Enormous 6% redemption, partner split, remortgage needed, now what?

Happyjaw

My partner and I took out a mortgage in Dec 2007 on joint incomes and then split up a year later. The mortgage is with the subsidiary of Citibank, Future Mortgages.

I've been paying the mortgage alone for 15 months and our current 'offer' of 6.7% :eek: due to his poor credit ends in December. Future tell me that to end the offer now will cost 6% of the mortgage, so £9,300.

My credit is mediocre, mostly because I don't take risks but I have got one default with a bank account in joint names - though I never made a single transaction in that account - ever.

I would save a lot of money if I could get a fairly standard mortgage and I've been advised by one of Future's phone people to write in asking to be released without the huge penalty. He said 30-40% of people succeed with this.

Citibank/Future stopped lending new mortgages a year ago, so I'm guessing they won't be wanting my business anyway come December.

So I want to exit my current 'offer', remortgage alone and ideally with a decent lender but I have concerns about the penalty, the joint bank account, the charges of taking his name off the mortgage and my own ability to get a mortgage. Our property should be in a reasonable position, although evidencing its value is tricky as it's a new house, the only houses selling near us are the same and also brand new but the people who have tried to sell the same new houses have been unsuccessful (why buy one someone else has lived in if you can have the same one brand new and with your choices of kitchen, carpet, wardrobes etc).

Any advice would be simply divine!

beecher2

How much is outstanding on the loan, and what's your salary? You're likely to have lost value since buying - what was it worth in 2007? Did you put down a deposit?

fedrightupgirly

Hi
I think your best bet would be to look at what a new Lender would offer you, many people do pay the penalties (by adding it to their mortgage balance) as the monthly implications far outway paying the penalty. For example, you may increase your loan by 9000 to leave the lender but if a new one offers you a rate under 3% for example (as some are) this could save you around £500 per month in interest ...there are alot of factors to consider though..ie do you have the equity to go to another lender and achieve a lower rate, do you have enough income to cover the lenders affordability calculator etc

Happyjaw

Well, I've £155k outstanding and apparently, according to London and Country, the Alliance and Leicester might consider it depending on credit rating, which is a bit scary. I have two late payment marks against me over 3 years, both due to standing orders at Christmas. I have the huge bad marks against me and my ex partner on the joint account but that alone and as I said, I never used the account at all but I don't know if I can get a mortgage company to understand that?

I'll be paid some outstanding money in a few weeks which I perceive as savings and it will go to knocking the mortgage to around 75% loan to value.

But that all depends on the property value, which is very odd. I checked it out on the internet. A house across the road sold for £200K and is the most recent sale. It has the same amount of bedrooms, bathrooms, garages and size of garden but it is a different style, made by a different company at the same time as mine. Our road has 8 different types of houses in total. The most expensive, which doesn't not differ in size to mine sells at around £220K but is detached. Mine, being of a different style but an end terrace usually differs on the market.

fedrightupgirly

If you can get the loan to under 75% then you stand a far better chance of getting something. A&L have good rates at the minute but high arrangement fees so be careful. Why not get a couple of local estate agents around to value it so you have some figures to work with

Happyjaw

What usual reasons, or successful reasons are there for asking for redemption waives?

I've written including my personal circumstances and quoted information from the Office of Fair Trading and spoken to the Financial Services Ombudsman and it would appear that there are reasons far above and beyond personal circumstance which are valid.
Has anyone had any success with this?

getmore4less

What rate does you mortgage go onto after the end of the fix.


To save £9300 in 10 months the rate would have to be negative.

£155k @ 6.7% is £866pm I/O so £8660 cheaper to just keep paying.

Why remortgage if you don't get he waiver?

beecher2

What's your salary multiple?

Happyjaw

getmoreforless - My concern relates more to what could happen come December, I can't be sure the mortgage rates won't have risen. Rates are safer now than they are likely to be in future according to most sources I'm reading and frankly Future Mortgages are simply dreadful. The customer service lacks and I get harrassed for payment every month even though they tell me I have all month to pay and have a standing order set up for pay day, they ring and write to me from the first few days of the month EVERY month.
I'd rather get away from them now at some small expense. Apparently in December it would move over to their standard variable which is 3.1% or similar right now, but of course cannot be predicted for December.
I don't want a variable rate, I only want a fixed or reasonable capped rate so I can be certain of affording it.

beecher2 if you mean what have I been offered? I don't know, I've made enquiries with a broker so far.

Happyjaw

Oh, and it's currently an interest only mortgage, so I'm gaining nothing by being with them. If I move I'll be getting a repayment.

getmore4less

How long are you looking to fix for?