Re-mortgage advice

Morgage_Confused

Sorry if this kind of question pops up a lot. I have read through all the threads till my head hurts. Our financial situation is as follows.

House price £290,000
Mortgage £190,000
Savings £30,000
Joint income of £50,000 and £20,000
Probable on going monthly savings £600-£800 (Could be more)

Our 5 year fixed rate (5.09%) Northern Rock mortgage fixed term is coming to an end next month. I have always used a mortgage adviser but now want to go it alone. However, I am completely unsure which mortgage to opt for. Am considering dumping all our savings at the house but am uncomfortable doing that unless its advised to do so. Also as one of us has hit a higher tax band is there some benefit regarding the offset mortgage or have I completely lost the plot now. And on the same issue is there any other thing to avoid the higher tax banding ( ISA's, pension e.t.c.)

For example I am torn between these three options..

YBS have an offset with fixed rate for 2 years at 2.99%

Wolwich fixed rate
Great Escape 2 Year Fixed 3.28% until 28/02/2013 2.68% (BBBR + 2.18%) variable for the remaining term

Woolwich tracker
Great Escape Lifetime Tracker (Re-mortgage only) 2.68% (BBBR +2.18%)variable for the remaining term

thanks financial guru's

Mrs_Boo_Boo

I have used London and County based in Bath and found their service excellent. There is no hard sell either and in fact I remortgaged through my existing lender last time which they advised after giving me the other options.

Thrugelmir

If in your situation. I would consider something along the lines of:-

Contributing to pension plan to reduce high rate tax liability.

Using a lump sum to reduce mortgage balance prior to remortgaging. While still maintaining sufficent in emergency fund.

Opt for a tracker mortgage which allow overpayments. While rates are low overpay by a minimum of £100 per month. Thereby reducing mortgage term.

getmore4less

Don't forget the fees.

look at First direct offset products

Morgage_Confused

ok thanks for your advice. I have decided to go for a tracker from Woolwich via moneybackmortgages who give half of the broker fees back to me. The mortgage has no fees and £300 cashback.

This is the mortgage.....
The Great Escape Switch & Save Lifetime Tracker
plus 2.18% for Life, A variable rate which is 2.18% above the Barclays Bank Base Rate, currently 0.50%, to give a current rate
payable of 2.68%.

Before I commit can anyone basically put my mind at rest that this method (via moneybackmortgages) and mortgage 2.68% tracker is a decent direction to take.

Also I want to pay a lump sum to reduce mortgage balance. At what point should I pay this lump sum. Should I pay it now to Northern Rock or wait (next month) till I remortgage and pay it to Barclays/Woolwich or doesnt it matter.

Thanks again.....this is my first re-mortgage so its a tad daunting first time.

blueberrypie

Morgage_Confused wrote: »

Also I want to pay a lump sum to reduce mortgage balance. At what point should I pay this lump sum. Should I pay it now to Northern Rock or wait (next month) till I remortgage and pay it to Barclays/Woolwich or doesnt it matter.

When you say "house price", what do you mean? What matters for the purpose of remortgaging is the current value - and that will be determined by the lender's valuation, not what you think or what the estate agents say.

Anyway, assuming the current value is £290k, your £190k mortgage gives you a LTV of *just* over 65%. Throwing your £30k savings at the mortgage makes your LTV 55% - which potentially opens up some better rates. In that case, put your £30k in either before remortgaging, or at the point of remortgaging (it will still be paid to the old lender, so you'll be borrowing less from the new one) to get into that lower LTV bracket.

Also bear in mind that there can be limits on overpayments, so it might not be possible to simply overpay that much right after taking out the new mortgage - better to reduce how much you're borrowing to start with.

Morgage_Confused

yes i am worried about my LTV so just wanted to be sure its a good idea to pay in now before aplying for the re-mortgage.

someone could value the property at say £260,000 and my LTV would be screwed. best to be sure i guess.....or maybe wait for valuation?

Morgage_Confused

Hi there....my remortgage application is all going well...or at least it was.
Going via "moneybackmortgage.com" I had an agreement in principal, and the next day a message saying, "Congratulations your mortgage has just been offered."
So I thought that was that untill I asked what happens next, only to be told, "Good afternoon, it will now been down to your solicitor to get you completed and put an end to the Northern Rock Mortgage."

Well at this point I am stumped, a solicitor? I had no idea a solicitor was needed for a remortgage. The mortgage product I have chosen says "Free Legals" on remortgages. So is this not the same thing? Isnt the free legals basically the mortgage lender doing the legal/solicitor work.
Just when I thought I was getting the hang of this remortgage malarky.

thanks for any advice(or directions to a decent solicitor)

Thrugelmir

You should be offered a choice of solicitors from an approved panel to effect the remortgage.

Morgage_Confused

So I actually dont need my own solicitor as one will be provided( i note here that the panel will be acting on the behalf of Woolwich and not myself?)

Thanks m8....I shall await Woolwich contacting me with their list of approved legal gurus.

anandp

Morgage_Confused wrote: »

So I actually dont need my own solicitor as one will be provided( i note here that the panel will be acting on the behalf of Woolwich and not myself?)

Thanks m8....I shall await Woolwich contacting me with their list of approved legal gurus.

Typically, they should nominate a solicitor from their panel but if you're not fully convinced, I'd put in a call to Woolwich first thing in the morning just to confirm and put your mind at ease.