First Re-Mortgage - advice

Jacka87

I have a flat which was bought with a loan of money from my Parents. The flat is in my name but I have a legal document that states that I have a debt to my parents. They have asked me to repay the money of which I am more than happy to do, so I am now planning on remortgaging the flat (currentky owned outright in my name) to repay the debt.

I am also currently employed on a graduate scheme and going through the proper job selection process at the moment. As a result my proper job in a years time will have an increased salary but it is unknown by how much this will be increased.

My current thoughts are that I would still be in the property for at least 5 years and as a result was considering a 5yr fix based on my current salary and use any increase to overpay. However with the current interest rate situation I was unsure as to whether a tracker or something would be better?

Looking for opinions as well as any suggestions as to where to find the best rate?

My ltv would be 75% and my salary multiple around 4 if that helps.

Thanks in advance

dimbo61

I have a 5 year fixed offset with Yorkshire Building society and have been very happy with my choice.
They do a 5 year offset fixed at 4.89% LTV 75% FEE £495
They also do a 5 year fix at 4.70% LTV 75% FEE £495 ( not offset ).
Now mum and dad could put some of there money into an offset account saving you interest on your mortgage payment !!!
Read up YBS friends and family offset accounts.
You would have long term security for 5 years and ability to build up savings in offset account

maddison-white

without some figures for how much you need to borrow and value of flat makes it a little difficult to give feedback but there are some good rates, I would suggest fixed if you want security of knowing what your payments will be but you could look at a capped rate if you ar unsure of a tracker.

I am a mortgage broker and am giving an opinion not advice

Jacka87

Thanks for both of ur responses.

dimbo 61 - my parents have a weird mortgage at the moment where they can use the equity whenever they want by writing cheques against a set amount, its not an offset but something kinda similar, they would be looking to put the money back into their house as equity short term instead of offset in mine, though my dad is self employed and uses the house equity sometimes when he needs to raise money for his business at short notice and right now he doesnt have that ability due to my debt to him. So thats not really gona suit me tho the offset or fix with ybs may still be an option.

With regards to numbers the flat wa sbought for 135k around 21Months ago. Using online price valuation sites it dropped down to 120 but is now aparenty valued at 137 and I have tracked its ups and downs regularly using the site. I would be aiming to clear a debt of 100k so 74.5% or something like that. Whilst my earnings are around 25k but should increase in a years time as I am on a graduate scheme and the previous grads all got an increase based on the jobs that they where moved to and same would apply. I would base my salary on what it currntly is tho as thats obviouslly all that is known. The reason why I mentioned this tho is I get the impression that ybs along with a number of other building societies will only offer me around 75k based on my salary whilst banks such as rbs will offer me more (this is based on online suitability calculators on their websites).

dimbo61

Dont know your monthly outgoings IE loans,credit cards,HP, GYM membership but if you have low outgoings they might lend you £100,000 on your income.
Like you said your income will go up over next 5 years and if you take 5 year fix your mortgage will stay the same.
Plus you can build up your savings into the offset account and unlimited overpayments with YBS. ( dont forget Friends and family)

Jacka87

RBS and BOS have said they will lend me 112k, both of them where checked via website but then clarified with meeting their mortgage advisors. I will check ybs but most of the building societyies seem to cut at around 3 or 3.5 times income that I have tried so far.

Again thanks for the points. When you say dont forget Friends and family are you talking about borrowing from them or a mortgage product? I am only looking to remortgage to pay off the debt I owe my parents and would only borrow money from them. None of my other family members are in a good enough financial position to lend me the money or I would not feel comfortable borrowing from them.

HarveyGal

Jacka87, I think the comment about Friends and family refers to Yorkshire BS having a system where you can link accounts of family and friends to offset your mortgage..meaning they keep their money but you benefit from reduced interest.
(I don't have any accounts with YBS but I understand from reading various posts that this is permissible).

getmore4less

Jacka87 wrote: »

dimbo 61 - my parents have a weird mortgage at the moment where they can use the equity whenever they want by writing cheques against a set amount, its not an offset but something kinda similar

Barclays mortgage reserve works like this.


Another option to make sure you get a better rate is to look at better LTV options

something like the FD 65% ltv offset(a good rate so offset a bonus)trackers

2.89%
2.59% (£499 fee it has changed from last week)


You pay your parents back most of their debt enough for the business.

Then overpay to create the rest of equity for the debt as soon as you can.

You can then move money between you depending on who has the better rate going forward.