Need some re-mortgage advice (first timer)

Tatsky

Hi Guys.

I wonder if someone with similar experience can help me with this?

I have a mortgage with Skipton, which we have had for 7.5 years. We are currently on the SVR which is 4.95%.

I want to secure a new, better rate. This is the first time I have ever remortgaged. My first port of call was to check with Skipton to see what deals they had for me. I spoke to a very helpful guy, however he said the min LTV they can remortgage on is 90%, and our current mortgage comes out at 94%. I thought this strange, as our property is valued at £120k, and our balance on the mortgage is £92k. However, he told me that for remortgages they go off the halifax house price index (or similar term) and that states our property as being £99.5k.

We have had a loft conversion done on the property, which should increase the value of the property further (but we have not had revalued yet).

The guy from Skipton said I can pay £60 to have the property revalued by them in order to review the LTV.

So I was trying to work out what the best course of action is now. I was planning on getting a couple of estate agents in to get a valuation, but as the guy from Skipton said this would be the resell value, and not the value skipton would use for remortgage.

I could get Skipton in to revalue, but is that £60 well spent? Are they likely to value my property higher, or do they invariably stick with the halifax valuation anyway?

I can't believe that when we bought the property Skipton gladly valued it at £120k, but now it's only worth £98.5.

My final thought is, is it better to just try and get the best possible deal with a new provider?

I have 2 trains of thought on the new deal, which is reduce the monthly mortgage repayment, or keep the monthly payment similar but greatly reduce the term due to the decreased interest rate.

Does anyone have any advice for someone in my situation?

Thanks

Paul

kingstreet

It's not a remortgage if you remain with your existing lender, it's just a customer retention product. They will use an indexed valuation system and this may not be as accurate as an inspection.

Your lender may offer you the chance to pay for an inspection to get the valuation you need to get a better product. Many do.

If you look at remortgaging, that's a new mortgage with a new lender to repay your old one, you should be able to get a free valuation and free legals.

Compare the options and see which is likely to be best for you. Make sure you factor-in any costs for leaving Skipton and for the new mortgage, if any.

Tatsky

Ah I see, so as it is a retention product they use the index, but say for example I was remortgaging to Skipton from another provider then they would remortgage based on a valuation?

There do seem to be better deals out there than what Skipton could offer me (the guy gave me some details of rates assuming my LTV came up to spec).

So potentially if I look at different providers, find the best deal for me, and go down the route of remotgaging, I will need to pay for a valuation anyway with new provider (+ fees as you say) and potentially I would be looking at an 80% LTV.

I believe the only fees with Skipton is a £125 redemption administration charge, as we now outside of our original 3 year fixed rate (4.5 years outside of that).

kingstreet

Yes.

You can easily get a remortgage where there is no valuation fee nor legal fees to pay. The rates may not be quite as good, but research should show you the pros and cons of such offers.

Yes. A discharge fee of around that is what I was expecting.