Higher lending charge?!!

Doglover88

Initially I had £8,000 deposit and borrowed £122,000 for B&W fixed for 5 years at 4.75% this was taken out in March 2003. I now need to move and am selling my house I bought for £129,995 for £143,000 and found a new place I want for £127,000. I was hoping to port across the balance of approx. £118k and using the ‘profit’ if you can call it, that for home improvements. I can port it across but B&W say I have to pay £1,800 higher lending charge does this sound right? Its £1,800 if I want to add it to my mortgage or I can pay £1,000 as soon as I move house.
Any help would be very much appreciated
Glen

Doglover88

anyone? 7 of you have read it....

herbiesjp

It looks like the scheme you are being offered by B&W has a Higher Lender Charge (formerly known as MIG) due to the fact that you are borrowing over 90% of the value of the property i.e. £118k against £127 = 93%

If you were to borrow less then they may not charge the HLC depending on the scheme. Otheriwse you have 2 options pay up front or add to the loan.

dunstonh

Or you can choose a lender that doesnt charge MIG.

Compensationitis

Yep, no need for MIG, find another lender if you are not subject to early redemption charges.

Doglover88

Thanks guys (and possibly girls)
alas Im tied in for another 3 years and to get out will cost me £7,000 so i guess I'll be having to cough up
Many thanks once again
Glen

johannamse

herbiesjp wrote:

It looks like the scheme you are being offered by B&W has a Higher Lender Charge (formerly known as MIG) due to the fact that you are borrowing over 90% of the value of the property i.e. £118k against £127 = 93%

If you were to borrow less then they may not charge the HLC depending on the scheme. Otheriwse you have 2 options pay up front or add to the loan.

It seems silly to pay - ask them what the limit is - and for the sake of putting a little bit extar down just put off your SOME of your home improvements for a year, until you save up. 1800/1000 is ALOT of paint and carpet. Don't give them the money!!

dougk_2

I would try and find another way of raising a couple of thousand to avoid paying the HLC.

You basically need to have a £13,000 deposit so you stay under the 90%. Whether this is quite a legitimate way is another question but i have known several "friends" to borrow on a 0% credit card to get the extra deposit needed. Sure you have to pay it back but if its as a short term loan it could be a way.

Fairdo_2

It sounds like your stuffed either way. If you put down some of your "profit" to borrow £114,300 it looks like you would save on the HLC, but it looks like you may have to pay an Early Repayment Charge on the amount you pay off, unless you had a deal that allowed you to make partial overpayments penalty free.

It would be worth checking with B&W if you would have a charge that way. (ASsuming you could afford yo reduce your borrowing by that much)

Doglover88

dougk wrote:

I would try and find another way of raising a couple of thousand to avoid paying the HLC.

You basically need to have a £13,000 deposit so you stay under the 90%. Whether this is quite a legitimate way is another question but i have known several "friends" to borrow on a 0% credit card to get the extra deposit needed. Sure you have to pay it back but if its as a short term loan it could be a way.

Do all mortgages use the 'over 90%' as i spoke on the phone yesterday to a girl from B&W and she seemed to think it was 85%?

dougk_2

Its down to the individual lender. Most tend to use 90% but others use 85% or 95%.
However, if you look at B&W website , their 5.19% fixed 5 year mortgages say the HLC is paid by them!
Time to do some negotiating I feel! That said what rate are they giving you on the new ported product?