It looks like mortgages are going up as we come close to the end of the year. Many expect that the rates will keep going up so it is strongly recommended to lock your mortgage if you are planing to stay at the residence you purchased for some time. If you lock your mortgage today for a 5 year fixed you can still find a rate as low as 3.5% which is records low.

Powered by

I would appreciate any opinion if i'm getting a good deal on the mortgage. it's a tracker (not variable rate) at 4.49 percent above bank of england base rate. currently comes to 4.99 and it is the rate for 15% deposit mortgage. i'm expecting the base rate to rise a maximum of 2% by the time the tracker runs out. is this a sound assumption? btw, the mortgage is being arranged through a mortgage broker since none of the direct bank deals seem to come even close. thanks for any thoughts. yes, we can afford the mortgage if the interest rate went up by 2%, that was the whole reason for getting a tracker. my reasoning for getting a tracker over fixed rate: fixed rate mortgages are generally several percent above trackers in interest rates. for example: if you choose between a 5% tracker (4.5% above base rate) and a 7% fixed rate. lets say that bank of england base rate will rise 3% by the time each mortgage runs out, taking tracker rate to 8%. scenario: bank base rate rises 1% after 6 months, 1% again after 1 year and another 1% after 18 months. calculation on fixed rate (2 years): 24x1300=31,200 on tracker: 1100x6 + 1200x6 + 1300*6 + 1400*6 = 6600 + 7200 + 7800 + 8400 = 30000 all figures are approximates ofc. i would also do overpayments while the rate is low further increasing the savings. think the economists call this "cost average effect". anyway i wanted to know if i'm getting a good deal in comparison to other trackers available (not variable rates).

There are 2 Year Tracker mortgages available at 85% LTV @ 3.29% above Bank of England base rate so I think it may be worth you getting a second opinion before applying for the mortgage quoted above . You should speak with a mortgage broker about the impact on your monthly payments of various increase in the base rate. Whilst your assumption may prove to be correct nothing can be taken for granted and you need to ensure the mortgage is affordable for you if base rate exceeds 2%. Disclaimer: The answers above are for guidance only and should not be acted upon without you receiving professional mortgage advice relevant to your circumstances. To find an independent mortgage adviser please go to http://www.unbiased.co.uk

Powered by

I am a self employed prospective home buyer. i will be graduating in may with a ba in landscape architecture. this is what i have run into.. i have just filed my first year of tax returns. so basically the business is under a year old. my credit score is around 730-740. the problem mortgage companies have been telling me i have is lack of employment. althought i know money is not a problem, i can not just promise them. also i have $60,000 in available credit with $2,000 used. where should i go to get the best rates? one company told me about a variable program with a 8.5% rate. this seemed high to me. what can i do to get a mortgage?

Check out your local bank. Som people don't follow comunity policies and would like to spam here, but you bank will be much more reputable.

Powered by

I was just checking our various mortgage deals through comparison websites. specifically i want to see available tracker (bank of england base rate) mortgages. but almost every time you find a seemingly good deal and investigate further it turns out it's in fact a variable rate (lenders inter lending rate). why are lenders allowed to misrepresent their products like that? if i'm not grossly mistaken the tracker is tied to central bank base rate and the variable to lenders rate. i understand variable rates are harder to sell but why on earth would they show up as trackers on search engines, comparisons, even lenders website categorisations? surely there is no suckers that actually fall for that?

Even when BoE trackers were being sold, some lenders were selling 'discounted rate trackers' and 'inter Bank rate trackers' and all sorts of other names that tracked everything under the Sun ... Some products called 'Base Rate Tracker' ACTUALLY tracked the inter-bank rate and NOT the BoE rate = this caught out a very large number of people... .... and yes, people do fall for it = many people can't even work out a 'percentage', let alone understand what Compound Interest means to their Credit Card balance when making minimium payment ... and as for AER, BoE, RPI & CPI many people simply have no idea what you are talking about ... On the other hand, a lot of BoE - x% deals where sold, (some > -0.5%) ... and SOME lenders actually did PAY their borrowers when eg. their BoE - 0.75% deal resulted in the lender owing the borrower 0.25% every month :-)

Powered by

What can i do with my interest rate that is now variable? now that my property decreased $15,000, the monthly payment is now way higher, i don't want to pay the mortgage anymore, and i can't pay two houses at the same time, i don't know what to do if i want to cancel everything is going to cost me about $50,000, and the only choice i'm aware of is declare bankruptcy and my credit is very good, and i don't want to do that, i need help.

