The manner the question is posted looks like this is a homework for school. there are many calculators avalable to answer this question. Visit my website www.victorcatalan.ca and plug in the numbers so you can get the answer. You need to understand how this question will be translated to the calculator to get the answer.

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I'm about to renew my mortgage and am looking into various options. given the current economic climate and the fact that interest rates have been incredibly low over the past year or so, i'm wondering whether a fixed-rate mortgage option is better than a tracker rate. fixed-rates are higher but will protect me from any rate increase... however tracker rates being lower, it would take several rate increases for them to become less compelling than a fixed rate... any advise?

I'd rather have fixed mortgage.

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We have a 25 year mortgage which renews every 5 year term. what happens at renewal time? do we have to re-qualify for the mortgage every term? or does it automatically renew with the latest interest rate? we are not behind at all but our credit is not good like it used to be which worries us about our mortgage renewal coming up.

It may be difficult to read your mortgage papers but you will have to or you will have to get someone to do it for you. There are hundreds of kinds of mortgage loans out there that sound very similar. I would imagine that you will not have to re qualify for this loan but who knows? I could tell you some bad stories about what happened in Texas during the Savings & Loan crisis in the late 80' early 90's but I really believe as long as your house payments have been on time and your mortgage company is actively making loans you will be fine.

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I am currently trying to renew my mortgage on a shared ownership property, i'm looking for a fixed rate and to get it sorted soon, before the interest rate goes up next year!

There are approx. 7 lenders who are still offering shared ownership mortgages but it can be a bit of a minefield as they each have differing conditions. These can include the minimum or maximum share, conditions on stair-casing and deposits depending on the type of property. You should seek advice from an Independent Mortgage Adviser who is experienced in this area to ensure that you meet the lender's requirements as well as that they meet yours. Many advisers do not charge fees for their services as they can receive commission (known as a procuration fee) from the lender for introducing you. I have a client who had 3 applications declined before coming to me as they didn't meet the lender's criteria. this can then have a detrimental effect on your credit score so it is best that it is done right first time. Finally if you do want to go alone on this the main lenders as Woolwich, Nationwide, Halifax, Abbey and Leeds.

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I am getting into 25% shared ownership property; i have 8 months remaining on my permit. basically i applied through countrywide mortgages for £50k loan to halifax, they approved it first then i did all the valuation, insurance and housing association procedures. after two weeks they came back to me that they are stopping my application. i appealed & found that condition is 27 months left on your permit (and fair credit score & rating) to get a mortgage. now woolwich, abbey, and other building societies have same rules. that means when i renew my permit after 8 months (for 3 years) i will have 9 months to find a property, gather all the monies and apply for a mortgage. so if i don’t do that i can’t own a property for another 3 years. the only reason i am writing this post today is i found a lender who is willing to take risk on me at a higher interest rate of 12.75% with 5% deposit. now what i am planning is i know the interest rate is not acceptable its way to high, but i have found the perfect place, its a 2bed apartment, i am single will rent the other room to my mates who will pay me a almost £700 as rent. now i am taking this expensive mortgage on one condition that i should be able to re-mortgage it after i renew my permit. this way i will be able to get this place which is at fantastic location 5 mins to high street, 12 mins to piccadilly line, 4 mins to br station. coz if i rent another place, i will end up paying £500/month & i won’t own it. this way i will stretch myself a bit for a year then once i re-mortgage it the payments will go down by £200/month. calculations: property value: £195,000 25% £195,000 = £48,750 minus 5% deposit i.e £2450 so the mortgage will be for = £46,300 ----------------------------------- ----------------------------------- ----------------------------------- ------ i will try & minimise my repayment to be £500/month rent on 75% is £305.00/month council tax = £100/month bills - £100/month service charge - £50/month insurances & other - £50/month total = 1105/month thank you very much for reading my calculations & problem, all i want is advise if i am doing it right, am i being getting into something i will regret later about these lenders they are very good in changing their terms & conditions. but also housing association does not allow deals with each and every lender so should i take it that it would be fine, or any suggestions where it might go wrong. i would really be very thankful for your comments all the best in what you looking for. kind regards schofield

It almost always better to buy than it is to rent. One thing you need to do immediately is to start saving for emergencies. What if you became ill or were injured? You need some back up money. Stay away from Countrywide. Even though they are revamping, they have faced a lot of trouble. Not a good option right now. Take the higher interest rate and pay all of your bills on time. Then refinance for a lower interest rate when your credit score goes up.

