Can and should I remortgage after 6 months?

valleyslad_2

Hi,

I'm new to this site, so any help would be greatly appreciated.

My Fiance and I bought our first house together about six months ago. We got a good deal because the owner was emigrating and needed a quick sale, and the final agreed price was £156,500. We put down a 10% deposit, and so our mortgage was for £139850. We recently had the house valued by two independent estate agents, who both valued it at somewhere between £165k and £170k. In addition to this, both my Fiance and I have recently secured promotions meaning that we have an extra £6000 gross per annum coming in to the house. Our mortgage is with HSBC and has no tie in fee's as far as I'm aware. So my question is, if we now have extra equity in the house should we remortgage for a better rate? We're also thinking that because we now have extra money coming in that we should try and take the mortgage down to 20 years as opposed to the remaining 24.5 years; this would add approximately £50 to our monthly payments. Basically, it all sounds promising but I don't know if there are any hidden costs associate with any remortgage as I've never done it before, or if there are any risks, such as could I loose my current mortgage?

Any information would be really helpful.

Many thanks.

kingstreet

Going off estate agency valuations isn't a good idea. The lender's surveyor is likely to look at the purchase price and date and value it at little more than what you paid for it.

Given your improved circumstances, I'd suggest making voluntary overpayments to bring the term down without tying yourselves to having to make an increased payment as an obligation.

Have a look again in another twelve months when an increase in prices and a reduction in the mortgage balance will have worked you into a better position.