First time remortgage

kforshaw

Hi, I'll try to be as helpful as possible in relation to figures.
We are coming up to the end of our 3 year discount tracker mortgage with A & L in September.

We took out 95% mortgage on a replayment basis for £45k ish for 20 years and now owe about £40k ish, the house is now worth £85-£90k.

We pay £316pcm (at 5.59% having checked our paperwork) and are quite happy with that although could probably pay up to about £360.

We'd love to reduce our term slightly perhaps from the 17 years remaining to 15 years - money permitting.

Any ideas of what kind of offers are about or advice on kind of mortgages we'd need to reduce our term?
Also, I heard rumours a while ago that A&L are expensive to get out of, is this true?
We are quite open to a long term tie in at a good rate also.

(Joint earnings before tax is £30k pa)

Thanks in advance

Karen

MortgageMamma

Hi Karen, don't mean to ask somethign so personal so soon, but, whats your credit rating like? as this has a big bearing on the kind of mortgage that will be recommended

kforshaw

ASAIK pretty good. Partner has got good credit and so have I.
I'm not too sure how it works, but I have credit cards and a personal loan which have never defaulted and currently only have about £400 on ccs.
Catalogues and HP agreements have never defaukted or been rejected.

Thanks

MortgageMamma

Ive looked at reducing your term to 15 years

2 year tracker - nationwide £341.26 per month
3 year tracker - nottingham building society £347.01 per month
5 year tracker - melton mowbray building society £352.12 per month

these are not recommendations, just plucked the best prices off my sourcing system for you, and I have no way of knowing if you fit these particular lenders criteria or not.

MM

AndrewSmith

You are quite correct that the exit feesfrom Alliance & Leicester are quite high currently £295.

Bearing in mind the relatively low mortgage amount of £40,000 your first call should be to the Alliance & Leicester themselves to see what they will offer you, thus potentially saving exit fees (possibly) legal costs and time, and going through a new application process.

For example they currently have a 5 year discounted mortgage with a current pay rate of 4.79%, set up fee £99, no tie in or redemption at all. They do quote a valuation fee of £250 for your property value however as an existing customer this might be waived.

This mortgage over 15 years @ £40,000 on a rate of 1.8% discounted from their SVR = 4.79% = monthly payments of £311.96

As the mortgage also allows overpayments you could make this up to the £360 pm that you say you are happy to pay and potentially pay off the mortgage almost 2 years earlier still (depending on what rate you take at the end of the 5 years).

The main beauty of this product is that without any redemption penalties at all there would be nothing stopping you moving onto a better rate with them at a later stage should they release one later down the line. SImilarly you could also move to another lender at any time should swap rates come down or lenders launch time-limited special deals that are attractive and financially viable.

I nor anyone else can guarantee that they will let you switch to this product however for the cost of a phone call I think it may be worth you checking. All I will say is that a client of mine who is an existing A&L borrower has just swapped to this product. You May also be allowed to reserve the product till you are ready to change in September by paying the £99 fee upfront, to guard against the product being withdrawn between now and then.

Just a though

Andy

kforshaw

Ooh...thanks a lot for your input the pair of you, I'll certainly look at those suggestions and discuss it with my partner.

The two years earlier is very appealing I have to say!

Thanks

Karen