Re-mortgage, house value increase

Steeveeh

Hi All


After some advice please?


I'm coming to the end of my 5 year fixed rate deal in November. We had a really crap rate and term on the original deal (5.99% over a long period)


Also during this time our house value has increased due to renovation. We reckon we have added about 30k on top of the value.


Our current LTV is 85%, we reckon with the additional added value this will be about 73%


Our finances have also improved so can afford to not be tied to a specific repayment and can also pay more.


I have seen a deal with HSBC which is a lifetime tracker (current account) based on 10 years with initial rate of 2.59% and £499 booking fee. This increases our repayments per month by £400 which we are happy with and means we will be mortgage free in 10 years.


I guess my question is


a) what do I base my initial valuation on? I'm using house value prices in the local area. I assume the bank will re-value it?
b) is moving from fixed to tracker advisable? is there anything I should worry about?
c) is the HSBC deal a good deal?
d) should I stretch over 15 years and just make overpayments? this deal is unlimited overpayments


Thanks
Steve

AFK_Matrix

Not sure on a,c and d but in regards to b. Are you prepared for your mortgage payments to go up in the next few years? I assume you are aware that the Bank of England Base Rate its due to be increased slowly over the next couple of years? And there is no telling what those rises will be or if it will for whatever reason suddenly increase. And you will have no clue what will happen over the 10 years or lifetime of your mortgage. I personally would be looking at a fixed rate if I was remortgaging now as then you know what you will be paying for however long you fix at. But it's upto you if you feel comfortable in having a fluctuating mortgage payment.

Mortgage_Mark_2

A) Sale prices are the best indicator of what a surveyor will look at unless your property is unique.
As above, factor in a 3% rise over five years - that's what a lender will do.
C) At that LTV it's not too shabby.
D) That again depends on your circumstances for affordability. Whilst it seems a good idea to ensure your mortgage is repaid earlier, remember your minimum contractual payment will be higher, and so in any times of financial trouble you will have more to pay as a minimum. If the product allows unlimited overpayments that is certainly worth considering instead.

Probably worth speaking to a broker to discuss your affordability and views on rates etc, but if you're looking to use HSBC make sure they're an independent broker otherwise you won't be able to use that lender.

Steeveeh

Hi Guys


Thanks for taking the time to respond :-) and given me food for thought.


With regards to a broker, is it just a case of googling/yell to find one in the area?




Thanks
Steve

Mortgage_Mark_2

Steeveeh wrote: »

Hi Guys


Thanks for taking the time to respond :-) and given me food for thought.


With regards to a broker, is it just a case of googling/yell to find one in the area?




Thanks
Steve

Recommendations are always best, has anyone you know recently used one at all?

Thrugelmir

If the valuation is going to be marginal, i.e. 73% is close to 75%. Make overpayments to swing matters in your favour.