debts. 

 

 

I would not consolidate the debt into the mortgage. You will pay much more in the long run. If you don't have the discipline, then that's an option, but you can choose a much better path, in my opinion.

 

Here's what I would do if I were you. Make your monthly mortgage payment smaller with the two year deal, then with the money 'saved' it's best to make sure you tackle the other debts and pay them off as fast as you can. When it comes to paying off the other debts, if you have a few of them I'd recommend a little tool called the debt snowball. It basically works like this: 

 

Make minimum payments on all the debts except the smallest, and throw as much money as you can on it. Once that debt is gone, take its payment and apply it to the next smallest debt. Repeat that as you plow your way through them. The more you pay off, the more your freed-up money grows—like a snowball rolling downhill.

 

It sounds like you have some leverage to do it with the money you are saving on the two year mortgage deal. Once you are debt free apart from your mortgage you can overpay on that and shave years off the term, as overpayments would be on the principal.  

[Tyler Durden]

We went in for recently because our 2 year fixed period was up.

 

She was trying to encourage us to sign up to a 5 year fixed deal (because you pay more for the security of a longer deal) citing that historically interest rates have been a lot higher and showing us what our payment would be if they were to go to 10% (almost quadruple the current payment), she mentioned Brexit and the fact there is a snap election coming.

 

I just said if the interest rates are 10% in 2 years then mortgage payments will be the least of my worries because it will essentially be the end of days because the entire country is on the hook to the housing market and that the government couldn't allow it and if they did we'd all be fucked anyway.

[Duncan Clench]

I would not consolidate the debt into the mortgage. You will pay much more in the long run. If you don't have the discipline, then that's an option, but you can choose a much better path, in my opinion.

 

Here's what I would do if I were you. Make your monthly mortgage payment smaller with the two year deal, then with the money 'saved' it's best to make sure you tackle the other debts and pay them off as fast as you can. When it comes to paying off the other debts, if you have a few of them I'd recommend a little tool called the debt snowball. It basically works like this: 

 

Make minimum payments on all the debts except the smallest, and throw as much money as you can on it. Once that debt is gone, take its payment and apply it to the next smallest debt. Repeat that as you plow your way through them. The more you pay off, the more your freed-up money grows—like a snowball rolling downhill.

 

It sounds like you have some leverage to do it with the money you are saving on the two year mortgage deal. Once you are debt free apart from your mortgage you can overpay on that and shave years off the term, as overpayments would be on the principal.  

 

 

Great advice, this.

 

Avoid putting credit card debt onto the mortgage unless you're desperate or disciplined enough to make overpayments. A low rate of interest is only good to you if the debt lasts the same amount of time. You're on 0% so for now I wouldn't do anything with it.

 

If you get a good mortgage advisor then they're worth their weight in gold. Much like a good accountant. These fellas have to work their arses off to stay up with all the 'products' and rules that change daily, and the commission is crap. If you've got a good one they do the work and give good advice. This is also why a lot are seen as being shite, it's because they're not up to date and see the commission as being too small to put the effort in.

 

Just one thing to add, it MIGHT be worth getting your home valued again so that your LTV (loan to value) looks better and therefore you could get a better rate. From memory, the rate drops quite significantly if you're below 75% LTV.

[The Woolster]

Depending upon your circumstances you don't even necessarily have to over pay the mortgage when consolidating debts into it. You can simply reduce the term of mortgage instead. In fact that's quite often a better bet than going the over payments route because as good as it sounds on paper many people find reasons not to do it in practice. Once the 2,3 or 5 year deal is finished you remortgage back to the original term. 

 

This is also a good idea if you don't think you will be on top of it.

 

However, to counter it, it can also depend on your LTV and what rate you can get. You can currently get more interest from some saving/current accounts than what you will pay the very cheapest mortgages. I'm lucky in that my last property went in value by a ridiculous amount and so now have a low LTV. So I've extended the term of mortgage out as far as I could (32 years), and put excess cash into these other accounts. Once mortgage rates go up above what I'm earning from these accounts (although as mortgage rates go up, savings rates should also go up), then I will overpay on the mortgage. It also means you build up cash in case of emergency.

[The Woolster]

If it is interest free because you got a 0% balance transfer offer onto a credit card, then I would (and do myself) just get another 0% balance transfer when that one comes to an end.

 

Could depend on your credit score, but there are cards offering 36+ months interest free with a 2-3% fee. Its almost free money as long as you remember to transfer before the promotional period runs out. I've been doing it for years, the only issue I've had was when I bought my current house and having the credit card debt impacted on the amount I could borrow, and I was at the max of my budget, but as it is a remortgage, and as long as your financial situation hasn't changed for the worse, you should be ok

 

Also, when you transfer the balance away from your current card, make sure you cancel the credit card and don't leave it as an open account. This has a really positive effect on your credit score as it shows you've had a debt and cleared it as it assumes you didn't need it anymore. Also, it means that after about 12 months, you can reapply for another credit card form that company if they are offering the best introductory deal, which you wouldn't be able to do if you leave the account open as you are already a customer.