See if you can convert your mortgage(s?) to interest only for now - it will greatly reduce you monthly payment. As for property decreasing in vlaue - in what way does this make your payment higher? I can appreicate the TEMPORARY loss of equity - but the only thing that should increase your monthly payment is an increase in the interest rate. Interest only mortgage should save you (very roughly) about 25% assuming you have a typical duration mortgage, even more if your mortgage is a short term one. You really ought to speak with a financial adviser OR talk with someone from the mortgage company, taking advice from Y!A over something this important is perhaps not the best plan possible - which includes MY thoughts - speak to a professional - and mention any ideas that people throw up on here that seem like they might be worth discussing. Mark

Powered by

More details: i have a mortgage 30 year fixed (6.5%). i have paid on it for about 8 years. i owe approximately 100k. i also have a heloc for 44k that is adjustable, interest only payments and expires in 2017 (at which time i have to pay it out or re-fi). i may or may not be living in this house at that time. the house would appraise for enough to finance all of it, but not sure if it is a good decision to refi it into one lump 30 year fixed mortgage (with fees and all involved). any advice would be helpful.

what you need is a calculation of the monthly payments, both principal and interest, of each option. Be sure to get one of the refinance at the remaining 22 years, in addition to the one at a new 30 year amortization. this lets you compare apples to apples. Once you determine the difference between the new 22 year amortization of the 144k loan at the current fixed interest rate, compare it to the combined payments you make today. It should be lower. Divide the cost savings into the total cost of the refinance. Fees, points, etc. That will give you the number of months it will take for you to get back to even. After that, you will be money ahead each month. If you get back to even in less than a year, its worth considering the deal at a 22 year amortization. Now, also get the 30 year amortization payment. This will be significantly lower than the 22 year, but you will end up paying a lot more principle in the end. Now, if you actively invest the money you are going to save, you'll be better off going with the 30 year amortization, because mortgage interest is tax deductible, and its easy to beat the mortgage loan rates less the tax you would otherwise pay on your income. Typically a person can lop off about 1/3 of the mortgage rate, and say that is their "hurdle rate" for investing the money you save going with a longer mortgage amortization. If you will not invest the difference in the monthly payments, and instead spend the money, then you need to be well aware of what you are doing. You are taking out a loan at the mortgage rate less your marginal tax rate (probably something in the neighborhood of about a 3.5% net interest rate, over 30 years, to buy whatever it is you plan to buy with the money you save in monthly payments. If you are doing it to be able to hang onto your house due to reduced income, that's okay. That means you are basically investing the money in a house. But if you plan to buy a car or anything else that does not go up in value over the long run, just be sure you understand what you are doing, relative to your current financial position. Good luck. Feel free to email if you want a better explanation

Powered by

I owe about 35k on my 2nd mortgage (15 years left) and my home equity is about 134.5k on my property.my 1st mortgage is fine,it's a 30 year fixed,at 5.875% and i don't wanna change that at all.i understand that a home equity line works like a credit card.i only wanna borrow as much as i need (in this case approx. 35k) and then pay it off.here's my question:do i need to pay the amount i borrow from my home equity line off right away (like an amex credit card) or can i pay it over time? i'm thinking about just to pay like a $1000 each month (out of the eloc) on my 2nd mortgage (right now i'm paying approx. $360.00 per month),because i'm afraid that the interest on the eloc can go up to max.18%,since it's variable (the offer right now is 5.39%).any suggestions anybody?

