Need out of current mortgage deal

Gerrym1984

Coming up to end of second year of 5 year fixed term at 6.64%. Currently own around 116,000 and the exit fee is approx £3000.

I have went to a financial advisor and the only deals atm are either variable or tracker which will inevitabally rise anyway, some of the new deals also include upfront fees which we will lose if our house is not valued at £140,000 (around 2 years ago it was at £155,00 then further reduced to £140,000). I also think the finaincial advisor forgot about the exit fees when searching for the mortgage deals

Any ideas on what to do?

hcb42

You've been to an advisor, what did he say?

_Andy_

Why do you 'need' out?

somethingcorporate

Why do you need out of the current deal?

Edit: crossed posts with Andy.

kingstreet

At £120k on £140k, you're over 85% LTV and the products will not be particularly attractive. Do your comments mean you want another fix?

For example, Yorkshire Building Society has the best two year fix at 5.39% until 30/6/2013 but there are fees totalling £999. Nottingham BS has a slightly higher rated fix until 01/04/2014 at 5.49% with only £225 fees. I'm not sure if the legal costs are covered with the NBS deal.

I'm just not sure if it's worth taking on £3k in penalties and maybe another £1k in fees for less than 1.5% reduction. I can't see it saving you more than £90 a month on a 25 year mortgage and you'll owe £4k more as you go beyond the initial offer.

mij544

Gerrym1984 wrote: »

Coming up to end of second year of 5 year fixed term at 6.64%. Currently own around 116,000 and the exit fee is approx £3000.

I have went to a financial advisor and the only deals atm are either variable or tracker which will inevitabally rise anyway, some of the new deals also include upfront fees which we will lose if our house is not valued at £140,000 (around 2 years ago it was at £155,00 then further reduced to £140,000). I also think the finaincial advisor forgot about the exit fees when searching for the mortgage deals

Any ideas on what to do?

Can I just check if this is a typo, is it Currently own around £116,000, or Currently owe around £116,000.

Just thought I would check before I answer, as would make a heck of a difference!

Assume though you are looking to borrow £119k on £140k, which is around 85% LTV?

Is this right?

Lastly, who are you with at the moment, as I assume you want out of the deal as you feel you can get a much lower rate which would make the exit fees viable?

_Andy_

If 2 years ago was £140k I can't see a mortgage val being near that

mij544

OK, assuming interest only for ease of calcs, I assume you are paying interest on around £641 a month on this rate.

An exit fee of around £3,000 would be £83.33 monthly if spread over the remaining 3 years of the fixed rate.

Looking on Trigold, if you can keep to max 85% LTV, the best 3 year fixed I can see is an 4.99% Woolwich product with a £499 fee.

The interest paid monthly on this would equate to around £495 a month.

Providing the other cost like conveyancing and valuation etc come in cheaply I can see the logic behind taking the hit and wanting to switch.

kingstreet

Currently own around 116,000 and the exit fee is approx £3000

I would have a small wager on those being more than £116k and more than £3k and the valuation being less than £140k.

mij - I reckon using sub-85% products could be dangerous.;)

First thing I do before I start any remortgage sourcing is get a copy of the last mortgage statement or a formal redemption figure.

Or assume the worst.

mij544

kingstreet wrote: »

I would have a small wager on those being more than £116k and more than £3k and the valuation being less than £140k.

mij - I reckon using sub-85% products could be dangerous.;)

First thing I do before I start any remortgage sourcing is get a copy of the last mortgage statement or a formal redemption figure.

Or assume the worst.

I quite agree, the figures you get first of all are always just a little out, earnings are always less, loans are more, valuations optimistic, outstanding balances greater!!

Like you, long experience has taught me to have copies of documents too, otherwise the whole deal is a house of cards.

Also, when ever anyone tells me they are 99% sure (or even 99.9% sure), its is amazing how often the 1% (or 0.1%) turns out to be right........

Gerrym1984

Yes you are spot on, although i fear the house may only be worth £130,000 now. I reside in Northern Ireland (may make a difference) and am currently with the Halifax. I will need to speak to the advisor again as I feel he has not taken into account the exit fees and therefore the products he put forward may not be viable.