remortgage advice

davidthehairymammoth

Hello forumers,

This is our first post in any forum so maybe information we offer will be inadequate however:

We would like to remortgage 1 of our 2 mortgages as it is coming to the end of its fixed term period. It is for a total of about 11% of property valuation. The 2nd mortgage is for about 27% of valuation of propoerty but the fixed rate is good for a couple of years yet. The 1st mortgage fixed rate end is 31 October 2008.

Is this remortgage for the 11% as straight forward as it seems or are there particular pitfalls we should be aware of?

Joint income c.£55k, unsecured debt approx: £194/month repayment.
House purchased for £235k but we have extended by 2 bedrooms and extra bathroom; probable valuation now £375k (from web enquiries)

if other info required please ask, we wondering also if any benefits in trying to harmonise both mortgages in to 1 and running with this option?

Grateful for all/any advice.

herbiesjp

Are these two mortgages on the same property with the same lender?

If so, you would not be looking to re-mortgage at present, rather getting a product switch for the deal that has expired on the first portion of the mortgage

Try and get a new deal that will expire around the same time as the second portion, but be careful to look at what arrangement fees are attached to any new deals.

Going on their standard variable rate for this 11% could be another option as it gives you 100% flexibility with that part of the loan i.e. no tie-ins at all, can overpay as much as you want

davidthehairymammoth

Thanks for this. The mortgages are with same lender and on same property; we took this approach as it provided most cost effective option at time to keep the (now) 11% mortgage asthe penalties attached to ditching it were the most punative.

what isa poduct switch? is this extending the 2nd mortgage to include the value of the first?

if take the svr mortgage option should we hold this until 2nd mortgage tie-in period is through and then re-assess for full amounts then due?

herbiesjp

what isa poduct switch? is this extending the 2nd mortgage to include the value of the first?

No - It is putting the 11% mortgage part on to a new deal - not extending the second mortgage

if take the svr mortgage option should we hold this until 2nd mortgage tie-in period is through and then re-assess for full amounts then due?

That is correct - once the penalties expire on this second mortgage, you can then have the full mortgage amount on one rates either with the same lender or with a new lender

At present beacuse you have two deals, which expire at different times, means that you are not really in a position to chnage lenders. I'm guessing the rate on the second part is lower than what current rates available now are.

davidthehairymammoth

Thanks again; this seems to make sense. We will have a discussion with Nationwide (current lender for both) and assess what they offer in light of your suggestions.