Flexible Mortgage

Dumbledore55

I wonder if anyone can advise me about re-mortgaging, the current fixed deal on my mortgage ends 1st August 2007. The monthly payment will go up nearly £200 if I don't change it. I'm currently with Northern Rock and they've offered me 5.29% fixed for 2 years but the fees are extortionate Product fee £1995 and Mortgage Review Fee of £295.

I need a flexible mortgage because hopefully by the end of August I'll have sold the house I'm renting out (sale going through now) and I'll need to pay that lump sum off the mortgage on the house I'm living in because the mortgage is HUGE!!

I've tried researching mortgage but all the different offers make my head spin....help...what's the best type of mortgage to get, low fees but flexible?

wardlaw

Hi Dumbledoor

NR are notorious for charging large fees, for their low fixed rates, currently 2.5%

The best way forward is to contact whole of UK mortgage Broker one who has access to the whole of the UK Market place

Make sure they dont charge fees I don't charge a fee as I am more than happy to receive commissions from a lender

There are a few good 2 year fixed rates available, which do not attract such large fees .Halifax has a good one

Alliance and Leicester have a 2year fix at 5.29% with a fee of £999.00 and no redemption penalties after the scheme end

Dumbledore55

Will these fixed rate deals allow a lump sum overpayment? Is it worth considering a discount or tracker mortgage?

wardlaw

yes you can make overpayments

Fixed or tacker I really cannot advise you as I am not party to your own particular circumstances

The rate will go up next week, but will it go up again I dont know But it looks probable

John

homer_j_3

Wardlaw, your skills and scope amaze me - first you write for papers and on the radio and now you work on the BOE committee too - could I have the lottery numbers for the euro lottery on Friday?

You cannot say for definite that the rate will go up - however likely it may seem.

If the OP needs to make a substantial capital repayment, neither the fixed rates you have indicated would be suitable as they are limited to the amoun t you can overpay.

I would suggest that you go and find a local fee free whole of market broker and let them fully understand your circumstances before spurting out various deals that may not have any relevance to your situation.

You may find that if you still want fixed, there are ones that will have no tie ins but you will not get the most competitive rate.

Dumbledore55

homer_j wrote: »

I would suggest that you go and find a local fee free whole of market broker and let them fully understand your circumstances before spurting out various deals that may not have any relevance to your situation.

You may find that if you still want fixed, there are ones that will have no tie ins but you will not get the most competitive rate.

I'm not sure if this comment is for me or the previous poster. If it's for me, I haven't actually said I wanted a fixed deal, just that my current fixed one is ending and NR have offered a new fixed deal. I had fixed last time (2 years ago) because i was struggling to manage my debts and wanted to know exactly what I had to pay out each month. My financial situation is a lot different now which is why I'm considering other options.

I hear what you say, and I will seek advice from a broker as soon as I can.

Thanks

JoeK_3

Dumbledore55 wrote: »

I wonder if anyone can advise me about re-mortgaging, the current fixed deal on my mortgage ends 1st August 2007. The monthly payment will go up nearly £200 if I don't change it. I'm currently with Northern Rock and they've offered me 5.29% fixed for 2 years but the fees are extortionate Product fee £1995 and Mortgage Review Fee of £295.

I need a flexible mortgage because hopefully by the end of August I'll have sold the house I'm renting out (sale going through now) and I'll need to pay that lump sum off the mortgage on the house I'm living in because the mortgage is HUGE!!

I've tried researching mortgage but all the different offers make my head spin....help...what's the best type of mortgage to get, low fees but flexible?

I would agree that you need the services of a good whole of market mortgage broker. Once you have found the person that you like and trust follow their guidance until the end of your mortgage term.

If I was you, I would arrange the best fixed rate that you can find and don't complete until the end of August once the money has come in from the sale of your other property.

A lenders offer will last for a minimum of 3 months, with the ability to extend this for a further 3 month period.

Technically, you could start the ball rolling now.

JoeK

MarkyMarkD

Now, back to the topic, maybe?

I would agree fervently with JoeK that if you must have a fixed rate, get a mortgage offer sorted out prior to 1 August, but don't remortgage until the proceeds from the house sale arrive at which point you can borrow the lower amount and avoid any problems with repayment penalties. In other words, forget about choosing a mortgage which has sufficient flexibility for you to make a huge overpayment around 1 month into the life of the loan.

Or, alternatively, choose a variable product which has no overpayment penalties at all, and remortgage on 1 August. A far higher proportion of variable rate products are flexible.

And consider whether the lender you choose is likely to be worth staying with in the longer term - NR might seem attractive, but so many people then think they are useless to stay with because of the HUGE product fees they want for switching products.

As a comparison, A&L (who my mortgage is currently with) would let a customer in your situation (coming to the end of their current deal) have a 2 year fix at the same 5.29%, but with fees of £999+£250, i.e. over £1,000 less than NR want from you.

I remortgaged to A&L specifically because of this - it's not just the initial rate which is attractive, but also the deals you can get further along the line.

Mr_helpful

wardlaw wrote: »

Make sure they dont charge fees I don't charge a fee as I am more than happy to receive commissions from a lender

Not exactly what your website says is it?