mortgage indemnity fee PLEASE ADVISE!

clady

I am tied into a 3 year variable mortgage until jan 2011. If i sell before this date i owe the mortgage lender approx £8000! I am a bit lost. Must i change over to a new mortgage product on the exact day my current mortgage product is due to run out to avoid paying this £8000? Are there any mortgage deals that don't have such a high indemnity fee? Once this product is up i probabely will sell and don't want to be tied into another £8000 fee! If i do i will probabely end up in negative equity if i sell given current market!
Any advice would be much appreciated

dunstonh

Must i change over to a new mortgage product on the exact day my current mortgage product is due to run out to avoid paying this £8000?

Any time after the deal tie in date ends is fine to avoid the fee.

Are there any mortgage deals that don't have such a high indemnity fee?

That charge is a early repayment charge. Not a MIG. Although I wouldnt be surprised to see MIGs come back in again. They typically do during falling house prices.

Once this product is up i probabely will sell and don't want to be tied into another £8000 fee! If i do i will probabely end up in negative equity if i sell given current market!

If you intend to sell then buying a deal with a tie in would be pretty daft. So, saying on SVR or going with a tracker with no tie in would be best.

lisyloo

If i do i will probabely end up in negative equity if i sell given current market!

If your mortgage is more than your home then you won't be able to sell unless you can pay off the difference.
You also won't be able to remortgage.

That's because the maximum that lenders will lend is 90% of your house value (not 100%+)

In this case you might be able to get a new deal with your lender (depending on how strict they are about re-valuing) or you might have to stay on SVR with your current lender.
Lots of people with Northern Rock have been forced into this situation because they cannot remortgage.