help with mortgage please

spat08

Hello, i am currently on the svr of abbey after coming off a fixed mortgage in september. We are looking to move house and so i spoke to abbey about what we needed to do if we did move..

They seemed helpfull and said that currently they can offer me 4.59% for 1 year that will cost £699 upfront cos we have more than 85% ltv.

What the man said is if we are in a fixed period, we can transfer the mortgage to a new property, and then remortgage at the end of the deal. He said the deals to remortgage are alot better than to get a new mortgage.

If we were to move, we would nee a new mortgage on new poperty, and the best they can offer us is 5.89% for 2 years.

Now my real question is..should i sign up for the year, pay the £699 but then after we move in a years time,we should get better rates as its a remortgage rather thnan new mortgage?

otherwise, if we move, we will be looking at rates of 5.89% which is obviously alot worse.

do u think the £699 is worth it?

I hope this makes sense? Imnot looking for advice on whether to move or not as we need to. any help on this mortgage would be greatly appreciated..

koexelek

It's a good question, and difficult to answer.

Another way of looking at it, is you fix with Abbey now, they will be your only realistic option when you do move ( as you would have to pay a redemption charge to come out of their deal if you wanted to go elsewhere)

If you go on their svr, you can source the whole market for the best deal available to you.

The big question of course, is whether deals on offer from other lenders then, will be better than what Abbey are offering ( and will let you keep when you move now)

spat08

in terms of deal at the moment, it is by far the best we have been offerred. our other best was 6.19% from c&g..although this was over a month ago.

the problem we have is mortgage companies are valuing the house at alot less than its worth, as lotsof people are seeing. i understand why though. since there is not many 90% deals, it hs been tough..

i dont like the idea of paying £699, but also, would hate to move onto someting of >5.5% and lose alot per month. When we move, we would be looking at having a ltv at purchase of 84%, so would still not be open to loads of offers elsewhere..

i just dunno though, find it all vry confusing

getmore4less

Do you have to move?

If you used the costs of moving to bring down the mortgage what would the LTV be then?

spat08

yes we have to move..

i did say that in the op

getmore4less

Sorry missed the last line about having to move.

If the current loan is portable I would check the T&C to see if the portability ends with the fixed term, all my previous loans have been portable for the full term yours might be also.


With prices falling the problem I see is that you may have you valuation expectations set too high so in 1 years time when you say you will move you could well be in negative equity, so they may not port any loan even if the place is a lot cheaper than the current, one because you would still 100%+ LTV(unless you have savings).

If you have to move this could cause you real problems.

Also you don't have to remortgage now you can wait till just before you move or if a good deal comes up with lower fees(the falling prices will still get you)

spat08

w eare hopin to move asap, hopefully well within a year..

we have a lot of interest on our house nd had an offer already, just it was too low. I was under the impression from the guy at abbey, that since were now out of our fixed period, it was not portable. so if we moved, would haveto get a new product.

this would put us in same category as first time buyers etc. his argument was if we take this 1 year, we can then transfer to it new house, then in years time remortgage and take advantage or existing customer offers..

the rate is good, im very happy wih that, its just the £700. am i right in thinking if we move, the process of changing mortgaages should be alot easier if we are "transferring a current " one cmpared to if we were trying to get a new one. we just want to try and make the whol process as smooth and quick as possible, to try and make sure the sale goes through.

spat08

also the interest we have had in property, and previous offer, gives us an idea of what we can hope to get. we wouldnt have any trouble with negative equity as we paid a large deposit in first place. that "hopefully" should not be a problem..

its more if the rate is good? is the fee too much? will transferring a mortgage make moving house quicker/easier/harder/slower than if we were trying to find a new deal for the new house

getmore4less

I would check your current deal T&C's for portability,

The abbey guy was probably keen for you to take on a new product and may have implied that the current mortgage is no longer portable.

Also taking the abbey 1y product means you are tied in.

spat08

ok, il check the t&c's..

if it is still portable, since rates are low at the moment due to me being on svr, they would have to increase a fair bit for me to lose the £699 fee that i would pay if i fixed for the year.

If my current svr deal is portable, should that be easier/more straightforward when moving house than if i was trying to find a new deal?

as i mentioned, we just want it all to go as quickly as possible so to reduce the things that could go wrong. I dont want a new mortgage application taking longer than a transfer and slowing the process down.

thanks very much for all your help. really appreciate it