Re- mortgaging with shared equity

Spottypig

Hoping for some advice before I go for advice if that makes sense!

I bought a shared equity flat in 2010 and my fixed rate mortgage expires in June this year. I am trying to work out if I would be better off:-
1. Trying to remortgage the current mortgage amount, as no interest is due on the loan for another three years, to have security of fixed rate? Does anyone know any lenders that do remortgages on se or do they just offer them on the first purchase?
2. Trying to get a mortgage for the whole amount, so current mortgage plus loan, to get access to lower rates as the element of se will be gone?
3. Doing nothing and reverting to the svr of 4.2%, continuing to overpay / save to repay the loan element?
It is too soon to approach my current lender as they say three months before expiry, so looking for some help / handy ways to calculate the maths / tips on whether a mortgage broker or IFA would be better to talk to...

Thanks!

dobsoncrew

The Co-Op only accept new purchases. Who is your current provider ? I am in the same position fixed rate finishes in April though

dobsoncrew

Sorry forgot to welcome you to the board. Welcome

Spottypig

Thanks for the welcome!

Current provider is Natwest; i've been making monthly overpayments plus lump sums when I can afford it, so have knocked £10k of the original balance. I'm just a bit confused about what happens next and to be honest, a bit jealous of all the lower rate options I see when I look at mortgage websites!

Is it naive to think that in another three years when interest starts becoming payable on the loan amount that I will be able to just remortage to include it all?!?

kingstreet

Before you do anything else, you need to ask the second charge holder if it will grant you a deed of postponement. If it won't, remortgaging and leaving the second charge in-situ isn't an option.

This is because when your first mortgage is repaid, the second charge is promoted to a first and your new lender will not be prepared to accept that. The deed of postponement keeps the second as a second.

Your options are;-

- remain with NatWest on SVR
- remain with NatWest on customer retention product (ie new fix)
- remortgage first mortgage elsewhere (with deed of postponement)
- remortgage whole debt elsewhere (if sufficient equity and income to allow)
You need a valuation to find out what equity you have (Hometrack? £20 for their desktop version) and I'd suggest starting serious work on this around April, if the current deal ends in June.

An independent or whole market broker would probably be a good second point of call after you find out the situation with the second charge.

Is it naive to think that in another three years when interest starts becoming payable on the loan amount that I will be able to just remortage to include it all?!?

Crystal-ball gazing? Not a good idea. You might, you might not.

Spottypig

Thanks Kingstreet - that information is really good - I was aware that the second charge would stick til repaid but not that it automatically goes up a level once the mortgage is paid.

I will talk to the housing association to get their views on the deed of postponement and talk to Natwest around April. In terms of mortaging the full amount, the valuation is going to be the key part I agree - which with new builds is always a tricky one.

Dobsoncrew - would be great to hear what happens to your mortgage in April time.