re mortgage advise needed please

des123

Me and my partners current fixed rate mortgage deal with halifax came to an end in september 09. we were on a fixed for two years at 5.44 %. at current as our contract expired we have fallen to the std variable of 3.5%we been with the same broker for 5 years but we not sure if his advise is correct .

Our house is worth about 135000 and halifax is valuing this less at 120000. We borrowed 117000 and over 5 years got a balance mortgage of 114000. We are thinking of selling and moving perhaps next year if things start moving. As a family we have expanded and need more space. we our hoping the house sells for 135000 which will have some equity as we bought the house then for 120000. so when we are remortgaging we are thinking of increasing our borrowing to 160000. we have also got a small remortgage deposit of £8000.

Our fixed mortgage came to an end 31st september 09 . now the broker is saying halifax have bought out new deals today and that we should start over with them at the new variable rate as we would be saving money with their new rates. This is i think is a new mortagage deal which we will be tied down to and wont be able to move .

My cunfusion lies whether we should

1. move away from halifax and compare others lenders - which the broker advised not to do as halifax got the best deal as from today with their variable rates .

2. should we do nothing and just carry on what we are paying with halifax. no changes and let the existing mortgage rollover and watch market and then start having a new look when we decide to sell.

3.listen to broker and see what halifax new STD variable rate has to offer and change to get their lower rate ..

4. or fix mortage with still halifax for another three years at a higher rate which if we decide to move might have a penalty.

please bare in mind that we want to at some point move and sell but also want to paying off our mortgage . we dont want to look back after 10 years and only have paid very minnimal.

If anyone can advise we would be truelly greatful and really apprciated please.

_Andy_

OK when you say "the house is worth" £135k - on what are you basing this?

des123

hi
we got it valued by 5 estate agents and 4 out 5 said the same . halifax obviously under values this according to their rates
jason

Let_Us_See

What did the other one say?

Unless you are in a very buoyant area I recommend you knock 15% off the value compared to 2-years ago. In other areas the fall in property prices is even higher.

_Andy_

The estate agents price should be taken with a pinch of salt.
You need to be looking at the prices houses like yours have actually sold for.
I'm not quite sure your sums stack up at the moment to achieve what you want.

Thrugelmir

If you are thinking of moving then next year then there is little point in tying yourselves into a new fixed deal or moving to a new lender. You are better staying on the standard variable. As any new product will incur fees which you might as well use to reduce your existing mortgage debt.

Personally I would suggest increasing you mortgage repayments to the level they were at under the fixed rate mortgage. Then you'll be overpaying (and therefore reducing) the mortgage by around £180 per month without noticing.

opinions4u

You will only know the true value of the property when you come to sell. It is, however, unlikely that you will get a favourable valuation that will allow you to move your mortgage to another lender.

I'd say taking the 5th estate agent's valuation and knocking 10% off that figure will give you the best guide though.

As for what to do: you really want a deal with no ERC to give you maximum choice in the future.

So I'd say take their SVR and overpay to bring the debt down and build in some more equity - more choice for you when you make the decision to move. It gives you flexibility, but won't earn anybody else a commission.

Gorgeous_George

Stay on the SVR until you move - there is no value in re-mortgaging, except for your adviser of course. (Disclaimer - unless you NEED security of a fixed rate or can find a deal cheaper than the SVR which is highly unlikley.)

Save you £8K deposit and add as much as possible to it, only if you can achieve a rate of return higher than your mortgage rate. Remember, you may need to withdraw it to fund your house move so don't tie it up if penalties are incurred for early withdrawal. £8K should cover stamp duty, EA fees, solicitor fees and removal expenses so it is unlikley that it will be available as a deposit.

Good luck.

GG