Northern crock

getreal_3

oh and thanks Cazza even without yr morning coffee you got it right

also the fact that he has already got us the offer, will that affect us getting any other offer?

happybroker

the rock's svr is 7.49% just now.

my concern is the early repayment charges on the new mortgage & the fees in setting up a new mortgage if you are selling and not buying a new place. Staggering.

There are deals out there at less than 7.49% with no lender fee at 90% ltv but you would still have to pay for a valuaton and legal fees.

Does you advisor know that the property is up for sale and you're not buying another? If he does how is he justifying the cost in repaying the mortgage when the property sells?

Are you aware that getting a decision in principle more often than not involves a credit search?

It's not for me to say you need a different adviser but there are plenty of questions that need answering.

getreal_3

the deal he has picked is fixed for 3 years with a 3 % redemption in the first year 2% in the second year and 1% in the third...

again i must stress that what i am most concerned about is whether or not to include this unsecured element.. isnt it mad to secure more money on the house especially in this climate..

regarding selling, the situation is ww would like to sell but cant be sure whether we will, i wish i could be more decisive but at the moment are personal circumstances are unsure so it is really 50/50 whether we sell...

happybroker

with the together mortgage the loan is effectively secured any way. If you stopped paying Northern Rock they would be looking to recover both amounts from you.

if the loan is over a short term then I can understand your anxiety about stretching the finance over the term of the mortgage due to overall cost.

if this is a loan that is completely seperate to the mortgage, ie not taken at the same time and paid by a seperate direct debit, maybe taken for a car for instance then that's a completely different matter and I can understand why you wouldn't want to lump that in with the mortgage.

I think that locking your self in again while you are still deciding wether to sell or not would be a mistake which is why I keep bringing it up and i think you really need to make that decision before doing anything with the mortgage.

getreal_3

thank you for making it a bit clearer, the loan is def part of the mortgage and I can see where yr coming from that it is more like an extension of the mortgage.. therefore I am guessing that means that it probably would be better to add it on.. i guess i just hate the thought of having so little money in my home :-(( but at the same time i realise that its just the same as having the loan seperate. I also thought if the loan was seperate i may be able to pay it off quicker ie if my mortagge payments were £1100 I would be able to pay £400 a month for the loan... not sure if that would work out better from an interest point of view as I wonder what I would pay interest wise on a 25k loan over 25 years?

Unfortunately we are in a very complicated situation that means circumstances will dictate whether we will put the house on the market and even then as we have neighbours from hell that will put off a lot of buyers

getreal_3

the other thing I didnt consider and not sure why my adviser idnt tell me is whether this is interest only or repayment!

getreal_3

Have just looked at First Direct Tracker mortgage which loked quite good for our circumstances... no tie in and low fees.. ? we have ben banking with irst direct for 9 yrs and they have always been fantastic

JimmyTheWig

If you are remortgaging, you need to ask the question "how much will this mortgage cost me if I sell the house in six months time?".
If you have a 3% redemption penalty and sell you house after six months that would be the equivalent of an extra 6% increase on the interest rate. Don't just look for the lowest rate - look for the mortgage that suits you.

If you are not sure if you are staying or going I would have thought the best thing to do would be leave your mortgage well alone.
If you are sure you are going then you may be able to get a better deal by switching mortgage and you would be looking for no tie in and lowest fees possible. Look at arrangement fees, exit fees, valuation fees, etc. As an example, if these fees come to £600 then this is about the equivalent of a 0.5% interest rate increase if you hold the mortgage for 6 months.
If you decide to stay then you can look at a longer term mortgage and think about getting the interest rate down.

getreal wrote: »

I also thought if the loan was seperate i may be able to pay it off quicker ie if my mortagge payments were £1100 I would be able to pay £400 a month for the loan...

If you can be disciplined about this then the best way is to add it to your mortgage but make overpayments on your mortgage. Most mortgages allow overpayments of 10% per year - you'd be well within that limit. £1360 mortgage repayments have been mentioned. This would leave you £140 a month in your budget to overpay your mortgage. This would really help reduce the amount of interest you will pay on this loan.

getreal_3

okay quick update, spoken to my advisor and have to say i feel gutted as he is also a friend and I do not think he is doing whats best for us

The halifax mortgage is interest only and has the 3 yr redemption previously spoken about. We explained even before he applied that we did NOT want a mortgage with a redemption, still he went ahead. Toda we spoke to him and explained this was rediculous as we wanted to move and was going to be putting house on the market in 2 weeks. He still said that this was the best mortgage as hardly any other company are offering to take on our unsecured and that there arent many 80/85% LTV most are either 75% or 90% mortgages so it was in our interest to take this


helpppppp I really do not think this is right for us but not sure who else to speak to I really wanted a repayment mortgage and something without a redemption. I can afford max £1450 ideally a mnth. the house we think is worth £250000, maybe as low as £235,00 worst case and our mortgage is 202 k and unsecured is 25k

Cazza

Have you though about just staying with NR and paying the Standard Veriable rate? No costs to remortgage, no tie ins and SVR is currently 7.49%. Interest only the payments will be just over £1400 per month, but you'll struggle to find a remortgage rate with no ERCs which will be much cheaper. You can over pay by £50 per month, so at least you're doing something towards a repayment mortgage.

This way, you can sit back, see how things go when you house is on the market and have another tink about things in 2-3 months time depending on whether you have a sale or not.