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People underestimate the importance of REMORTGAGES when being homeowner
Hopefully this may be useful for someone
To begin, let’s say Emmanuel has a 360K mortgage with HSBC at 1.79% for 35 years on a house that’s worth 400K. He’s currently paying £1,154 per month
Hopefully this may be useful for someone
To begin, let’s say Emmanuel has a 360K mortgage with HSBC at 1.79% for 35 years on a house that’s worth 400K. He’s currently paying £1,154 per month
SCENARIO 1 - Simple remortgage
2 years pass
House Value - 405k
Mortgage Outstanding - £344k
Emmanuel’s Loan to Value is now 85% so he can access lower rates such as this one with Natwest making his monthly payments £1,127 now
He kept his mortgage term at 33yrs
2 years pass
House Value - 405k
Mortgage Outstanding - £344k
Emmanuel’s Loan to Value is now 85% so he can access lower rates such as this one with Natwest making his monthly payments £1,127 now
He kept his mortgage term at 33yrs
SCENARIO 2 - Keeping payments the same but reducing term
2 years pass
House Value - 406k
Mortgage Outstanding - £323k
LTV 80%
Emmanuel is comfy with his monthly payments so will keep them similar and knock an ADDITIONAL 2 yrs off his now 31 yr mortgage
Now only 29 years left
2 years pass
House Value - 406k
Mortgage Outstanding - £323k
LTV 80%
Emmanuel is comfy with his monthly payments so will keep them similar and knock an ADDITIONAL 2 yrs off his now 31 yr mortgage
Now only 29 years left
SCENARIO 3 - Extending the Term
2years pass
House Value - 394K
Mortgage Outstanding - 305K
80% LTV
House prices have fallen meaning LTV has stayed consistent, emannuel is also expecting his first child, he adds 4 years onto his now 27 year mortgage to make payments manageable
2years pass
House Value - 394K
Mortgage Outstanding - 305K
80% LTV
House prices have fallen meaning LTV has stayed consistent, emannuel is also expecting his first child, he adds 4 years onto his now 27 year mortgage to make payments manageable
QUICK RECAP SO FAR
Emmanuel currently has a 305K mortgage for 31 years with Post office paying £1,053
We go again
Emmanuel currently has a 305K mortgage for 31 years with Post office paying £1,053
We go again
SCENARIO 4 - Paying off a lump sum
2years pass
House Value - 402k
Mortgage Outstanding - 280k
70% LTV
Emmanuel received an inheritance and wants to pay 50k off his mortgage making the mortgage now 230k and LTV 60%. He will keep his term consistent at 29 yrs
2years pass
House Value - 402k
Mortgage Outstanding - 280k
70% LTV
Emmanuel received an inheritance and wants to pay 50k off his mortgage making the mortgage now 230k and LTV 60%. He will keep his term consistent at 29 yrs
SCENARIO 5 - Reducing term to meet a goal
2years pass
House Value - 416k
Mortgage Outstanding - 208k
50% LTV
Emmanuel decided he wants to pay his mortgage off in 10 years and will remortgage to whatever deal will allow him to do so
10 years now remaining
2years pass
House Value - 416k
Mortgage Outstanding - 208k
50% LTV
Emmanuel decided he wants to pay his mortgage off in 10 years and will remortgage to whatever deal will allow him to do so
10 years now remaining
SCENARIO 6 - Borrowing more and increasing term simultaneously
2 years pass
House value - 416k
Mortgage outstanding - 168k
Emmanuel decides to invest in a BTL property and needs 75k. He will borrow more with a new lender but select a longer term of 15yrs to keep payments down
2 years pass
House value - 416k
Mortgage outstanding - 168k
Emmanuel decides to invest in a BTL property and needs 75k. He will borrow more with a new lender but select a longer term of 15yrs to keep payments down
LOAN TO VALUES EXPLAINED https://twitter.com/brickzwithtipz/status/1219584682335010816?s=21 https://twitter.com/BrickzwithTipz/status/1219584682335010816
It’s also important to note that each remortgages arent always a given
Its another mortgage application that will be assessed in a similar way as a first time buyers considering equity rather than deposit but still assessing credit scores and affordability
Its another mortgage application that will be assessed in a similar way as a first time buyers considering equity rather than deposit but still assessing credit scores and affordability
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