Urgent Advice Please Re: Moving During Fixed Rate

danuk

Hi,
Position is Took out a fixed rate mortgage with Nationwide in 2002, for three years. THen renewed in 2005 with nationwide again fixed rate for three years. Due to expire june 2008.

Mortgage is made up of
Mortgage £68k
Further advance £20k
Further advance £7k

All these are in line with mortgage and due to expire june 2008. Thing is we have seen a house which is a bargain, on sale via a friend who have offered us it for £179k.

So what i want to do is sell my house which is worth £135-£140k now and then get a new mortgage with Nationwide for £150k.....

With equity of of our house of around £40k and also the new mortgage of £150k i would be able to afford the new house and all legal/moving fees.

What i need to know is:

I earn £35k, wife currently on maternity but earns when back at work £10k roughly... she is due back in june.

If i goto nationwide will i get stung for anything, fees due to coming out of current fix rate or will they just give me the £150k total as a mortgage but make me stick to the expiry date of current fixed rate?

Would nationwide allow me to have £150k on my earnings?

Any other problems that i may come across??

Please help as really not sure how long this person will wait and need to move asap.... also need to sell asap..

Any ideas on total costs, legal, stamp, other would be great!!

MarkyMarkD

There's a few questions in there!

Nationwide will, if they agree to lend you £150k, lend you £95k on your existing fixed rate product with its existing end date and £55k on a new product (probably with its own fees, end date, etc). It might be advisable NOT to select a product with any tie-ins, given that you will have only a year until you can switch the whole lot in June 2008.

Now, as to them letting you have the loan - I think it might be a push given your current income. "Wife currently on maternity but due back in June" probably won't count for much ... she isn't working at the moment and there's no guarantee to the lender that she'll go back at all.

You won't get charged any penalties, if Nationwide are happy to lend you £150k, but if they won't you will be well into penalties.

MortgageMamma

Nationwide will most likely port the mortgage, they will normally lend up to 4.9 x single salary minus any annualised creidt commitments. If you port the loan only the original loan amount will remain on the current rate you have, any additional amounts will be put onto whatever deal the have at the moment but you would be wiser to go onto a deal with no early repayment charges so you can remortgage as one lump sum in 2008. You will pay stamp duty of 1% on your purchase and make sure you shop around for your legal work as prices can vary massively. Some brokers have access to a list of solicitors which are then rated on price, location and quality of service.

danuk

thank you for this.... so if i remortgage the full £150k , is this the best way forward?

Any other issues i may have?

MarkyMarkD

Eh?

That is not what MortgageMamma or I said.

You need to PORT your existing loan amount, on its existing product, and then take a new product for the top-up.

Remortgaging doesn't come into this - you are moving house, not switching lender.

danuk

Sorry for being thick........SO i will end up keeping my original mortgage and the two further advances. Then obtain £55k on top of it.... so would basically have 4 accounts with nationwide

£68k
£20K
£7K
£55k

And then in 2008 i could remortgage with nationwide or someone else and put them all in to the ONE pot?

Sorry again but mortgages confuse the hell out of me and its the first time of arranging it all myself.

Rebob

danuk wrote: »

Sorry for being thick........SO i will end up keeping my original mortgage and the two further advances. Then obtain £55k on top of it.... so would basically have 4 accounts with nationwide

£68k
£20K
£7K
£55k

And then in 2008 i could remortgage with nationwide or someone else and put them all in to the ONE pot?

Sorry again but mortgages confuse the hell out of me and its the first time of arranging it all myself.

Yes that is it. It is easy to do as long as you satisfy the lending criteria. I did this 4 years ago with the Abbey. It meant that on the mortgage statement I had 3 loans (1 for the original purchase, 1 home improvement loan and then 1 more to top up when we moved)

danuk

two more questions..... if i satisfy the lending criteria... and the house cost less than first thought could i keep the balance left over for house repair/legal fees/stamp duty etc?

Also when i meet with the mortgage adviser will then be able to give me AIP for this extra or would they not fully agree to the total sum until our house sells and we actually agree to buy the other one....


thanks again all for your help its getting a bit easier to understand lol

MarkyMarkD

They won't actually offer you the advance until you've agreed the property value, so I don't think the issue you suggest will arise. But given the level of equity you expect to have, adding a small amount to the loan to cover moving costs shouldn't be an issue.

danuk

well thanks all saw the advisor yesterday, although poperty value not definately agreed yet she entered the info and went through most of the steps... even credit checks and agreed we could have the £150k we wanted and added it as a fourth account.... she mentioned it may be worth fixing this fourth amount on a 5 year fix (low rate 5.34%, no fees either) and then next year fix the other three again for two years and then two years again so they meet up in five year time as one..

Glad that i got it agreed but now not sure what to do..... any ideas about going variable on the fourth rate for the year until the other three are due for renewal

Any views?

MarkyMarkD

Her suggestion is great, if you want to stay with the lender for five years, so I can see why she suggested it!

If you take your approach (the one year variable) then you can leave them completely in one year if that suits you.

Paying a fixed rate on the fourth sub-account just leads to you being tied in to Nationwide for longer - if that doesn't worry you, and the security of the fixed rate is worth having to you, then go for it!