Mortgages

Many mortgages have come up on their two year term for the fixed rate mortgage. This means several in the UK are struggling to refinance their mortgages for better terms in the credit crunch or just dealing with the stretched chequebook. If you are worrying about how your mortgage may affect you there are some options open to you. In April HSBC started to give a rate on remortgages that would match the existing fixed rate mortgage for the next two years. This way you wouldn’t have to worry about the most expensive products on the market or that your mortgage was one of those.

It sounds like a pretty great offer since the fixed rate mortgages have been at 6.71 percent for the last eighteen months. The Rate matcher mortgage has been extremely popular since its release. The trouble is they may take the mortgage off the market. They first decided to offer the product for only six weeks. As it nears June 29th you might not get the chance to refinance with the mortgage. There are some concerns with the rate matcher mortgage though.

Before you decide if this is something you want you need to know the terms. In order to qualify for the rate matcher mortgage you need to have a deposit or equity in your home that equals at least 20 percent. The current fixed rate deal you have must end on or before the end of August. The good news is if you are already have a fixed rate mortgage with HSBC you will need 10 percent of a deposit or equity in the home.

Depending on your current situation this might be beyond your means. Before applying for the mortgage make sure that you have an appraisal done on your home for the value. This could save you a potential rejection if you don’t have enough equity or deposit to give towards the mortgage. Many have been borrowing against their equity to pay off other debts, and if this is you the chance of refinancing for the special deal is probably not there.

The other hiccup you might find in the mortgage deal is the percentage rate. Any and all remortgages being matched will be 4.79 percent or more. If you have something lower than the 4.79 percent the rate will go up to the aforementioned percent.

There is also the arrangement fee to consider. This fee cannot be placed into the loan in order to pay off the cost slowly. Most of the arrangement fees have increased, which means it could be too much with the 20 percent deposit for the new loan. The current arrangement fee for most loans on a 2 year fixed start at 999 pounds for a 95,000 pound loan.

While this sounds like a great deal there is a lot to consider, not the least of which that this product is soon to be off the market and you will need to lock in the rate and close before the 29th of June; a mere nine days from now.

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This entry was posted on Tuesday, June 24th, 2008 at 1:53 pm and is filed under Mortgages. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.