remortgaging - legal side - please help

danlightbulb

Hi all.

I need to remortgage soon and have been getting quotes from several people.

The situation is that i'm with HSBC and by stopping with them I can get a straight switch onto a new fixed rate without any fees at all. While this is easy and quick, the rates are fairly high (6.09%) compared to others i've found on moneyfacts.com

So, I spotted a Natwest deal at 5.39% for 2 years. Phoned them up and there is a £999 fee which can be added to the mortgage, a £245 valuation fee and then (and this is the bit I dont get) he said about £500 legal fees. I asked what this was and he said I have to use my own solicitor and they do all the searches again etc. This seems strange to me as a mine won't have appeared in my back garden since I bought the house 3 years ago!

But then other Natwest deals have higher rates but lower (or free) fees.

Now I dont know what to do. If I stick with HSBC I will pay about £30 - 40 a month higher than Natwest but won't have to pay the fees or have the hassle of instructing a solicitor. While I understand the principle of working out the true costs I am having trouble with the costings now that I am getting into this detail.


Can any one help.

Ps I tried a broker (L&C) but they didn't seem to be able to expain the whole legal fees thing very well and they mortgage they found me was about the same monthly cost as HSBC but was fee free.

Thanks

apk1

To remortgage to another lender, the lender has to ensure the property offers good security for them this is doen by valuation , and also by confirming title etc for the property, they will do searches to check amongst overthings that there are no further charges over the property, and there is no planned developement which cold adversly affect the value of your property, eg a motorway or sewerage works at the bottom of your garden.

With regard to the actual remortgage, what size is your mortgage, generally speaking paying fees in return for a lower rate is only worthwhile with larger mortgages.

danlightbulb

Hi apk1 thanks for your response.

Mortgage is for £85k at present. House worth £120k.

All the true costs over 2 years iv'e been getting have been within £500 to £1k of each other so I'm having difficulty deciding whether to switch or just to stick with HSBC.

As I said I owe £85k and I want capital repayment over 27 years.

If I stick with HSBC I can get this for a monthly cost of £536 over 2 years (fixed at 6.09%). Ive worked out this is a true cost of £12864.

Now the best ive seen on moneyfacts is a true cost of £12536 with Natwest (5.45%). For the sake of £328 I don't know whether its worth the hassle of switching. The monthly cost of Natwest is only £501 though a saving of £35 a month.