Remortgage advice please???

sticher

Hi I am hoping to remortgage asap in order to reduce my monthly repayments. I am currently with Northern Rock, mortgage is for around £41,000 (house value of around 210,000) and has 8 years left to run. My monthly repayment at the moment is £530.

I contacted a no fee whole of market broker (recommended on here) and was told I could have a 2 year fixed term giving me repayments of £520 at an interest rate of just over 4%.

I have searched online and it seems that Alliance and Leicester are offering a 2 year fixed rate of 3.29% which would give me a monthly repayment of £498.

Why did the broker not find the Alliance and Leicester one - would it be something to do with my earnings? or something else? I find it all so confusing but am tempted just to apply for the A+L one anyway but am I missing something?

Thanks for any help.

slummymummyof3

Have you seen the 5 year fixed rate from the Yorkshire BS which is 3.99% - slightly higher rate but much longer security!

getmore4less

£41k 8 years @ 0% the payment would be £427 thats the lowest you could get unless you extend the term.

whats the NR rate? a payment of £530 would be around 5.6%

With a mortgage this size fees are important to the overall cost.

Do you need to fix?

Have a look at FD vaiable rats and consider overpaying see how they compare.


£41k @ 4% should be around £500 not £520.
£41k @ 3.29% should be around £486

Jackinbox99

Hi

With regards to as why your broker didnt find the Allience & leicester one, I asked a mate whose an ex Financial Advisor the same question the other day - because my broker suggested a Leeds Building Society mortgage for me, and yet I found the First Direct one was a better deal.

The answer is because not all banks / mortgage companies deal with brokers and therefore brokers cant (or dont want to) recommend their products. So in my case, Leeds would have given my broker a commision, but even if my broker had suggested the FD mortgage for me, he wouldnt have got any commision at all out of it.

In my limited experience of finding financial products online, ranging from insurance through to ISA`s, savings, mortgages etc... ive never once found the broker to come up with the best deal! Its certainly usefull to get their advice however just to compare it against what you find yourself through online research.

JimmyTheWig

I'd say it's probably because the A&L deal is available direct only and not through a broker, as per previous post.

But it might be due to some terms and conditions (e.g. early repayment charges) that make the A&L deal a bad deal for you.
[Or the broker may have had similar problems to us with Santander mortgages over the past few months and ruled A&L out entirely!]

Can you ask the broker? Would be interesting to hear their take on it...

Senior_Paper_Monitor

The rate with A&L to which the OP refers is available via brokers (Product ref 15248) .....

Product Name: 2 Yr Fix Rate 3.39% 31.08.12 Max 70% LTV

Min Loan: £25000
Max Loan: £999999

Product Details: 3.15% fixed until 31/08/2012 , then BBR plus 3.74% for the remaining term

ERC: Early Repayment Charge: Repay all or part of your mortgage before 31.08.2012 and pay a fee of 3% of the amount repaid

Product Level Fees: 2.00%

Customer Type: Remortgage

LTV Min: 0%

LTV Max: 75%

Headline rate: 3.15%

Incentives: 10% Overpayments / Free Basic Valuation (refunded on completion) / £200 Cashback


The 'Product Fees' on this mortgage are going to be circa £820 - I have no idea who your 'via broker' mortgage is therefore cannot check the 'fee' comparison (but wouldn't expect this to be the justification).

Without details of your income I cannot comment on whether selection related to salary/income amount/type is an issue. Similarly age etc.

Have you tried asking the broker ?

I'll happily accept Jack's comment concerning cheaper direct sell mortgages being available, primarily to simple (i.e clean and uncomplicated) applications, BUT do not view insurance (in particular protection i.e life and critical illness and some more complicated general insurances such as income protection and unemployment) in the same light - these are complicated products, where advice, full understanding on minor policy variations and the use of trusts in their implementation are important. Additionally many of the best are available only through brokers - often a reverse of the situation with mortgages.

sticher

Thank you all very much for your most helpful replies. I will have a look at FD mortgages and the others suggestions. I think my application is a simple one - although my earnings are not that high but should cover the repayments ok. I am 46 so that shouldnt be too much of a problem. Thanks again.

Thrugelmir

Have you considered extending the mortgage term so it ends when you are 60, ie an additional 6 years?

Your mortgage balance is so low that the majority of your repayments are capital. Not interest.

So switching products (lenders) is not really worthwhile after product fees are taken into account.

Which part of NR are you with? Good or bad.....

sticher

Hi Thrugelmir - Thanks, I was intending to extend it if I couldn't get a good enough new one - and even then might have to. I didnt realise it might not be worth switching - bit dim sometimes. What do you mean - which part of NR - good or bad?

Peelerfart

Northern Rock was split after the "trouble" they had,into two sections the bad asset part, and the good assets part.

Oddly the bad asset part posted a profit recently,but the good bit posted a loss.

Thrugelmir

sticher wrote: »

Hi Thrugelmir - Thanks, I was intending to extend it if I couldn't get a good enough new one - and even then might have to. I didnt realise it might not be worth switching - bit dim sometimes. What do you mean - which part of NR - good or bad?

If you are with good bank then you may have more options. Bad bank is running down its lending books so unlikely to help.

Which part you are in is not a reflection on you. Merely if NR securitised your mortgage loan or not.