Increase mortgage & remortgage due soon

smash7

Hello, I wonder if anyone could help me as I am getting lost in the mortgage world!


We currently have two mortgages on one property, as follows (both Woolwich)
1. £87k tracker 0.67% above base rate indefinitely
2. £138k tracker 2.49% above base rate until 30th June 2015 (Exit fee £1470)

In addition to this, we will need to increase our mortgage by £50k in April for an extension.

Clearly the First part of the mortgage we keep regardless as the rate is amazingly low.

My question is - for the second and third part of the mortgage, are we to treat them separately; apply for the third mortgage in April (we have already been pre-approved) and then remortgage the second part in June?

When we apply for the third part of the mortgage, is this in essence a re-mortgage on the property (as we aren't putting down a deposit, house has risen in value by £40k in last two years). So will we be remortgaging twice in the same year?

Also, can we have mortgages on the same house with different providers or do they all have to be with the same provider?

Thanks in advance for your help from a very confused Smash7!

Foxy-Stoat_3

You can take out a secured loan with another lender if you want to, but I would stick with your current lender though.

I would wait for a few months so you don't pay the exit fee.

kingstreet

A remortgage is a new mortgage with a new lender used to repay your existing mortgage and possibly raise extra funds.

You have one "first" mortgage on your home. The homeloan is split into separate sub-accounts which represent different borrowing at different rates taken at different times.

Your lender may allow you to change the rate/product to one sub-account or another.

When you take your additional borrowing from your existing lender, it will be offered at whatever rate your lender offers or from which you can choose.

No. You cannot have more than one first mortgage with one lender on a property. A second-charge lender may be prepared to lend the additional money you need, but in return for security which isn't as good as that your mortgage lender has, the rate won;t be as good.

A first mortgage means the lender has priority over any other lending secured on the property. You can have only one first charge. Other secured lending would be a second charge, which means there is a chance the lender may not get back its money if the property was repossessed and the first charge holder realised only the debt it is owed.

smash7

kingstreet wrote: »

A remortgage is a new mortgage with a new lender used to repay your existing mortgage and possibly raise extra funds.

You have one "first" mortgage on your home. The homeloan is split into separate sub-accounts which represent different borrowing at different rates taken at different times.

Your lender may allow you to change the rate/product to one sub-account or another.

When you take your additional borrowing from your existing lender, it will be offered at whatever rate your lender offers or from which you can choose.

No. You cannot have more than one first mortgage with one lender on a property. A second-charge lender may be prepared to lend the additional money you need, but in return for security which isn't as good as that your mortgage lender has, the rate won;t be as good.

A first mortgage means the lender has priority over any other lending secured on the property. You can have only one first charge. Other secured lending would be a second charge, which means there is a chance the lender may not get back its money if the property was repossessed and the first charge holder realised only the debt it is owed.

Thanks for this, I think I understand.


So in essence, we have to stay with Woolwich regardless as that is who the First charge is with. And we will have two separate additional borrowings by the end of this year, one of £50k in April and one of £138k renegotiated (after the rate has expired) in July.


Is that right?


Many thanks
Smash

kingstreet

Yep. That's about the measure of it.