Another Remortgage Question

Sammy_Girl

Hi All,

I'm hoping someone could please help me with a couple of questions.

We are on a 2 year fixed rate of 6.34% with SPML/Capstone after being referred to them by A&L. This deal ends on 31 March 2009.

Last month, OH enquired with London and Country about remortgaging. To our surprise, we were told that we qualified for an Abbey product - 5.84% fixed for 3 years with a £999 product fee. We passed the credit checks and are now at the stage where I have to send them my last month's payslip and OH's last 3 years signed accounts (he's self employed). I have also paid the £330 valuation fee which was charged to my CC just before Christmas.

The Abbey product that we are applying for is a maximum 85% LTV. We bought our house in May 2007 for £205,000 and I know that house prices have fallen. We would need to borrow £173,000. The more I think about it, the more I am sure that the valuation will not come anywhere where it needs to be for us to qualify for this product.

So my first question is, would we be able to cancel the application for this product at this stage and get our £330 refunded. We have not signed anything and as far as I'm aware the valuation has not been done yet. I'm loathe to lose £330 when I'm 95% sure that we won't pass the valuation stage.

If we were to continue with our current lender, then on the 1st April we would actually switch to a tracker product for the life of the mortgage. Ours will be BOE + 2.49% - which at the moment would be a very good option indeed.

So my second question is, if we stayed with SPML and went on to the tracker, please could someone work out how much we would be saving a month on our current payments. I know with the Abbey product, we would be looking at saving approx £50 per month.

We currently pay £1039 per month, and as of 01 April we will have 33 years left remaining on the term.

Apologies for the long post, but I would appreciate any advice.

Many thanks

mummytofour

Try putting the figures in here


http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml

Sammy_Girl

Thank you so much MT4 :j

According to the calculator my new payments would be £793.39, saving me about £250 a month - very appealing!

I would have to save that £250 in a savings account though as our terms state that we can only make overpayments in lumps of £2000 (plus £65 admin fee :mad: )

I shall get OH to call the broker to see about canceling the product and getting our £330 valuation fee refunded. I really hope that they do as I could add that £330 to the overpayment pot!

beaujolais-nouveau

Sammy_Girl wrote: »

We are on a 2 year fixed rate of 6.34% with SPML/Capstone after being referred to them by A&L. This deal ends on 31 March 2009. ... If we were to continue with our current lender, then on the 1st April we would actually switch to a tracker product for the life of the mortgage. Ours will be BOE + 2.49% - which at the moment would be a very good option indeed.

Doesn't that depend on who buys Capstone's UK mortgage book?

luckyfool

beaujolais-nouveau wrote: »

Doesn't that depend on who buys Capstone's UK mortgage book?

No. Why would it?

If the mortgage contract between the OP and Capstone said that it reverts to 2.49% above BBR, the fact that Capstone transfer their obligations and right to receive interest to a new buyer doesnt change the terms of the contract. You just have a new party taking over from Capstone as the lender.

dimbo61

When your mortgage goes onto the tracker at 3.99% ( todays figures ! )
see if a whole of market broker can get you a long term 5 years fixed at a good rate which allowes unlimited overpayment or at least 10% a year without charging an admin fee of £65 !! each time an overpayment is made.
Does the admin charge apply if you ask to keep the same mortgage payment each month ?

Sammy_Girl

Thanks for the posts Guys, much appreciated.

The plan was to remortgage with Abbey at 5.84% fixed for 3 years (saving £50 a month), but for the deal to go through our house could be valued at no less that £203,000. We bought for £205,000 in May 2007, so highly unlikely we would achieve the valuation we need. I would rather put the £330 valuation fee towards overpaying and save the on the £999 arrangement fee too!

We have decided to just let the fixed rate run out and to go on to the tracker. We will save the £250 in an ISA and make a lump payment when we reach £2k.

Interesting reading about the Capstone book being sold on, but as long as they honour the T&Cs of our mortgage, it doesn't bother me.

The thought of being with a mainstream lender is nice, but being able to overpay for at least a few months is a lot nicer!

Sammy_Girl

dimbo61 wrote: »

Does the admin charge apply if you ask to keep the same mortgage payment each month ?

Unfortunately yes!