It looks like you are 'over-thinking ' this a bit. your possibilities are: a. refinance (the terms now are about 6%) and consolidate all that into your mortgage. b. ELOC (terms are also good 6 - 9%. but I would NEVER do a variable rate ELOC. that is a mistake, even in good times. Time and money are linear. paying off one type of loan at the expense of another isn't logical. Your Best Bet for the long term is to consolidate your 1st and 2nd into a 30 yr fixed at about 6%. Pay the points to get the rate down. And never let them tell you its just like a credit card.....cuz if you dont pay your credit cards....they dont take your house. I highly suggest using an excell spreadsheet to chart this out. You'll see that in the long term, you will pay a lot less. wer.

Powered by

The reason i'm putting this in weddings is that i'm here most of the time and figure there are people here in the same situation. thanks for your help!! i know a fixed rate mortgage is better than a variable (9 times out of 10). i have looked at some of the calculators online and am having trouble with the tax and insurance rates, as i will be a first time buyer. any ideas where i can find that information? any general suggestions? we are working on paying off our credit cards, car, and student loans.. saving as much as we can for a down payment.. just under a year ago, my credit score was in the mid to upper 600's (depending on the credit company). i will be checking my credit again once it's been a full year. also, just as a side note, i am not looking to e-mail someone to get approved for a loan. i am nowhere near that point yet, but thank you for any advice you can give.

1. Know what the maximum monthly payment you can afford is - for tax, house and insurance. 2. Based on this amount you can fool around with the calculators to see what the total cost of a home you can afford would be. Your taxes and insurance rates will be based on the cost and worth of the house, sq footage, size of lot, etc., not on the fact that you are a first time buyer. You definitely want a fixed rate mortgage. Don't even bother with the other, its a nightmare. When you get your loan, amortize your property tax into your monthly payments so you don't have to worry about saving that money each year and paying it out of pocket. You can do this with your insurance as well..in fact on most loans this is required for insurance to be part of the payment. You can choose your insurance agency, but you pay a year in advance through your escrow acct. For an idea of what the taxes will be, get on www.rmls.com and do some searching for houses in your area. They list the property tax right on there. Most FHA loans require a 3% downpayment....some FHA and other loans don't require any downpayment. Here is our scenario, we just bought in October: 1500 sq foot house, 3 br, 2 bath, 1/4 acre lot, house built in 1977...we paid $199,500 for it. 6.5% APR We paid $5280 as a down payment and another $2520 for the years property tax. (In Oregon prop tax is due in November..since we bought in October we had to pay the whole year up front. Dependign on when you buy, you will pay the following months in tax up front) The seller paid up to 6% of the closing costs up front...so they paid like $6,000 or something, cant remember, toward the cost of the house, our first year of insurance, a home warranty, closing costs, etc. After all was said and done, our final loan amount was $195,000. Our payment for the house alone is $1298, add insurance and property tax into that each month and our payment total is $1617 a month. Don't freak on that amount...we opted to give less of a down payment so we could buy new furniture, etc. for the house... plus we can well afford it. Just make sure you don't get into something you can't afford...its not worth it.

Powered by

I currently have a mortgage that recently went from a fixed rate (for the first five years of the loan) to a variable rate (to be assessed annually for the rest of the 30 year mortgage). the loan goes variable for the first time this month. original interest rate = 4.375%. new rate for this coming year = 5.0%. the bank has offered to fix the rate for 5 more years at 6% for a fee of $500 (we pick up where we left off--not reestablishing 360 more payments, no closing costs, etc.) is this a good deal? two more pieces of information: the interest rate cannot increase by more than 2% this year and next year. and it cannot go up by more than 6% over the life of the loan (in other words, it will never be more than 10.375%, and if it ever did, i would obviously refinance.) but how 'bout this $500 deal? is it worth it?

As a former mortgage broker, I would suggest finding out what it would cost to refi into a fixed for 30 yrs conventional mtg. and what the rate would be paying 0 pts. And compare the payment difference between this deal and the refi. The best thing is only answered by how long you plan on staying in the home and what market values are doing in your area.