Help/Advice needed please!

jo_london_mum

Hi
Need some advice on trying to ease the pinch of the recession!
We have a £95K mortgage, which ends in 2024. Our property was valued at £375K 2 years ago.
We have a fixed rate of 5.99% on 2 of the of 3 accounts (where we have topped up mortgage), the other account cannot be fixed as it was too low to qualify for fixed rate.
So our total Mortgage monthly payment is £825 - if we go back to the base rate at our current lenders, Alliance and Leicester the monthly payment only goes down to £750, as their variable is 4.99%
On going through their current fixed rate deals on the phone yesterday, none of them sound too appealing, and wont really save us any money at all.
What we really wanted to do , was either try to knock the monthly payment down by £200 or so a month or take another £20k out on top of mortgage and still be paying around £820 - 850pm
Our joint income is £67K
My questions are:
1) Can anyone recommend another lender thats currently in a good stable condition (I read on here to avoid Chelsea?)
2) How easy is it to change over lenders? Ive always dreaded the thought, but I just dont feel A & L have offered anything good for a long time now
3) How easy is it to get a new Mortgage agreed? - our experian credit score is only 666 - which is mainly down to the amount of cards and HP stuff, though they are always paid on time?
4) have looked at a few re-mortgage caluculators, but they all seem to only give you calculations based on 5 years, if I move lenders, I would want to stay put for the life of the mortgage ideally, so I can never get a clear idea?
Thanks in advance for your answers!
Jo x

Rafter

1) I wouldn't care too much about who you borrow from - surely stability is more important if you are saving? However, the stability of the bank or building society might dictate how competitive their current and future pricing might be.

2) Very easy - particularly with the amount of equity you have - some organisations will do a free transfer service for you as well given it is a remortgage - you will have to pay A&L an exit fee probably.

3) Credit score might be an issue, but the amount of equity you have helps. As long as you have no defaults or county court judgements and can demonstrate that you can afford payments, you should be ok. Many would not recommend increasing your mortgage to clear other debts, but this could reduce your interest bill. You just need to decide if you are strong willed enough to continue to pay about the same (to repay credit card debts over less than 25 years) and whether you are strong enough not to run up credit card debts again.

4) The APR will give you the lifetime cost of a mortgage over 25 years to compare. You really want to find a lender who will offer good transfer deals at the end of any fixed period. Generally building societies will be better at this, although their 'Standard Variable Rates' can be higher than the big banks.

I would suggest in your situation not trying to do this on your own. Ask your friends and family if they know a good mortgage broker/ financial advisor who can help you find a good deal.

Good luck

R.

socrates

The pay off an extra £200 a month directly contradicts the take an extra £20k and keep the payments the same as present.

Why do you need the £20k?

Do not move lender, stay where you are and overpay, it is likely that with your equity and a good credit history - when and if lender criteria eases and competition returns to the market you will be ideally placed.

Personally I do not like committing myself mortgage wise to anything beyond 2-3 years (if at all)

jo_london_mum

Rafter, thanks so much for your reply, so helpful, just a few more question if you don't mind...
3) Credit score might be an issue, but the amount of equity you have helps. As long as you have no defaults or county court judgements and can demonstrate that you can afford payments, you should be ok. Many would not recommend increasing your mortgage to clear other debts, but this could reduce your interest bill. You just need to decide if you are strong willed enough to continue to pay about the same (to repay credit card debts over less than 25 years) and whether you are strong enough not to run up credit card debts again.
No - we have no CCJ or defaults. The 20k I wanted to get WAS to pay off debts, which I would HAVE to be disciplined again not to run up - and feel we would be fine, been through the big expensive time of having babies, taking time off work for it etc, both kids at school, both back at work, getting back on our financial feet again! - we would also want whatever deal we got next to also run until 2024 - not the 25years again.

4) The APR will give you the lifetime cost of a mortgage over 25 years to compare. You really want to find a lender who will offer good transfer deals at the end of any fixed period. Generally building societies will be better at this, although their 'Standard Variable Rates' can be higher than the big banks.
What are transfer deals?

I would suggest in your situation not trying to do this on your own. Ask your friends and family if they know a good mortgage broker/ financial advisor who can help you find a good deal.
I read that some IFAs are paid by you and others get their money through comission on whatever deal you go for, any advice there?

Oh, and what kind of charges do BS usually make to transfer to another lender?
Thanks so much forr your advice
Jo x