To remorgage or not remorgage??

nudge1988

Hi All,

I have a pretty poor morgage at the moment (i was a first time buyer with a small deposit at the time) which was fixed for 5 years. The question I am asking is wether I should remorgage or not? Here are my details,

I have 32 years left on my morgage-
If i choose to change morgage I will have early repayment fees of £1100 to pay.
I have found morgages avaliable to me on comparison sites which can reduce my morgage down to 20 years but keep my monthly payments the same as now (fixed rate). Should I stick it out with the current rate or add the £1100 to my morgage and change provider? Are there any other fees which I am overlooking?

I should note that I cant really afford to pay any lump some fees I was hoping I could just add it to my morgage?

Any advice would be great Thanks

Joe

nudge1988

also I have 2 years left on my current morgage.

latecomer

http://www.moneysavingexpert.com/mortgages/fixed-mortgage-calculator

Put the figures in there. Additional costs could include valuation fees and legal fees

kingstreet

How have you worked out the value of the property and the loan to value from that?

R_P_W

maybe telling us what interest rate you are paying now and what products you have been comparing it to?

nudge1988

my current rate is 6.4% and I am comparing to around the 4% mark

nudge1988

kingstreet wrote: »

How have you worked out the value of the property and the loan to value from that?

Not exactly sure what you mean, It will be a 90% morgage if thats what you mean

kingstreet

What I'm trying to find out is how reliable your valuation figure is likely to be and if that 90% is actually going to be way out when the surveyor visits to carry out the valuation.

nudge1988

kingstreet wrote: »

What I'm trying to find out is how reliable your valuation figure is likely to be and if that 90% is actually going to be way out when the surveyor visits to carry out the valuation.

The 90% will be of the price which I paid for the house but I believe the house will be worth more than what I paid for it.

I paid £63000, If I remorgage I will be looking for 90% of this figure ish therefore ~£56700. I believe the house is actually worth ~£75000

So 56700/75000*100 = ~75%

Is this what you mean?

Just for extra information, when I have been searching for remorgage deals I have been using the value of the house as it was when I bought it i.e. 90%, should I have been using 75% as calculated above?

Cheers

kingstreet

TBH it's difficult to say. There are some parts of the UK where using the original purchase price might well give an up to date value, but there are others where the valuation might be well out on that basis, either too high or too low.

It might be worth a quick call to your existing lender to see what their desktop valuation might be. If you tell them you're thinking of remortgaging and would consider paying them the penalty and taking a new deal with them instead, they might tell you your loan to value.

A desktop and an inspection can give totally different figures, but TBH at 90% it isn't going to take much for you to be unable to remortgage due to a simple lack of equity.

Likewise, if you apply using 75% and the value is less than you estimate you won't get the product you wanted and may have been better off using a different lender and product in the first place.

It can be rather inaccurate, but what do you get if you use this;-

http://www.nationwide.co.uk/hpi/calculator/calculator.htm

?

kingstreet

So 56700/75000*100 = ~75%

That's 75.6%, and would therefore be outside the band for products upto and including 75% loan to value.