Mortgage Advice - young couple remortgaging

nicjane113

I'm looking for a little advice as our mortgage is due to come out of its fixed period on 28th Feb. We are 23 & 24 so don't know a great deal about mortgages and there is 25 years left on our current mortgage.

The house and mortgage (alliance & leicester) are currently in my partners name who bought the house 5 years ago.
I moved in 4 years ago and am basically classed as a lodger as my name isn't on anything and we're not married.

As the mortgage is due to come out of its fixed period we have enquired about remortgaging and getting the house put into joint names (putting the title deeds of the house in joint names will cost £500)

We called Alliance & Leicester and they can transfer it to Santander with no fee and fix it for a 2 year period at 3.99% for £365.04 per month (we currently pay £406 per month) or a 5 year period at 4.79% for £396.63

We have also found a 2 year fixed rate with Northern Rock at 4.19% with no fee, a free valuation and £500 cashback at £376.58 per month - we could use the £500 cashback to pay for the change of title deeds.

My partner is keen on fixing for 5 years as rates are likely to go up so it basically comes down to either fixing for 2 years and getting everything sorted with the house being put into joint names but risking the rates going up or fixing for 5 years and putting the house in joint names at a later date when we can afford the solicitors fees.

Does anybody have an recomendations?
Also do we have to put things such as life insurance and payment protection insurance in joint names too? We both have individual life insurance policies but one ppi policy in my partners name only.

kingstreet

What loan to value have you used for these quotes?

How have you settled on a value for the property?

If you go for a remortgage with free legals, the transfer of equity to add you will probably be a bit cheaper if the same firm does both the remortgage and the TofE. IIRC last one I had done was £350 inc VAT for a remortgage "free-legal" solicitor.

nicjane113

Our loan to value was worked out at about 86% so we don't have a great deal of options.

Our current mortgage is for around £74,000 and the house is valued at around £85,000, this is based on an estimate of what houses in our street have been selling for to get a minimum value.

kingstreet

I can't argue with that.

Your other half is going to have to work out which he prefers. Two years or five. Once he decides that, he can start looking at products in detail.

Life cover may be unalterable. Often your only option is to cancel a term assurance and write a new one. Some of the "menu" plans allow you to add lives, increase cover and so on.

If you retain a mortgage in his name alone, you should continue the existing Mortgage Payment Protection if you are concerned about the possibility of involuntary unemployment. Most plans only cover those named on the mortgage. You could consider looking for one of the "bill payment" type plans in the interim, if you're worried about not being covered.

Joint cover could be taken if you do proceed with a joint mortgage.

You need to look at what you have, then establish what you can do with it.

Millie_Millsters

nicjane113 wrote: »

We called Alliance & Leicester and they can transfer it to Santander

In case you don't realise... A&L were bought out by Santander, so they are the same bank.

Gary123456790

Hi,

We have just moved mortgage from an A&L one to Santander - our new rate is 3.49% fixed for 2 years with no fee. For reference our LTV is around 40%. I found their offerings very competitive.

Also - with Santander there is no fee to change term if required (A&L was £25 fee each term change) and we can overpay up to 10% a year at any time with no monthly limit (A&L limits were 10% in Jan only plus £499 pm).

One big benefit was no valuation (so no fee for this) or anything else to pay, and no checks on payslips / employment so it was very simple. I would have struggled to move to a different lender as I have just changed job and my wife has finshed maternity leave but decided to stay at home for the time being, so income on paper is reduced (although I can pay it no problem).

Santander actually let us come out of our last fixed deal which was at 4.49% 3 months early - I reckon they are keen to get people off all these different old mortgage deals and on to Santander ones, as then they will have a lot less different mortgages to manage.

Gary.