Upgrading advice

P

Pat

Guest
Hi there, im looking for a bit of advice if anyone can advise.
Been stuck on a fixed rate at 5.05% and it finishes up in mid April. I assume my lender isn't going to be rushing to the phone to infrom me of this and that i probably need to let them know that i would like to revert to a variable once the term is up or does this happen automatically?

Im also looking to upgrade fairly soon. Outstanding mortgage of about 280k, value of property roughly 260k. Hoping to borrow 320k based on a combined salary of 65k (one full-time, one part-time). No loans or debts. One child. Savings of 8k into a work share save scheme that im locked into for another couple of years. Will be 18k plus 7% interest or option to buy shares at the reduced price - currently worth double if it was today.
Based on the above, how realistic is it to expect approval for 320k?
The repayments on a 3yr fixed for 320 would be the same as what im paying now but not sure if that makes a difference.

Would appreciate any advice.
Thanks,
Pat
 
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Re: Its almost over!

Pat said:
Im also looking to upgrade fairly soon. Outstanding mortgage of about 280k, value of property roughly 260k. Hoping to borrow 320k based on a combined salary of 65k (one full-time, one part-time). No loans or debts. One child. Savings of 8k into a work share save scheme that im locked into for another couple of years. Will be 18k plus 7% interest or option to buy shares at the reduced price - currently worth double if it was today.
Based on the above, how realistic is it to expect approval for 320k?
Click to expand...
Given you're in negative equity as it stands, I'd say its quite unrealistic.
320K is 5 times your combined salary (normally a multiplier of only a percentage of the 2nd salary is taken into account), and is a lot of debt to take on, - i'd give it a of thought as to whether i'd want to take in that level of debt if I was you, regardless of what the banks might give you.
 
Cheers for the replies.
What i dont understand is this - i pay a mortgage of 1350 per month now as well as saving 500 per month.
Based on current interest rates, if i borrwed 320k from my existing lender my repayments would be 1320 for 3 yr fixed or 1455 for a 5yr fixed.
So my repayments would pretty much stay as they are.

As for the negative equity. Granted i would have to make up the shortfall of 20k before i do anything.
 
Well its the shortfall and other costs isnt it, consider:
  • Your deposit and negative equity
  • Legal fees (circa 6k)
  • Estate agent fees (circa 5k)
  • Stamp Duty (15k)
I am sure the bank would consider you if you can fund all of the above.
 
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