Moving from Off-set to Repayment....The Practicalities?

southerndave

Just a question for those that have done this:

What were the practicalities of moving from an off-set mortgage (Virgin One, RBS One, Natwest, Etc) to a 'normal' repayment mortgage? Particularly interested in how you go about ensuring you had 'spent' enough of the available balance or facility to ensure the new mortage paid out enough to give you your savings back, rather than only covering the remaining amount owed?

Currently thinking of changing from Virgin One to fixed rate repayment but the actualities of transfer seem complex from my perspective....

Thrugelmir

If you sell your property. Then the proceeds from the sale will be used to discharge the outstanding balance on the account. Any excess balance will then be passed to you by the solicitor handling the sale.

The solicitor in effect disperses the proceeds.

southerndave

Thanks, but that's not at all what I meant......I am not selling my house, merely looking at the possibility of re-mortgaging with a different type of mortgage, hence my caveat of 'those who have done this' already......

bigadaj

Might help if you actually posted some numbers. Simplistically it's just a remortgage, so you're just subject to the normal constraints of ltv, affordability, income etc.

Once you've determined the level fo the mortgage then it's probable that you would adjust the offset mortgage to match that shortly before you transfer to the new mortgage, ie move what you consider your savings into an alternate account.

Thrugelmir

southerndave wrote: »

Thanks, but that's not at all what I meant......I am not selling my house, merely looking at the possibility of re-mortgaging with a different type of mortgage, hence my caveat of 'those who have done this' already......

Same principle applies. Regarding discharge of mortgage. Except funds are advanced by the new lender.

ValHaller

southerndave wrote: »

Thanks, but that's not at all what I meant......I am not selling my house, merely looking at the possibility of re-mortgaging with a different type of mortgage, hence my caveat of 'those who have done this' already......

There is enough expertise here to be able to deal with the question without your caveat.

If you want your savings back, then withdraw them from the offset before re-mortgaging for the whole amount outstanding.

What is the driver behind this proposed move? An answer to this question may bring forth other solutions to your problem

southerndave

Thanks for replies. Its hard to explain what I am asking, so I expected some of the above. I'll try again....

I think I get the theory behind moving from one type of mortgage to another, but I wanted to hear from people who have made this switch to see how they did it practically, if that makes better sense.

Figures (in my sig BTW) are roughly £100k mortgage with £80k outstanding. Wanted to re-mortgage at £95k to release some cash. If theory is correct, new mortgage provider will only pay what is owed at time of switch, so in this case £80k.

To get £95k I have to make sure the off-set is at or around this figure, but my question is what's the best way of doing this with the minimum of disruption to daily living like direct debits, wages, etc. How do you do this in a given time frame?

As for the why, it is kind of hypothetical at the moment and to be honest I am not even sure it is worth the hassle, but I think near future events may force our hand and I am now doing my homework in case.

Does that make more sense as a question? So has anyone made the switch from an off-set to a fixed rate or repayment mortgage?

ValHaller

What have you done with your overpayments? Have you used them to offset or have you used them to pay down?

If you have locked the money in, then you will need to make a case for borrowing 95 from a new lender which does not appear any easier than getting your current lender to release your overpayments back to you.

Thrugelmir

southerndave wrote: »

Figures (in my sig BTW) are roughly £100k mortgage with £80k outstanding. Wanted to re-mortgage at £95k to release some cash. If theory is correct, new mortgage provider will only pay what is owed at time of switch, so in this case £80k.

Does your One account have a £100k facility? You can draw down £20k is you wish.

southerndave

I think we are talking at cross purposes, but thanks anyway.

getmore4less

You say how much you want to borrow and ask for that from the new lender.

if they say OK then the solicitor will discharge the mortgage and the funds will probably end up in the one account as a positive ballance

if they say they will only pay off the amount owing you withraw the funds from your one account.


Why are you changing mortgage?
if you need money just take it out of the account.