Remortgaging - contributing funds

Custom24

Hi
I have a fairly simple question. I've just applied for a remortgage (switching to another provider as our introductory rate has expired).

I assume (perhaps wrongly) that it is possible, without any penalty, to contribute funds during this process.

For example, outstanding amount with existing provider is £190K, we only wish to borrow £160K from new provider because we will contribute the £30K difference ourselves.

Is there a name for this? Who do we pay the £30K to (I assume the new provider, because paying it to the existing one would incur an overpayment penalty).

The reason I ask is that during the application process for the new provider, there was nowhere to specify this.

Thanks for your help

Mark

FreezingWarm

Hi Fellow Newbie!
I'm no mortgage expert, so stand to be corrected, but to me, its just a remortgage. Your LTV will be lower as you'll have a larger equity in the property when its all completed- this should in theory allow you a better rate.

Good Luck

getmore4less

you pay it to the solicitor dealing with the remortgage.

they get the £160k from the new lender, £30k from you, then pay the £190k to the old lender.

Custom24

getmore4less wrote: »

you pay it to the solicitor dealing with the remortgage.

they get the £160k from the new lender, £30k from you, then pay the £190k to the old lender.

Thanks
The HSBC guy on the phone today was adamant that there was no way for HSBC (my new provider) to do this and that I would have to pay the money to my old provider before the mortgage was transferred. He did say that there should not be any charge for this with my old provider because we are past the end of the tie in period, but of course there still might be.

I will ask HSBC's solicitors.

Thrugelmir

When you remortgage, your solicitor will handle this. As they will use your money plus the funds from the new mortgage to discharge the old mortgage.

The solicitor represents both you and the 2 lenders involved.

ispookie666

Taking a different line.
Does that mean it is better to topup during remortgaging(by saving up to then) rather than overpay mortgage (which would go more towards interest repayment)

I'm a novice in this -pardon my ignorance