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I am asking this question way earlier than i need to but the rapid rise in uk interest rates is a bit worrying! i took out a fixed-rate (4.79%) interest rate this time last year when i was a first time buyer. it is fixed for 2 years meaning that i will need to renew by april 2008. can anyone please advise on how to go about remortgaging, how much time it takes, any extra costs that need to be considered etc. my dream is to switch to a repayment deal but, with interest rates rising in the uk, im not sure if i will be able to afford it. i'd be very grateful for any mortgage renewal 'do's' and 'dont's'. thanks.

I'm going to assume 'no overhang' - i.e. in Apr 2008 you can remortgage without penalty. You existing lender should write to you the month before the end date advising you of your options (sometimes they will offer you another deal, sometimes they just say 'you are on our standard rate') There should be plenty of special offers available ... assuming you end date is mid April, you can assume it will take about 4 weeks for a straight forward remortgage, so you should start looking for a new deal end Feb/start March. As for do's & don'ts ... Main 'do' == when the first deal comes to an end, always look for a better deal - often your existing lender will often give you another deal if you ask ... Main don't' = don't 'cash in' early (all special deals have crippling penalty charges) I recommend you create a spreadsheet to calculate total costs over the next 2 or 3 year deal ... don't just focus on APR - 'application fees', 'legal fees' & 'closure fees' all vary and you need to see the total cost.

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Please help, i moved in with my boyfriend 7 months ago, and pay my way. he split up with his ex back in january, but she didn't move out til april, she stopped paying anything towards the house as soon as she moved out. we do both want to get her off the mortgage, but she wants 3 grand as a payout, ( she didnt actually put down any money at the start of her mortgage, my boyfriend paid the deposit). we can't actually afford this amount of money in one lump sum, but she isn't willing to have monthly payments which we have offered. my boyfriend has been told that if he transfers her off the interest rate will go up from 5% to 7% (or something like that) which means his payments will go up by around £200 a month. or they have said if he keeps on the mortgage with his ex then he can renew it with a new fixed term for 2 years at the lower rate. obviously this seems like the obvious answer but i don't think i am prepared to live there for another 2 years knowing that she still owns half the house. (she has agreed to this) but bearing in mind this girl is crazy, stalks me finds out my mobile number and texts me accusing my fella of cheating on me with her ( even though i know for certain this is not true) please help and advise as i'm at my wits end!!

well all i can say is unless you can come up with a better financial plan quick you will have two years of living hell -- just for kick what would happens to the payment if he replace her with you on the mortgage!!! i am assuming you have excellent credit and a great job!!! should it be a wash i can see see why the two of you could not come up with 3000 pounds!!!

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Hi guys, i am new with this interest and payment thing. can someone jump start and help me out on this question . thank you .. christina just purchased a small four-unit apartment building for $600,000. she financed it with a mortgage loan equal to 75% of the purchase price and paid the equity balance with cash she received from an inheritance. interest on the mortgage loan was charged at 7.3% per annum compounded semi-annually and was to be repaid in equal monthly payments over a 25 year amortization period. the mortgage loan was for an initial term of 5 years at the end of which time it could be renewed at the interest rate prevailing at that time. the mortgage also included a prepayment provision that gave christina the option to pay a lump sum equal to a maximum of 15% of the initial loan principal on each anniversary date, if she chose to. required: what monthly payment will christina have to make to service the mortgage loan?

I'll have to get back to you on the answer, but meantime, try searching the internet for a mortgage calculator. That should help you to figure it out.

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Hi guys, i am new at doing interest and loan can some one help me just start on this question. thank you christina just purchased a small four-unit apartment building for $600,000. she financed it with a mortgage loan equal to 75% of the purchase price and paid the equity balance with cash she received from an inheritance. interest on the mortgage loan was charged at 7.3% per annum compounded semi-annually and was to be repaid in equal monthly payments over a 25 year amortization period. the mortgage loan was for an initial term of 5 years at the end of which time it could be renewed at the interest rate prevailing at that time. the mortgage also included a prepayment provision that gave christina the option to pay a lump sum equal to a maximum of 15% of the initial loan principal on each anniversary date, if she chose to. required: what monthly payment will christina have to make to service the mortgage loan?

Assuming an initial loan balance of $450,000 (75% of $600,000) and an interest rate of 7.3% per annum compounded semi-annually over 25 years, Christina's monthly payment would be $3,235.66. I used a loan amortization spreadsheet from the DCF Models website for this calculation.