Switching mortgages, help please!!!!

shopaholicjules

Hi
I have still not got my head round different mortgages and was looking for some advice as so many of you appear to know what you are talking about.
I have a small mortage 24,000 on an endowment, I am keeping the endowment but want to swop my mortgage to a repayment or something.
I want to borrow 24,000
Over 12 1/2 years (term I have left)
Want to pay approx £200 a month, I currently pay less than this.
If I could pay it off in less time that would be nice too.
Please help and advise me of the best mortage for me, I do not understand flexible, tracker, blah and blah, I like figures but this is blagging my head.
Any help would be much appreciated as I do not seem to be getting anywhere.

P.S I'm a very good shopper but doesn't extend to mortgages which are a lot more important than the shopping I do on a daily basis.

Thanks in advance, please help :wall:

homer_j_3

Ok - you really need to speak to a broker re best deals but to give brief explanation of different types of mortgages:

Flexible: This does what it says on the tin. A flexible mortgage means you can overpay and underpay and really may be something that interests you if you are prepared to try and get your mortgage paid off sooner that the natural term. Flexible is not really a stand alone product type but a feature of the following product types.

Tracker: This is a product that will usually track the Bank of England Base Rate for a period of time. The payments can go up and down like a variable but will usually operate at a margin, which is dependent on the individual product, above/below or equal to the BOEBR. This may carry an Early Repayment Charge (ERC)

Variable: This is a no frills standard product which has no benefit other than it never usually carries ERC's. Payments can fluctuate up and down at the lenders discretion.

Fixed: This is a set period where the interest rate remains the same and will give benefit to people who want to know what their payments are each month without any suprises. These products will normally carry an ERC for at least the fixed rate period or longer.

Discount: This product offers a margin off the lenders standard variable rate for a set period of time. The payments will go up and down in line with the variable rate but will always remain with the agreed discount margin. ERC's may be chargeable similar to how fixed rate products are.

Capped rate: This works in a way that a variable mortgage does but with an additional benefit of a fixed rate. If you were to take a 5% capped rate this would mean that you would benefit from any fluctuations of the lenders standard rate whilst below 5% but once it exceeds this amount your product rate will be capped at 5%.

As a rule of thumb you will find that arrangement fees are the norm with the products that have features like fixed, discount and capped rate products.

Anyway, hope this helps you understand the basics of products - This was just a quick jot down and I think I have covered the main features but what is important is that you work out what you want. At this point seek professional advice to ensure these requirements are met.

shopaholicjules

Thanks for the explanations, it makes things a little clearer to me, now it's about finding the right mortgage.
Would you suggest I go to an independant financial advisor or different mortgage lenders. Should I be paying for this service.
Thanks again
I hope they will just tell me simply which is the best mortgage.
Thanks once again
Julia

Ian_W

Jules,
There are some very good articles about remortgaging on the mortgage section of the site, they're easy to understand and with or without a broker it's better you understand the type of mortgage that bests suits you.

You really want an independent broker who can and will access "whole of market", some charge a fee but many work on a fee from the lender, which means you don't pay them directly and the mortgage won't cost you any more than if you went direct. Recommendation is best but you can find a local one via https://www.unbiased.co.uk by entering your postcode and the service you want, ie mortgages.

HTH & BoL.

kenshaz

see Martins article on Mortgages,also Charcol have a web site,or telephone them have a chat ,seem OK

Chobra

I am currently working for an independant mortgage advisers firm and there are approximately 15,000+ deals available through the sourcing software we use.

Some firms do charge some horrendous charges for simple searches and even for non advice.

Is your endowment on target to pay off the mortage amount? and if so what are the projected amounts for in your most recent endowment review?

It could be possible to take out part of the £24k mortgage as a repayment and keep the rest of it interest only in line with your endowment policy as well as lowering the term of your mortgage.

shopaholicjules

Hi Chobra
My endowment is not on target to pay off the mortgage, it's about a £6,000 shortfall at the moment. I put in a claim re misselling but got a reply saying they have rejected it, someone has advised that I send it to the Ombudsman. I was thinking of keeping that as a savings plan as I do not currently have any other savings plan part from a couple of hundred pounds in an ISA.
I am currently with the Hallifax and some people have said they are not very good with existing customers and are better for new ones.
Do you mean that I take out a repayment mortage for the shortfall and keep my existing mortgage for the other 18,00 or so.
I really do not have a clue when it comes to mortages.
Thanks for your advice.

shopaholicjules

I have looked through the list and have not heard of any of the ones listed. I will have to ask around people I know and see if anyone can recommend a good advisor.
Thanks for the link and your advice.
Jules

Chobra

The best thing to do would be to take the mortgage on a split interest/ split repayment with the repayment covering the shortfall in the worst case scenario (ie: Red letter stating £7k shortfall at worst and £3k shortfall at best) in that case take out £17k on an interest only basis and £7k on repayment.

Alternatively you could cash in the endowment right now, pay off part of the mortgage and keep the rest of the mortgage as repayment.

The most common mortgage deals at the moment are 2 and 3 year fixed, tracker and discount mortgages, at the bend of the 2 or 3 year deal you shop around again for the best deal(ie: lowest interst rate and fee's if any)