ERC - remortgaging -help please

cazaline

Hi
I currently have a property which I purchased in my own name in April 2007 at £187500. I paid cash for the majority and obtained a 10 year fixed rate at 4.95% with YBS, currently owe approx 41000 and pay £827 pcm

Just bought some land and building a house with family members, we are pooling our money so have available cash but I need to take another mortgage for about £120000-130000, dont really want a second mortgage as too much outgoing.

Spoke with YBS - options so far are
1. I will have to pay £3400 early redemption charge if I exit as off today.
2. Change mortgage into mine and husbands name to allow me to have extra money required over 25 years , this will cost £75 valuation fee, £300-500 solicitor fees to change mortgage detaisl and £200 to lender but can have a fixed rate for 2 years at 4.49% so pay £880pcm.

The aim is that in 2 years the houses will be built and I can sell mine and pay the total back in full as I will sell my house which by the time it all works out will leave me mortgage clear.

I would really like some advice please as I am not sure this is the best way to stay with YBS but paying the ERC of £3400 would be difficult.

Is there any deals out there which would be better or ones which pay your erc?

Thanks for anyones help in advance

GMS

No lender will pay your ERC.

Will YBS not allow you to keep the current product and top up with a new product?

kingstreet

I had the same thought as GMS.

Won't your existing lender provide additional borrowing/further advance on one of its current product range? Your existing mortgage stays on its current rate and you avoid the ERP.

You may still have to convert to joint and do the transfer of equity if you don't have enough income alone to justify the extra borrowing.

Thrugelmir

May be worth enquiring whether funds will be released for the purpose .

I would suggest possibly not.

opinions4u

The aim is that in 2 years the houses will be built and I can sell mine and pay the total back in full as I will sell my house which by the time it all works out will leave me mortgage clear

Will the ERC be the same then? If so, you're merely deciding when to pay the bill. Now or in two years.

I would really like some advice please as I am not sure this is the best way to stay with YBS but paying the ERC of £3400 would be difficult.

Have you asked them if they'll lend you money for the project? If they will it may well be with a top up product. No ERC payable.

Is there any deals out there which would be better

Yes. See a broker.

or ones which pay your erc?

Nobody will pay it for you. They may lend it to you.