Remortgaging advice

Engeroosi

As on November 2011 I have an ERC of £2444 on my mortgage with £123,000 outstanding on a fixed rate of 6.29% which expires October 2013. I believe my home is worth around £170,000.

What I am looking to do is see if it would be worth re-mortgaging at this point. The reason I am waiting to this point is that the ERC reduces yearly and drops from 3% to 2% on the 31st Oct 2011.

Ideally I would like an offset mortgage as this would mean that I could tell me wife to save as much as she likes rather than paying towards mortgage. She is worried that the money just disappears as soon as I overpay the mortgage, this way she would be overpaying without realising.:j

Thrugelmir

On your current interest rate. Overpaying is a sound option. As you won't obtain a similar return without taking risk. Also reducing the mortgage balance reduces the ERC.

To benefit from remortgaging now rather than in November. You would need to obtain a mortgage rate over 2% better to compensate for the additional ERC. So perhaps better to remain as you are for the time being. Continue to overpay, thereby improving your LTV. While applying for and securing for a deal that starts on the 1st November.

Engeroosi

So you suggest remortgaging this November then? I am continuing to overpay and the balance I quoted earlier is my projected balance with the maximum overpayment made.
I can overpay 10% per year, so the ERC should in theory be £2220, not a major difference but it all counts!

Thrugelmir

Engeroosi wrote: »

So you suggest remortgaging this November then?

Unless you can obtain a very competitive deal that compensates for the additional £1,200 or so of ERC payable. To be cost effective you would need to recover this in the 5 months before 31st October.

Engeroosi

I wasn't looking to remortgage before November.

How difficult is it to apply for a mortgage myself and would I be better getting a mortgage advisor or financial advisor to assist?

Thrugelmir

Engeroosi wrote: »

How difficult is it to apply for a mortgage myself and would I be better getting a mortgage advisor or financial advisor to assist?

Very much personal choice. Easy enough to arrange a remortgage yourself if your personal circumstances are straight forward.

The FSA sponsored website makes comparing mortgages relatively straightforward and unbiased.

http://tables.moneymadeclear.org.uk/Comparison-tables-home/Mortgages/Compare-mortgages/

Engeroosi

Im not sure if we would be straight forward.

I have a property which I let out for £500 per month, the repayments are £350 per month.
My wife has a joint mortgage on a property with her friend who still lives in the property and her friend pays the mortgage and all the bills.

Will this mean we are not a straightforward application?

Engeroosi

humpty dumpty sat on a wall!!

Engeroosi

Applied for HSBC mortgage!!

Thrugelmir

Engeroosi wrote: »

Applied for HSBC mortgage!!

Hope that your application is successful.

Engeroosi

So do I but it might take a phone call to clarify things with regards to buy to let mortgage etc. The offer is valid for 6 months if accepted so would protect me against any future increases!