Future Mortgages? What can I do

[stevieste23]

Hi hope someone can shed a bit of light my way. Bought a property 3 years ago and got a Mortgage with a company called future mortgages. We bought the property for £189,000, put down a deposit of £20,000. The result of this was a £169,000 mortgage over 30years. We fixed the deal for 3 years at 6%. This deal is now up, but here comes the problem.

Future mortgages are not offering deals to new customers but they say.

Existing customer?

If you are an existing Future Mortgages customer, please be reassured that the terms and conditions of your existing mortgage(s) and repayment agreement(s) are unaffected. We will continue to give you the highest standard of customer care as before.

After the fix rate ends we will run at 2.5% over _base_ rate. So currently will be better off. But know this may not always be the case.

I reckon our house is probably now worth around the £170,000 mark and we probably owe around £166,000. So trying to remortgage with another lender would mean looking around a 100% mortage, which I believe are not available in the current climate.

From what future mortgages are saying they do not have any deals to new customers. So I interpret this as no new deals i.e we cant fix again and are stuck on the variable rate.

Don't want to end up in a situation where rates go sky high and struggle paying the mortgage, but cant see that we have much choice.

Can anyone help or give advice as to what they think would now be our best option?

Thanks

[IFA]

I can't find any up to date info on Future Mortgages as their website is shut down, but as far as I know you're right that they are not offering any deals to new or existing customers so you are probably stuck with just their follow-on variable rate.

2.5% above base is not that bad a deal so as you say, nothing to worry about too much for now, but you clearly prefer a fixed deal if you can get it.

At 97.6% loan to value you will probably find it impossible to remortgage to a new lender. There are some rates around at 90% LTV, but for that your property would need to value at £185,000, or your mortgage would need to be reduced to £153,000.

So not many options but to sit it out unfortunately.

If you are concerned about rising rates then clearly you have a bit of a margin for absorbing this as your new rate will be 3% lower than what you are paying now. On a typical 25 year momrtgage this should save you around £300 per month for the moment until rates change.

Although it's difficult to do when the prospect of more having money in your pocket is looming, the sensible thing to do will be to put aside the amount that you are saving each month (if you are accustomed to paying out £300 more then you shouldn't miss it). Whilst rates are below 6% this will be building up a reserve of funds which you can then draw on at a later stage if rates then exceed 6% and your payment goes above what you are currently used to.

This should hopefully buy you sufficient time to sit it out until one of 2 things happen - either mortgages at 95-100% LTV become available again, or your property rises in value and your mortgage reduces in value to a stage where you are under 90% LTV again.

[brian]

2.5% above base rate is a good rate - many high street banks are asking for much higher than this!

[JamesM]

Great advice from IFA, bank what you save from the low variable rate for the scenario that rates go above what you're paying now...