Best next step?

Ben_T_2

Hi all,

I've dipped in and out of the forums over the years as a 'lurker' but have now joined up as I could really do with some good unbiased advice from people who are alot more savvy than I am - I'm feeling slightly overwhelmed...!

I recently seperated from my partner and have decided to stay in our home and take over the mortage on my own.
In October, we come to the end of our 2 years fixed rate which is currently at 5.99%, and will change into a rate of 3.94 %.

I've just arranged a new mortage with a brand new lender and though it's been approved I haven't signed anything. I've just gone through the figures and now I'm very unsure as to whether this is at all the best way forward for me in terms of all the fees associated with moving a mortage versus staying put with the current provider, and like I say, I'm not exactly brimming with experience with this...!

After talking about the proposed charges with my ex partner, she has suggested I speak with our current provider and while I totally agree with this thinking, it hadn't occured to me to do this prior to speaking to a mortgage broker. Looking back this is just crazy no?

I've decided to pay off a substantial amount from the existing mortage and that has formed the basis of the new mortgage offer which would be 2 years fixed at 3.64% and then 4.24% after that.

Looking at these figures now, it seems like a no brainer that moving mortages would be a total waste of money, or am I missing something vital? The only upshot would be the .3% difference and the fact that the proposed new mortage would be clamped for 2 years..

I'm going to contact the bank first thing tommorow but would our current provider be able to negotiate some sort of deal for me to get a better rate to keep me as a customer? If I did stay with my current provider, would there be all the usual charges with setting up a new mortage (now just in my name) or would it be easier as I'm an existing customer?

Any advice would be very welcome!!

ACG

Your current provider may offer you a new deal - that may or may not incur fees to set it up depending on the deals they have.
You could also just remain on your lenders standard variable rate (which is what it will revert to if you leave it).
Lastly you can go to a different lender - the one that has accepted to you or another.
As for which is best, thats for you to decide or a mortgage advisor if you use one.

Dont forget you may need to arrange for a transfer of equity on the deeds of the house - this ensures your ex is taken off the deeds.

Quite an open question you have there, its difficult to answer but hopefully ive helped a little.

Ben_T_2

Thanks for the quick answer ACG...

I guess my main thinking was that the amount of costs that I will incur from moving the mortage won't offset the .3% difference in interest rates between the current and proposed mortages..?

Yup, the charges for taking off my partner's name are fairly small, so that's at least something!

Ben_T_2

ps I should mention that the mortgage advisor offered me this deal based on all the info I gave him, and I have no reason to doubt his integrity, but it now seems the gains are greatly outweighed by the new arrangement fees and paying the penalty to leaving the current mortgage etc...

ACG

stick with the existing mortgage then?

Seems strange to change if you will be financially worse off - unless of course your wanting to fix into a rate for a few years.

But thats your decision to make.

Ben_T_2

Heh heh yes - it does seem straightforward now seeing it on paper! Yes, the only upshot to moving would be to lock into that 2 years fixed rate..

My thinking is sound though in terms of fees/charges over gains? I'm not missing something crucially important here!?

Thanks for provding an impartial ear!

Thrugelmir

Ben_T wrote: »

I'm going to contact the bank first thing tommorow but would our current provider be able to negotiate some sort of deal for me to get a better rate to keep me as a customer?

Lenders don't negotiate rates. They've no need to. The question is do you meet their criteria i.e. target lending market.

Ben_T_2

So your saying that they're will be no room for negotiation at all?

I'd like to hold up a pencil case that they gave me when I was a nipper when I started saving with them to prove I'm still a loyal customer. I know this means nothing to them in reality of course...bah.

Dave_Ham

Whilst you cannot haggle with your lender, you need to find out 2 key pieces of information

1 - What rate is your Standard Variable Rate (SVR) ie what will you go to if you do nothing..

2 - At your loan to value (after you have made a lump sum payment) what deals will your existing lender offer you?

You can then assess the 3 options you have (the 3rd one being changing lenders)

Aside from a product fee (which you may pay on a new deal with the bank) and a broker fee if applicable) there should not really be any other huge, additional costs as most remortgages have them as part of the package.

Good luck

Ben_T_2

Hi Dave,

Thanks for the info.

I have all the proposed paperwork for the new mortage deal from the broker, conveyancing firm and it just needs a signature. As I haven't signed anything at all, I'm under no obligation to still go forward with this before talking to my current lender?

The last thing I want to do is mess about the mortage advisor as afterall, he's just trying to do his job, but at the same time this isn't a decision I can go lightly into. I've arranged a meeting with the bank (who's my mortgage provider) to go through things, so should I just be honest with my broker and tell him what the deal is?

If I stayed with my current lender and take out a new mortgage in my name, is there any benfits from being with them already in terms of all the fees or does everything get reset as a brand new application? Is this something that's down to their discretion or simply how it's done?

Sorry - wall of questions!

Dave_Ham

Absolutely tell your adviser, do not want them getting keen and instrcuting anything until you are sure. Also, always like to be honest with people.

If you get a better deal, or similar with no grief then tell your adviser. It may force them to look a bit harder than the Santander deal they have currently found you.

Lastly, it will be a new application in just your name although your reference number is likely to remain the same (depending upon lender)

Good luck