Advice on Mortgage I have been offered.

billa_champion

Hi guys

I was wondering if someone could give me some advice. Here’s the situation:

Outstanding mortgage: £193,000
Fixed rate with Alliance and Leicester: 5.87%
Fixed Period ending: 30.09.2009
Monthly payments: £944

Have been on the phone to London and Country and have been advised that the best deal out there is:

Mortgage: £187,000
Fixed rate with Abbey: 5.99%
Fixed Period ending: October 2012
Monthly payments: £938

I have spoken to Alliance and Leicester and they said that standard rate at the moment is 4.99% but they can’t guarantee that in September. They also said that they cannot offer me any other product.

What do you guys think?

absolutebounder

billa_champion wrote: »

Hi guys

I was wondering if someone could give me some advice. Here’s the situation:

Outstanding mortgage: £193,000
Fixed rate with Alliance and Leicester: 5.87%
Fixed Period ending: 30.09.2009
Monthly payments: £944

Have been on the phone to London and Country and have been advised that the best deal out there is:

Mortgage: £187,000
Fixed rate with Abbey: 5.99%
Fixed Period ending: October 2012
Monthly payments: £938

I have spoken to Alliance and Leicester and they said that standard rate at the moment is 4.99% but they can’t guarantee that in September. They also said that they cannot offer me any other product.

What do you guys think?

What about fees when you remortgage.

beecher

What's your Loan to Value? I take it that it is high if A&L won't offer you any product other than the SVR, but then why would Abbey offer you a deal?

Also, you are interest only - what repayment vehicle do you have in place?

billa_champion

The LTV is about 80%.

I was told by London and Country that there are no fees apart from the legal one which is £299 but Abbey will pay £250 of that. The value they qouted was for interest only. I now do want to switch to a repayment mortgage which I was told would be ~£1100.

beecher

If your LTV is 80% why won't A&L offer you a new deal? Are you 100% confident you're using an uptodate valuation which takes into account house price decline?

billa_champion

beecher wrote: »

If your LTV is 80% why won't A&L offer you a new deal? Are you 100% confident you're using an uptodate valuation which takes into account house price decline?

Hi Beecher

A&L didn't give a reason - they just said that looking at my circumstances (i.e. LTV, loan amount etc) at the moment they had nothing to offer. When I bought the place, it was valued at about £250,00. When I was asked the vlaue of my flat today, I said that a flat in the same block had sold 6-9 months previous for betwen £225-£230,000.
BTW there a fee of £995!

beecher

I don't see how your LTV can be as low as 80% as your flat would have to be worth more than others were selling last year. I'd guess it is closer to 90% which may cause a problem when Abbey come to value as they require your LTV to be 85% (ie they would have to value your property at £220,000.) Phone up your present lender and ask them what they think your LTV is as a starting point.

jill2002

Don't use the £250 legal cashback - Abbey also offer free legals - it's an option for any remortgage (unless it's BTL). L&C might not want you to use the free legals as they may get commission from the solicitors that they make you use.

vandanfc

Don't forget that A& L will also charge you £295 to close your mortgage with them.

Mrs_Bumble

I think that if A&L are not prepared to offer you a new product that I would want to know exactly why as Abbey and A&L are effectively the same company now.

Have you checked on https://www.zoopla.co.uk to see what the property value is?

jill2002

Abbey & A&L are not the same company yet. They still have some different deals and different computer systems. That won't happen for another couple of months. A&L SVR at 4.99% is different to Abbey at 4.24%.