Remortgage Problem. Self cert/Kensington.

van22663

Hi all,
I am new to this site and I wonder if anyone can give me any advice.
My current mortgage is with kensington. My discount rate ends next month and I go on to standard variable rate for the next 2 years, which is my tie-in period. The rate will be 7.8% which will cost me £754 a month. I have had 4 increases in 12 months with kensington so I am obviously nervous about staying with them.
As I am a single mum with part time job and reliant on benefits, I have to have a self cert mortgage. I am currently being helped by bmi financial brokers, but they are struggling to get me taken on by anyone. They have offered me a fixed rate of 6.7% for 3 years with a company called EM financial. However, to come away from kensington will cost me £7000 early redemption penalty and on top of that the fees to the broker etc are almost £3000. This is putting £10,000 on top of my mortgage and the repayments are £710 per month.
Do I take this offer because it is fixed or take my chances with kensington and struggle on ? I am already 2 months in arrears with kensington, but in fairness to them, they are being quite helpful and are accepting whatever I can pay them. I do not know anything about BMI financial or EM financial. Any help would be very much appreciated?

homer_j_3

short answer is NO - you do not need to pay for mortgage advice and 3k is extortionate. Are you on a repayment mortgage or interest only?

If you are on repayment by going on interest only until your redemption charge period has ended may help?

van22663

many thanks for your reply. I am on interest only. The mortgage broker is on commission from lender plus charging a one off fee of £1595, the rest of the money is valuation £255, admin fee £99 then the mortgage company are charging about £1500 and solicitors fees are extra, about £500. All in all, my £115,000 interest only mortgage is going to be getting on for £128,000 when ive finished, but i am still very worried about the rising interest rates. My mortgage advisor has offered to refund me the £99 and valuation if I do not want to proceed. Her original offer was £660 a month but that company were not true self cert and wanted lots more info which I could not provide. I do not know how much longer kensington will be sympathetic with me, although I am in constant contact with them and keeping them informed.

homer_j_3

Your choices might be limited and Kensington are not known for their tolerance.

A whole of market broker will be able to get you the exact same deal if not better. If they are fee free also then you will save yourself £1595.

From what I can take from your original post - you are looking to increase your debt by 10k to save yourself £40 a month? I have some concerns with your situation though and ask you to consider what you are doing very carefully.

Have you budgeted correctly, are you realistically going to afford the new payments or are you going to be in the position you are now in 6 months time with another set of fees to pay when you need to sell the house?

van22663

Yes you are probably quite right, I am just worried that £754 with kensington will end up over £800 before the year is out. I will try to catch up with my arrears and hope it does not rise too much. If I could have got a decent fixed rate with someone else, I would not have objected to the £7000 fees with kensington, but as you say, not worth it for so little difference in repayments.
if you can recommend any whole of market brokers, that would be great. many thanks.

joeblack066

I think that the key here is th £7000 early redemption penalty, as that would take 140 months/ over 11 years at an extra £50 per month which seems to be the amount that you are worried about. (Does that make sense? What I mean is that if your mortgage goes up by another £50 per month, you could pay that for 11 years before it amounts to the £7000 early redemption fee!!) I struggle with the mortgage payments on my house, but have decided that the bricks and mortar need paying first, and am cutting my cloth to finance the recent/ expected increases. Therefore, I suggest that you post up an SOA on the DFW board, to see if there are any areas that you could save money on each month, and meet the current payments.

Guy_Montag

Couple of things to think about
1) Selling up - how long have you had the place? Made any capital gains? Sell up & rent, put any profits into your pension or something
2) Start working full time - maybe get a home job too to do in the evenings.
3) You getting all your benefits?
4) You getting all the money you should be off the kid(s) dad(s)?

To be honest - if you're on benefits you really shouldn't have tried to buy a house. You almost certainly can't afford it, as you're now finding out.

Jim_B_3

If you sold up now, could you stump up the seven grand early redemption and still have made a profit from the rising tide of house prices?

van22663

Many thanks to all of you for your advice. I have only been apart from kids dad for 3 years, so already had the house otherwise I would not have bought . It would not really help to sell the house as there is very little equity in it and I would be paying £600 upwards to rent. Also, as you can appreciate, I do not want to disrupt my childrens life anymore than I have to.

Will certainly be looking at working more hours. If anyone comes up with any amazing fixed rate deals on a self cert basis....please let me know. Many thanks once again.

horace_2

I think Gay_Montag speaks with fork tongue....

http://forum.globalhousepricecrash.com/index.php?showtopic=17988


horace

silvercar

Van22663 wrote:

As I am a single mum with part time job and reliant on benefits, I have to have a self cert mortgage

There are some lenders that would accept benefits and maintenance payments, are you sure you need to self-cert?