ReMortage Due and House Not Sold

bbasra

I have my property for sale as i want to buy a bigger one but my property has not sold yet and my mortgage period is now over end of this month.

I am currently with Abbey on a Repayment Variable Tracker Rate of 4.7% i belive. I bought the house for £166,500 and borrowed £139k from Abbey in 01 Apr 2004. My property is now worth £185-£190.

Abbey have said i can have a mortage of upto £240k + I will have my Deposit and Equity released from the sale of my property. Also i have to get a letter from my wifes work to say she is due back to work in August as my wife is currently on Maternity from March till August.

My question is now, what shall i do? From 1st April, the Intrest Rate will go upto 6.5% which means i will have to pay £879 pcm on Repayment or £740 if i switch to Intrest Only. And there is a £70 switching charge. I currently pay £733 pcm.

Should i just remortage with Abbey again for another 2 years now as it will be so much easier to borrow more money from them, or shall i shop somewhere else. If i go somewhere else, i belive that wont give me that much now as my wife is on maternity leave.

What shall i do, i dont want to waste money on switching it to Intrest only for a few months untill my propery sells and i find something else?

TangentMan

I don't know what Abbey offer but if you remortgage now you will have to pay some sort admin fee won't you?

If you then remortgage / port later won't you incur further fees?

If you total up those fees and compare with say six months at £146 (the increase in your monthly payment) while you are waiting on your new property, it might be cheaper to ride it out!

herbiesjp

Do you need the sale proceeds from this property to go towards the new purchase?

bbasra

it would help alot, so yeh.

HelpWhereIcan

I have had clients in a similar position, and in their specific circumstances it worked out well for them to remortgage to the One Account on their Flexible Mortgage Option (as opposed to the full account version).

This was because there are no fees to switch (other than your current lender's 'deeds release fee' which may be a couple of hundred and payable when you switch lender whether on a move or remortgage), and no early repayment charges other than a £75 deeds release fee when you move from the One Account when you buy the new place. This meant that although they were effectively taking out 2 new mortgages potentially within 12 months, it was only costing them £75 more than if they had done nothing and waited until they moved to find a new deal.

The deal is currently discounted to 4.99% for 12 months, reverting to 5.45% for the rest of the mortgage term, so potentially represents a good saving on 6.5% whether you move within 12 months or even 2 years.

However, the reasons that it suited them (and therefore may not suit you) were:

1. They were interested in the flexible features offered
2. They were unsure of when they would be moving (could be quite a while considering property values concerned- not too many in this area!)
3. The size of mortgage meant that the difference in interest rate more than compensated for the potential £75 higher cost than doing nothing.
4. They were intrested in the concept of a current account mortgage, but did not want to commit to the One Account as they did not want to restrict the loan amount available to buy a new place to what the One Account would lend.

For this reason, I would get advice from a whole of market broker who can investigate whether this option (or one like it) is suitable for you once they have all the relevant information they need to make a reccomendaton.

Hope this helps

bbasra

thanks for your replies.

Is the One Account with HSBC?

I think i should shop around and see what the best deal i can get on a mortage (both Fixed and Varible Tracker) and how much fees they will charge now to change over and how much when i want to borrow more money and whether they will give it to me.