Off to see a mort broker tomorrow morning, any tips on what I should ask???

Greenst

Hi all,
My fixed rate is up for renewal in March, I have had a reminder from my current mortgage company, Nat West. I can either stick with them and go onto their variable rate or opt for another fixed rate.

My intention is to pay off my mortgage as soon as I can, I am on a fairly low wage so I am not able to pay off loads, but I have been making overpayments for the last year which seems to have made a difference, I need to get an up to date statement from Nat West though.

From reading posts on here and the great advice given to others I think my best solution will be to carry on with a repayment mortgage, I don't want interest only, and get as low an interest rate as possible then if that reduces my monthly payments continue on with my current monthly payment amount.

My interest rate at the moment on the 2 year fixed rate is 4%. I took out the 2 year fixed as at the time my work was a bit erratic and I wanted the security of the monthly payments not suddenly going up. Obviously like others I didn't know that interest rates would stay so low so annoyingly in hindsight I know I have paid over the odds for that security.

My work is now more stable and as I have been able to pay over payments I think I am in a position to risk taking a variable rate mortgage now. My other option was to reduce the term more and have a bigger monthly payment but from what I have tried to learn on here is that it would be better to go for the low rate and pay more then if things change in my circumstances then I just stop the overpayments.

I take it that there is no difference in for example continuing the mortgage over 13 years as it will be by March and making overpayments e.g. £600pm at a rate of 1.5% or reducing the term to 10 years and paying £600pm without overpayments.
I hope that makes sense!!

So my question to the broker tomorrow is as above, my dream is to pay off my mortgage as soon as I can, but within my income range it won't be as fast as I'd like. Is there anything else I should be asking when I pick their brain tomorrow?
Any help most appreciated!

Greenst

Anyone out there? Appointment is this morning now!
Suppose all I want to know is should I ask them to find the lowest interest rate possible or is is not as simple as that?
Want to pay off mortgage as soon as I can ideally!

smitchy73

Dont know if this will be too late for your appointment or not, and i'm no expert. I would think low product fee for any fixed rate or no product fee, which you may get more with your own lender. Overall cost over the remaining 13 years is probably the best comparison for the suggestion you made, ie £600 in overpayments when you can or indeed the fixed payment of £600 pm. I've been told by a few folk that no-one see's the rates shifting much if at all over the next year to 18 months, but then again nobody really knows for sure.

Its one of these things only you can know the full answer to, I suppose in all honesty there may be a compromise in that you could see the figures for reducing the years left to a certain figure where you are comfortable with should things go eratic at work again, and still make an smaller overpayment, you'll still be paying it off quicker, but at the same time if affordable you can make a further overpayment and reduce it even more.

Hope this makes some sense and is of some help to you.

kingstreet

You need to consider whether you want another fix. This will impact on what overpayments you can make. Some lenders limit overpayments to 10% a year and only allow lump sums. Nationwide allows upto £500 per month.

I would counsel against you reducing the term. Overpay voluntarily, don't tie yourself to higher contractual monthly payments just in case...

Is the broker independent or whole market? How much research have you done on direct-to-lender products a WL broker might not tell you about?

Fees and costs for moving? If you have a small mortgage, a higher rate with no transfer costs is probably going to be more cost effective for you. Lower rate/high fee products tend to suit the bigger mortgage.

If you have savings, would it be worth considering an offset option where the interest on your savings is waived in return for a reduction in the interest on the mortgage?

Greenst

Thanks Kingstreet and Smitchy!!

Was a bit late to take the questions in but I have come away with the advisor suggesting a 5 year fix, the interest rate is a little lower than I am currently paying, 4% but she said that at least for the next 5 years I won't have any surprises if the interest rates start to rise. Rate is 3.84%, The 2 year tracker is 2.78 above BBR rate (bank rate?) so 3.28%

I can still make overpayments on this mortgage, and the monthly payments are pretty much what I am already paying. I can't afford huge overpayments but I feel more comfortable being in control of the overpayments rather than reducing the term and with these overpayments it could potentially reduce the term from 13 to 9 years anyway.

I think my job is pretty secure but only as secure as the next person and in this economic climate who knows! I am one of life's worriers as it is!!!

I need to read through all the information I have been given, what was interesting was she said that rates won't go any lower as they are at historic low now but really can only go up so the 5 year fix will insure me against any surprises.
There's no fees to pay on the 5 year which for me is a bonus!

kingstreet

Have a look at Yorkshire Building Society. They tend to be kings of the five year fix. As they don't pay commission to introducers they will often be overlooked by a broker which is the reason for my earlier comment;-

How much research have you done on direct-to-lender products a WM broker might not tell you about?

http://www.ybs.co.uk/mortgages/current_products/index.html?customerType=newR&mortgageType=fixed&depositMin=25&x=19&y=9#newR