Should I remortgage?

shimul77

My 2 year fixed rate mortgage with Firstactive will expire in September. My rate was 4.89% for 2 years and 1.1% above the BOE rate after the fixed period which will be 6.1%. from Septemebr. I checked on Firstactive's Website and they do not have any competitive rate at the moment. My question is shall I remortgage to another lender or stick with Firstactive for the timebeing?

My second question is I am thinking to buy a bigger house and also want to keep my present house. So I will need to raise some extra money from this house. But I understand if i say that to Firstactive, they will not lend me extra money. So what is the best reason i can give to Firstactive to get the extra money. As my situation is kind of Home improvements , do u think Home Improvement is a good reason to give?

Any advice will be appreciated.

herbiesjp

In the current climate, you 6.1% deal is very good, especially due to the fact you will have no penalties now on that mortgage, so you will have 100% flexibility.

As far as I am aware FA are fine with raising capital for a new purchase, however if you intend to let out that property they may not allow you to keep that deal.

Always be honest with lenders as to what you are going to do, as although it may seem like "bending" the truth, it is actually a lie and mortgage fraud. But like I say, I do not see a reason to lie here

Capricorn_One

I heard on the news the other week that the average fixed rate is now 7%. I'd stick with the one you have for the time being.

ziknik

shimul77 wrote: »

SNIP

My second question is I am thinking to buy a bigger house and also want to keep my present house.

SNIP

Why do you want to keep your house if you are buying a bigger house?

shimul77

Because the rental income in this area is very good and as the property price is going down i think it's not very good time to sell as well.

ziknik

The same argument goes for the bigger house you want. If it is a bad time to sell, you can force a harder bargain on the house you are buying. Over all, you will gain.

Will the rental income cover your mortgage and costs?

AndrewSmith

shimul77 wrote: »

My 2 year fixed rate mortgage with Firstactive will expire in September. My rate was 4.89% for 2 years and 1.1% above the BOE rate after the fixed period which will be 6.1%. from Septemebr. I checked on Firstactive's Website and they do not have any competitive rate at the moment. My question is shall I remortgage to another lender or stick with Firstactive for the timebeing?

Stick with FA as you are unlikely to get better than that without the upheval of moving lenders etc.

My second question is I am thinking to buy a bigger house and also want to keep my present house.

Is this wise given that mortgage rate are increasing? This is why many BTL landlords have jumped ship and are selling.

So I will need to raise some extra money from this house. But I understand if i say that to Firstactive, they will not lend me extra money.

. Not true, FA will lend for another purchase as long as it is viable and you fit their criteria.

So what is the best reason i can give to Firstactive to get the extra money. As my situation is kind of Home improvements , do u think Home Improvement is a good reason to give?

Tell them that you want to raise the deposit for a second purchase. NEVER tell them that you are doing home improvements when you are using the money to buy another property. They are not always as stupid and naiive as people think and they do reserve the right to check what you are doing with the money. It is their money after all.

shimul77 wrote: »

Because the rental income in this area is very good and as the property price is going down i think it's not very good time to sell as well.

With prices going down that will affect the amount FA will lend you based on the loan to value criteria for the product you have with them. Also lending criteria has tightened up which could also make it difficult to raise the required amount from property A to purchase property B.

shimul77

ziknik wrote: »

The same argument goes for the bigger house you want. If it is a bad time to sell, you can force a harder bargain on the house you are buying. Over all, you will gain.

Will the rental income cover your mortgage and costs?

Sorry for the late reply. I was on holiday.

Yes the rental income will cover my mortgage and i'll have some extra money in my hand as well.

shimul77

AndrewSmith wrote: »

Stick with FA as you are unlikely to get better than that without the upheval of moving lenders etc.



Is this wise given that mortgage rate are increasing? This is why many BTL landlords have jumped ship and are selling.

. Not true, FA will lend for another purchase as long as it is viable and you fit their criteria.



Tell them that you want to raise the deposit for a second purchase. NEVER tell them that you are doing home improvements when you are using the money to buy another property. They are not always as stupid and naiive as people think and they do reserve the right to check what you are doing with the money. It is their money after all.




With prices going down that will affect the amount FA will lend you based on the loan to value criteria for the product you have with them. Also lending criteria has tightened up which could also make it difficult to raise the required amount from property A to purchase property B.

Sorry for the late reply. Just came back from Holiday.

Thanks for your advise. I was honest to them and mentioned that I am buying a bigger house and will rent out the current property. They have offered me the extra money. Valuation was OK and the money will be in my account next week.

Thank you all for your good advice.

I will be now waiting for few more months before buying my next home.