Best provider that allows online overpayments... any advice?

aqueousdan92

I have a £72,000 mortgage and am currently paying around £380 a month to an Alliance & Leicester account on the base rate.

I havent been able to move onto any other rate above the base rate because the actual value of my house moved below what it was when I bought it.

I hopefully will soon be in the position to pay off around half of this and hopefully also have a little left over from then on to overpay by a small amount each month. This will also remove me from the negative equity situation.

im pretty sure my current mortgage charges me if i make any overpayments, even on the base rate but i cant completely remember. Regardless of that I want a new mortgage provider that allows me to pay off my mortgage easier with an online system. (I'm mentioning this because I saw it on a guide somewhere but cant remember where it was and who the mortgage provider was!:rotfl:)

How do I approach the mortgage provider when I do find one as surely I will still be in negative equity and they wont allow me to go onto their base rate? (is that how it works with all providers?)

Thanks in advance guys!

Dan

blueberrypie

When you say "base rate", I think you probably mean Standard Variable Rate - the rate you drop onto after the initial fixed-rate portion of a mortgage is up. Is that correct?

You are not usually charged for overpayments at this stage of a mortgage.

A number of mortgage providers offer on-line access for extra payments.

I'm confused about whether you will or will not be in negative equity when you are looking to remortgage - you say you will be in a position to get yourself out of negative equity, but you also say you will still be in negative equity. You will not be able to remortgage if you are in negative equity.

As mentioned, the SVR is the rate the mortgage defaults to after a fixed-rate period at the beginning. It's not a rate you can choose at the beginning of a mortgage or remortgage. However it's not necessarily any lower than the fixed rates available (depends on the mortgage and circumstances).

northerner999

Most fixed deals allow overpayments to a point without penalty (mine was 10%) then any without penalty if you are on the SVR.

You may well be able to set up a payment via your current bank. All the online banking I use has sections for payments - if you have the acc details of your mortgage you should be able to enter it here and make whatever payments you want (as long as you are aware of any possible penalties).

aqueousdan92

Sorry I meant Standard Variable Rate, Blueberrypie. Overwhelmed with even the most basic of terms at the moment

I did wonder if I wouldnt have to pay a penalty on the SVR, I suspect it to be true for my mortgage. I cant see anywhere where I can find out though.

We are in negative equity right now. I think the lady on the phone said that it was worth below 5% less than it should be and until then we cant get onto anything other than the standard rate.

Just to clarify (it was early :rotfl:) I will hopefully be getting a lump sum of around £40,000 which I want to knock off the mortgage. If I look at any online applications for mortgages they ask for my details and will surely look at how much I have left to pay and how much the house is worth and see that I am in negative equity.

I understand the part you say here "You will not be able to remortgage if you are in negative equity." I wont be if I pay off £40,000 but I am now and now is what they will be looking at when I fill in any applications surely. (I know I am probably missing something obvious here!)

If it is the case that I can pay off as much as I want without penalty then I guess I ought to do it while I am with my current provider and then decide on a future outcome.

blueberrypie

aqueousdan92 wrote: »

I understand the part you say here "You will not be able to remortgage if you are in negative equity." I wont be if I pay off £40,000 but I am now and now is what they will be looking at when I fill in any applications surely. (I know I am probably missing something obvious here!)

When you apply for a mortgage, you ask for a certain amount of money. In your case you'll be asking for about £32k - which is not more than the value of your property.

So you have ways of doing this:

1. Pay the £40k off your current mortgage (Mortgage A), then remortgage (Mortgage for whatever balance that leaves. Mortgage A is now fully repaid, and you owe £32k to Lender B.

2. Remortgage for whatever you'll need to borrow after you've paid £40k off, and then give the £40k to the solicitor handling the remortgage, who will send it to Lender A along with the funds from Lender B, so that Mortgage A is fully paid off. You now owe Lender B £32k.

It doesn't really make much difference which way you do it, as long as Lender B is aware that you have funds from elsewhere. They will ask what the source of your deposit is - with a remortgage this would normally be "equity", but you'll be saying "inheritance" or whatever it is, so when they do the credit check and see how much is owed, Lender B will know why the amount owed is about to be reduced.

dimbo61

Just give A&L a call and ask the questions yourself.
Most lenders now have online payments and overpayments and if you are on the SVR you can pay a large lump sum off the mortgage.
Once you have the lump sum you could then pay some of it off the mortgage in order to bring your LTV down to say 75% or even 60% in order to get the best remortgage deals with your existing lender.
Put some of the money in cash ISA,s for Emergency savings and maybe a nice holiday.
Moving lender may not be worth the costs if you can get a good remortgage deal with A%L once you LTV is much better
Good Luck spend the money wisely !!