Advice appreciated for increasing mortgage size !

weightgain

Hey everyone. Posting this here as I'm sourcing info from friends and family and also want as many varied and serious opinions as possible.

I'm currently in a nice little flat and have started to consider moving up to a 2/3 bed house. Having seen a nice one today I'm wondering -

My current mortgage is 158k. I'm guessing when I sell (Valuation is next week) I should be walking out with 20-30k profit. This obviously can be part of my deposit. The house is valued at 205k. I'm thinking of opening with a 185k offer as some work is clearly needed (Windows / flooring etc).

I'm currently with HSBC fixed rate with a 2 year lock in at the end on variable rate. I'm gonna obtain the early repayment charge today - so my question is ;

For a mortgage of Around 185k what would suggestions be for whom to go with ?? We'd certainly be looking for a longer term (Currently 25 year) to help the short term costs.

Any discussion / thoughts would be lovely !!!

MortgageMamma

Have you asked HSBC if they can port your existing mortgage to prevent the early repayment charge. This basicaly means shifting your existing loan from the flt you have onto the house and if necessary borrowing some more from them

when does your early repayment charge end?

weightgain

Have just tried to speak to them but for some reason my security answers failed =0
Will pop into a branch on monday.

Having reviewed my mortgage documents it would seem that it's termed a "early repayment charge" that is in force until Nov '07. Total charge would be £1,870.86.

MortgageMamma

Well thats not a massive amount so it could be viable for you to look at going to another lender, dependent upon the rate you are paying now and what HSBC would be prepared to lend you if anything

BUT

It is always better to see what is on offer from your existing lender (remember to ask fora printed quotation to take away and do not sign up for anything on the spot)

The take Has Someone Been Conned Bank's offer to a broker and get them to see if they can do any better

MortgageMamma

Ps November is not so long away, and some mortgage lenders give you up to six months to complete once your mortgage IFFER (about a month down the process) has been issued, what I am saying is, if you timed this properly you could come off the early repayment charge period with Has Someone Been Conned before you complete on your next mortgage

weightgain

Thats some really helpful advice. Another forum has pointed me in the direction of a independant financial advisor - apparently you can get some free advice ??
Will make an appt to see HSBC mortgage person next week. It may all be too much to get this prperty but at leasy we've started the ground work

weightgain

Yeah, I had considered that it COULD be perfectly timed...

MortgageMamma

Yes you should see a whole of market MORTGAGE ADVISER. Dont get me wrong i have nothing against IFA's but I think you will always get better service from a subject specialist

Which forum did you go on singing pig? I sometimes go on that but I'm quite fickle I dont like the graphics!

MarkyMarkD

MM

Whilst you say that £1.9k isn't a huge amount, I would argue that it's almost always NOT worth paying redemption penalties. When you add together redemption penalties, MEAF and all the other moving costs (and even if these are paid for by the lender, it's all charged for through a less competitive rate) and ALSO consider that fixed rates have gone up since the OP will have bought their current mortgage, I don't believe it will be worth doing anything other than porting.

Definitely consider HSBC as your first port of call, and come back here with some figures if any IFA tells you that they believe it's better for you to do something else as 10 to 1 they will be fibbing - sorry!

The only reason I would possibly believe that porting isn't the best option is if HSBC won't lend you the money. But then, of course, you don't have any choice in that situation (apart from not moving).

MortgageMamma

I didnt say porting wasnt the best option in fact is was the first thing I suggested -, i Just dared to suggest that she explored her options. You really dont know for definite if the deal she is on is more competitive than whats available now, its dangerous to make assumptions - always best to CHECK with the existing lender first, then consider if there is anything more practical, like dragging ones heels to ensure completion AFTER the ERC period on a new product if possible

MarkyMarkD

No disrespect intended, MM - as you point out, your first comment was to go back to HSBC and discuss porting. My comment was made because the OP was talking about going to an adviser, and I didn't want them to be conned into remortgaging when it wasn't necessarily the right thing to do.