Never remortgaged before

em_z

Hi All
Just after a bit of advice from the knowledgable folks on here about remortgaging. I'm currently with Halifax, and have been since taking out the mortgage on my first home at 19. Eleven years and one house move later I've just come off a 2 yr fix onto the SVR, 3.99%.

I'm looking at the co-op 5 yr fix (fee free) at 3.29% as I have 72% LTV(if the valuation agrees it's still worth what I paid for it). I bank with them and have always been happy with their service.

I'm not really sure how a remortgage works e.g will I have to pay the Halifax anything for leaving? I'm anticipating a fee for something or other! How does the valuation work? Anything else I need to know?!

Thanks everyone

olly300

1. Get your mortgage documentation out.
2. There should be a phone number on there for the Halifax.
3. Phone up the Halifax with a pen and a piece of paper handy, and ask them what the current value is of your mortgage and the redemption amount. DO NOT ADMIT YOU ARE LOOKING ELSEWHERE otherwise they will try and sell you stuff.
4. They will give you two figures which may or may not be the same, so write them down.
5. They should agree to send you a letter stating these figures.

Meanwhile the Co-op will send a surveyor out. The surveyor will phone you and arrange a date when they can come and view the property.

The Co-op will appoint a solicitor. This solicitor will send you paperwork so just read it and follow what it says.

em_z

Thanks. So the difference between the two figures will be the fees? Any idea how much these things tend to cost? And do you think the 0.7% rate reduction is worth the hassle of switching? Ta

olly300

em_z wrote: »

Thanks. So the difference between the two figures will be the fees?

Yes - the document they send you should state clearly the cost of any mortgage exit fee if there is one.

em_z wrote: »

Any idea how much these things tend to cost?

I don't know what the Halifax's is unfortunately. They tend to range from £0 - £500.

Your most recent mortgage documentation should state it somewhere.

em_z wrote: »

And do you think the 0.7% rate reduction is worth the hassle of switching? Ta

There is a useful excel spreadsheet you can download and put your figures in to compare two mortgages - http://www.locostfireblade.co.uk/spreadsheet/Index.html

It was created by locoblade, a member of this site

Edited to say: With a 5 year fix around years 3-5 you should definitely see the difference.

Crashandburn

Halifax will charge a £245 deed release fee but this is already included in the figure they will give you. As you are on the SVR, there are no other fees to pay to them so you are remortgaging the current outstanding balance figure only.

As for it being worthwhile, then this bit is best to get some advice on. Not knowing how big or small the mortgage is, then you have to see if the rate saving is going to be worth the effort.

As for being an effort, then new lenders will give a usually a free valuation and a free solicitor and only their product set up fees are left. Some have large fees and other none hence why best to get some pointers as to which way you should go.

Good luck

kingstreet

If you look on your annual mortgage statement, the fee is shown on there as "mortgage account fee" and it's the £245 Crashandburn has mentioned.

The redemption figure quoted on there is what you would have paid to redeem the mortgage on the date the statement was prepared. Make an allowance for capital repaid since then.

em_z

Thanks for all this info guys!
Re: is it worth switching: I have 107k on the mortgage with a remaining term of 38 years (although I'm overpaying each month to shorten the term without losing the flexibility of a longer term). My current SVR is 3.99%, thinking of a switch to 3.29% (based on 75% LTV), saving 0.7% interest. I'll also have a look on the spreadsheet suggested earlier.

dimbo61

Its not just a case of saving 0.7% as you are looking at a long term 5 year fix !!!!
Now if you put the figures into " Whatsthecost" website you can play around with the numbers and see how much you will owe in 5 years.
38 years is a VERY VERY long time so how old will you be ?
If you want to pay the same amount as you are now on 3.99% or your previous fix rate amount you may well reduce the term by a couple of years and SAVE THOUSANDS IN INTEREST

Rafter

em_z

As well as looking at the immediate reduction in rate, you need to factor in that the Halifax rate of 3.99% is variable and will go up if the base rate rises (which it probably will) during the next 5 years, or more importantly if Halifax decide they want to raise it. They raised it by 0.5% in 2012 even though base rate stayed the same.

Personally I would go for it - fixing for 5 years or even longer while long term fixed rates are at their lowest ever. In theory it is possible that rates will fall a bit further or you could be a winner by sticking with trackers, but as someone who has taken fixed rates in the past it appears that you value the certainty.

If you are 'doing it yourself' rather than using a mortgage broker, make sure you are definately getting the best deal after you have included all fees and charges. Some deals include percentage fees or larger arrangement fees which make the headline rate look good but over the 5 year term might work out more expensive than a lower fee but higher rate product.

Good luck

R.