Should I abandon this fixed rate?

Cake_Eater

Our current fixed rate deal came to an end with Alliance and Leicester. We are in the process of remortgating to Nationwide to a two year fixed rate at 5.88%. We have paid 599 arrangement fee. We have been given a potential completion date towards the end of November. We have LTV of 67%. Then the base rate fell.

There appears to be better fixed rates around now as the base rate has dropped. There is also a strong hint that the base rate may come down again, does that mean even better fixed rates?

I was wondering whether it woud be worth me abandoning my deal with nationwide, stick with A&L SVR and hold fire for a few more months to see if fixed rates come down.

I am not too sure if indeed I can abandon the deal with nationwide. I have looked at the paperwork. It implies that I would lose my arrangement fee of 599 but that I would not have any ERC until I completed which I haven't yet. The only other thing could be the legal fees. They were part of the deal so would they charge me for the work they had done? Anyone had any experience of this and any thoughts on my suggestion of waiting a few months. We would like a fixed rate as money is very tight.

If i do abandon, what affect would that have on my credit rating? Many thanks

paulfaz

Have you approached the Nationwide to see if they can better the 5.88%?

I would also clarify that you DEFINITELY don't have to pay the ERC. I suspect you may have to - get this in writing aswell as legal costs etc before you cancel.

Have A+ L offered you a fix if you stay?

Cake_Eater

I haven't spoken to Nationwide yet. Dreading it. On the phone for hours being transferred from here to there.... but that's another story. Also I wanted to see if anyone had any experience of this - good or bad so I might be a bit more sure of my ground when I speak to them.

A&L were not competitive at all when we approached them to see what they could offer us to stay. I will look again, in case they are now.

Cat695

i know halifax do 5.23% and thats with 80%LTV so I'm sure you can get a better rate than 5.88% with that LTV

JayZed

You should pull out of this fixed-rate deal. Yes, you'll lose your £599 arrangement fee, but you will easily make this back on a fix at a lower rate. It won't affect your credit rating at all.

I think your best option is sitting on the SVR for a few months - I think fixed rates will be lower by the spring.

Cake_Eater

Ok I have called Nationwide. They say I can pull out and I will not be charged a thing and not only that they said I would get my 599 arrangement fee back! I triple checked this with the guy. I don't believe it. Shall I ring and ask someone else!

beecher

Cake_Eater wrote: »

Ok I have called Nationwide. They say I can pull out and I will not be charged a thing and not only that they said I would get my 599 arrangement fee back! I triple checked this with the guy. I don't believe it. Shall I ring and ask someone else!

That's good news. I phoned Halifax to ask if it was possible to change a fixed rate I'd signed up to and they told me that normally they'd say no, but that at the moment they'd allow it and would pay the arrangement fee back. So maybe it is the way things are going to be for a while after the huge decrease in BoE rates.

y3andy

I have been wondering this as well for my mortgage. I am remortgaging to the HSBC with it due to start from 1st of Jan 2009. I have paid the arrangement fee but with the rates coming down I believe I could get a far better deal now. I have however signed and returned the mortgage offer so does this mean that I am legally bound to take out this mortgage.

On my mortgage offer it says this. "If you accept this offer you will not have the right to change your mind and withdraw from the agreement after the mortgage is drawn down. However you can repay your mortgage in full (suject to early repayment)"

What does it mean by drawn down? Does this mean when I send the mortgage offer back signed (which I have) or does drawn down mean from when I actually start the mortgage with the HSBC (Jan 1st) and they have paid my current lender?

Gorgeous_George

Cake_Eater wrote: »

Ok I have called Nationwide. They say I can pull out and I will not be charged a thing and not only that they said I would get my 599 arrangement fee back! I triple checked this with the guy. I don't believe it. Shall I ring and ask someone else!

Nationwide - proud to be different.

GG

beecher

y3andy wrote: »

I have been wondering this as well for my mortgage. I am remortgaging to the HSBC with it due to start from 1st of Jan 2009. I have paid the arrangement fee but with the rates coming down I believe I could get a far better deal now. I have however signed and returned the mortgage offer so does this mean that I am legally bound to take out this mortgage.

On my mortgage offer it says this. "If you accept this offer you will not have the right to change your mind and withdraw from the agreement after the mortgage is drawn down. However you can repay your mortgage in full (suject to early repayment)"

What does it mean by drawn down? Does this mean when I send the mortgage offer back signed (which I have) or does drawn down mean from when I actually start the mortgage with the HSBC (Jan 1st) and they have paid my current lender?

Phone them and see - I had also signed and returned my HBoS mortgage offer but was allowed to withdraw as it wasn't due to start til Jan 09. We're in unusual times so may as well ask, especially if HBoS and Nationwide are both doing something similar.

JayZed

y3andy wrote: »

On my mortgage offer it says this. "If you accept this offer you will not have the right to change your mind and withdraw from the agreement after the mortgage is drawn down. However you can repay your mortgage in full (suject to early repayment)"

What does it mean by drawn down? Does this mean when I send the mortgage offer back signed (which I have) or does drawn down mean from when I actually start the mortgage with the HSBC (Jan 1st) and they have paid my current lender?

The latter - drawdown is whan you actually get the money. So you can withdraw any time up until then. Normally you would expect to lose your arrangement fee for doing this, but it seems that some lenders are being nice about this!