A MF day begins at midnight

giblet1979

Aww...why does work have to get in the way of a good sleep x

midnight_child

Very interesting developments........... Had a letter from bank the gist of which was.


Dear Mr midnight child,
Your mortgage deal will expire soon and we want to offer you a better rate rather than see you go elsewhere. We have calculated that based on changes in house price movements your LTV is 69%. If you would like a better rate rather than our SVR then please pick from these enclosed products and simply apply online.
Yours sincerely.
The Bank

Having thumbed through the tome of their products I eventually found it. 2.39%, fixed for 2 years, with no fees.

However, slight problem. The letter and the subsequent chat in my branch confirms that it can all be done online, so would be really simple (i.e. uses their new estimated valuation, plus I think some original paperwork).............. Unless I want to make any changes to the terms, which requires doing it in branch and making a whole new application from scratch via the new MMR rules.
The problem is that I want to increase my standard monthly payments, and hence lower the overall term. I could just overpay but there is an ERC and I would be well above the limit.

So i have a dilema.
1) Simple option where I have a much smaller monthly payment than now, but can only OP minimal amounts (max without ERC). Save cash somewhere for 2 years, then pay as a lump.
2) Make a whole new application via MMR, and increase my monthy payments.

Need to spend some serious time with a spreadsheet to work out what option likely saves me the most money. Any thoughts or comments most welcome though.

MC

wantabetterlife

Most banks will allow you to change the term of your mortgage at any time..I know the halifax do and people often use it as a way of avoiding erc's. You could always phone up and ask and then you could go the online route and change the term in a couple of months.

Marcello

Hi Midnight,

I think if you can shorten the term and go with the fix as previous poster suggests that will increase your payment and take some time off the term obviously, so really 2 birds with one stone IMO.

I think with rates only going one way would be a good to take a fixed rate.

What are the overpayments that are allowed on your mortgage, as Halifax is 10% of balance for that year, yet others are only 20% of monthly standard payment?

midnight_child

Thanks for the replies.

The online remortgage option keeps my same term length - I will be starting year 3 of a 25 year mortgage. It recalculates based on my previous overpayments and so I will be dropping to a monthly payment of approx £430. With this option as nothing has changed to the terms of the loan (apart from the rate they offer me), it is a simple process that allegedly takes 10 mins online.

The ERC free amount is 20% of the monthly payment, so I will be limited to an OP of less than £90 per month without penalty.

I have a meeting booked with the mortgage guru as I could only speak to someone who was not 100% sure. However, the wording of the letter and this conversation suggests that I cant just decrease the term of my mortgage as it would seem an obvious loophole. I would quite like to go with the simple option if possible (to avoid the hassle of reams of paperwork, payslips, etc), but dont want to be stuck with no option to make meaningful OPs for 2 years. I could save the cash, though I dont think I will get as good a rate as 2.39% (nearly 3% if taxed).

The main query was if someone has experience of doing an online remortgage with H$BC and if they had managed/tried to change their standard monthly payment at the same time.

One thing is certain though - I am definately going to fix it one way or the other as 2.39% is less than 3.94%

MC

Marcello

Ok so HSBC, understand a little better now. IMO the reason you can't alter online any T&C's is they need to give you the mortgage advice face to face.

Its my understanding that if you are an existing customer and tweaking your deal this would not need a re-application process, again only IMO and what Ive read from some of the great mortgage advisers here on the mortgage forum.

Another option is a HSBC tracker with unlimited overpayments however with rates only going one way I think this would increase and not be so competitive withing 1 or 2 years. Again all just my own thoughts as I'm no expert

giblet1979

Sounds like a tough decision in some ways. I think I'd be more likely to apply online for the fix and save the 'extra' OP's that you can't make without penalty, although I am quite lazy and can't stand trying to 'find' my payslips etc. I'd also worry about getting rejected under the new rules and ending up on SVR (although I doubt that would happen).

Let us know what you decide to do! x

midnight_child

I had considered the tracker, but the initial rate is actually higher than the fix, and when it eventually changes it aint going down!!

I have been mulling it all over and I keep swapping between each option. Guess I will see how the meeting goes. :think:

The other thing I would like to do is pay a lump sum of whatever I can get together, so as to remortgage at a slighty lower level. Im tempted to dip into the emergency fund, especially if I do the simple option as I could build this back up very quickly.

I managed to sell one stock last week as it reached my exit point on some good news, so thats another bit of the mortgage paid for.

MC

midnight_child

Been another busy day in the midnight house.

I just cant find the time or energy to do decorating during the week, so I want to make the most of my free weekends. Spent a load of time painting this afternoon/evening, but I had a well earned lie in this morning. 2pm is still morning on a weekend right?

You can probably guess from my username and the times of day I post that i'm rather much of a night owl.

Really looking forward to next week. Payday and mortgage payment day, so I will get to update the spreadsheet. _party_

MC

midnight_child

Evening friends.

Its the first day of the month so have update the signature again. Managed another £500 OP so my numbers are moving really quickly at the moment. Its becoming really quite pleasing to update my spreadsheet with the OP, and see 2 squares (months) that now magically show a zero balance.

Biggest achievement this month is that I have now saved over £10,000 in interest across the life of the mortgage (assuming rates stay same for another 23 years, 3 months:rotfl:).

Hopefully will be able to give another good progress report once I finally get the new mortgage deal arranged.

MC