Mortgage help!

ToddForster

Hello

I was wondering if I could get some mortgage advice!?!?!?

My partner and I are looking to remortgage (and borrow an extra £1000) as our discount period with our current mortgage provider is coming to an end. I found this deal on moneysupermarket:

Lender: Scottish Widows Bank Graduate
Product Name: S Fix 5 year 100R
Type of Mortgage: Fixed Initial Rate 5.89% APR 6.8%
Max LTV: N/A
True Cost Over 5 Years: £26,591.72
Monthly Repayments: £430.05
Scheme Duration: To July 2008
Lender's Base Rate: 6.94%
Portable: Yes
Incentives: Free mortgage valuation up to £250
Free Higher Lending Charge Premium.
Cashback: £300 paid to you on completion.
Early Repayment Charge: 3% of outstanding loan before 31/07/2012
Number of monthly repayments: 13

1- I am presuming that I can get a graduate mortgage as I am only 23 and left university 2 years ago? However, we have a joint mortgage so does the fact that my partner did not go to uni affect our eligibility?
2- Am I looking at this correctly? Do we pay £430.05 for the first 13 months at 5.89%, after 13 months the rate then increases to 6.8% but our repayments stay the same. After 5 years the rate changes to the lenders base rate 6.94% and our repayment amount increases – at which point we can remortage?
3- Overall, is this a good deal?
4- When we originally bought our current mortgage we also got decreasing mortgage cover and unemployment/illness mortgage cover. I know understand that to make it cheaper we should have bought these elsewhere rather than with the mortgage provider. Are these the only ‘extras’ on top of the mortgage that we need? (Although I may change to a level term cover for life insurance rather than mortgage decreasing…..)

I would appreciate any help anyone can give!!!
Kind Regards
Hayley:j

herbiesjp

Hi Hayley

Welcome to the board

What has your current mortgage provider offered you?

1 - You will indeed be eligible for the graduate mortgage, however the enhanced income multiples will only apply to you income as your partner is not a graduate

2 - No if the rate increases to 6.8% then your monthly repayments will increase also. At the end of the 5 year fixed rate you go onto the Standard VAriable Rate, you are then able to move to a different lender if need be.

3 - No one can tell if it is good, as no one knows your circumstances and what you need from the mortgage. However stepped rates like these do not normally offer the best solution - there may be a slightly higher fixed rate which remains constant for the 5 year period, but which could be more cost effective for you

4 - if you have a freehold property there would be buildings insurance that you need to pay for (leasehold properties normally have these covered in service charges). Yu can indeed shop around for all of these covers, but please be careful that sometimes cheap does not mean best in the world of insurance, so it could be a false economy to go simply for the cheapest deal

I think your best bet may be to discuss with a fee free whole of market adviser to see what they can find for you

HTH