Promise this is my last question?!

Amy56

Hi all:)

I'm so sorry to bother you all again, but I've had facts and figures going around and round in my head for the past week and am slowly driving myself mad!:rotfl: There are just too many options and as the mortgage appointments seem to take forever to arrive, that leaves more time and more options for me to find and drive myself crazy with!:D

But.... I have now had, what I believe to be a moment of clarity, and I just wondered if I could run my final three options past you and I would be very grateful if you could tell me what you would do please?!:)

Option 1/ stay with HSBC, use current valuation (£205,000 that HSBC have recorded) to qualify for a tracker rate of 2.19%.

Monthly payment of £883.00, a £299 booking fee to pay & £10k home improvement loan in my hand.


Option 2/ stay with HSBC, pay for valuation and hope property is valued at £226,000 to qualify for 60%LTV tracker rate of 1.99%.

Monthly payment of £871.00, £476 in fees to pay & £10k home improvement loan in my hand.


Option 3/ remtg to First Direct, pay for valuation and hope property valued at £209,000 to qualify for 65% LTV tracker rate of 1.79%.

Monthly payment of £858.00, £197 val fee to pay, but only £9,050 home improvement loan in my hand, as remaining £950 will be the added booking fee.

All the mortgages will be for the same terms (15 years) & are lifetime trackers. As far as my property value goes - the current HSBC valuation doesn't reflect the fact that 18 months ago we had our loft extended and added a fourth bedroom, so I'm assuming there is scope for an increase in valuation, and an estimate through Zoopla does indicate that we would be fine for the highest valuation needed, but obviously there are no guarantees I realise.

I currently have two mortgage application interviews arranged - one with HSBC next week, and one with First Direct for two weeks later. So ideally I want to make a decision before the first appointment! So I'd greatly appreciate any opinions as to what you would do if you were me?:)

Many thanks for any thoughts:)

justcat

Sorry, I haven't seen your previous posts but is there a reason why you aren't using a broker?

Amy56

justcat wrote: »

Sorry, I haven't seen your previous posts but is there a reason why you aren't using a broker?

To be honest it never entered my head!:embarasse

I've always just sorted everything myself in the past - my first mortgage was when I was 19 and worked for the Halifax, so I guess I thought that I was quite switched on and from then on I've never really thought about needing one.

I guess I'm slightly apprehensive this time, as I know how much underwriting has changed since I last arranged a mortgage, and Im wondering whether it's best to stick with HSBC for ease, or if these days they'll need as much 'stuff' as going elsewhere?

The FD remortgage would require a re-val and involves a hefty fee, meaning I'd add it to the debt and end up with less of an advance. Which isn't a problem in itself, as I can find the extra money for the improvements, but I'm just wondering whether there's a calculator that I can use to see if this makes the rates of HSBC actually more attractive, due to the smaller fee outlay?

Finally, I did do a quick google search to see why I might need a broker (I do listen!;)) and I noticed that HSBC don't deal with brokers (assuming what I've read is correct!;)) - so I would imagine that would put me at a disadvantage if I were to use one, as my existing lender is naturally my first port of call - as presumably a broker wouldn't be any help in renegotiating anything with them anyway?

Feel free to point out if I'm missing something - im here to listen and take advice:)

Alter_ego

As I understand things First direct is part of HSBC, No?

Amy56

Alter_ego wrote: »

As I understand things First direct is part of HSBC, No?

Yes they are part of the same group, but nothing to stop a remortgage to them

getmore4less

Amy56 wrote: »

Option 1/ 2.19%. £883.00, £299 booking fee to pay & £10k
Option 2/ 1.99%. £871.00, £476 in fees to pay & £10k
Option 3/ 1.79%. £858.00, £197 val fee to pay, but only £9,050 home improvement loan in my hand, as remaining £950 will be the added booking fee.

All the mortgages will be for the same terms (15 years) & are lifetime trackers.

Amy56 wrote: »

I'm just wondering whether there's a calculator that I can use to see if this makes the rates of HSBC actually more attractive, due to the smaller fee outlay?

The standard comparison is add the fees set the payment the same and see which wins just use a simple calculator

http://www.whatsthecost.com/mortgage.aspx

I will assume the loan is £135400 as that fits with the payment on 1&2 and you will pay £299 of the fees.

payment £883
1. £135400 @ 2.19% 180m + £44 interest £23584
2. £135577 @ 1.99% 177m + £311 interest £21024
3. £136248 @ 1.79% 175m + £435 interest £18712

If you do the other comparison where you have £9050 in cash on all of them it will be very similar just with a lower payment.

THe issue with lifetime trackers is better deals come up early in the term before the lower rate repays the higher fees.

THe FD is a clear winner even with the higher fees.

Amy56

getmore4less wrote: »

The standard comparison is add the fees set the payment the same and see which wins just use a simple calculator

http://www.whatsthecost.com/mortgage.aspx

I will assume the loan is £135400 as that fits with the payment on 1&2 and you will pay £299 of the fees.

payment £883
1. £135400 @ 2.19% 180m + £44 interest £23584
2. £135577 @ 1.99% 177m + £311 interest £21024
3. £136248 @ 1.79% 175m + £435 interest £18712

If you do the other comparison where you have £9050 in cash on all of them it will be very similar just with a lower payment.

THe issue with lifetime trackers is better deals come up early in the term before the lower rate repays the higher fees.

THe FD is a clear winner even with the higher fees.

Thank you so much for your reply - I think that was the conclusion I had made, and was just trying to save myself any extra hassle by changing lenders. But I just needed to hear it from someone else - so thank you

getmore4less

These numbers are full term I have no idea of your change points, like a house move or a rate change or overpayment potential that will model differently.

The benefit of trackers is you only need to change once until you have a better tracker or need to change.

It looks like the driver for this change is the need to raise funds so what's your next one?

the obvious question is hen you say ...
end up with less of an advance. Which isn't a problem in itself, as I can find the extra money for the improvements


if you can find the money why are you borrowing more than you need?

(might be the issue with multiple threads)

then again home improvements can use up everything you have and more if you let them.

Amy56

getmore4less wrote: »

These numbers are full term I have no idea of your change points, like a house move or a rate change or overpayment potential that will model differently.

The benefit of trackers is you only need to change once until you have a better tracker or need to change.

It looks like the driver for this change is the need to raise funds so what's your next one?

the obvious question is hen you say ...
end up with less of an advance. Which isn't a problem in itself, as I can find the extra money for the improvements


if you can find the money why are you borrowing more than you need?

(might be the issue with multiple threads)

then again home improvements can use up everything you have and more if you let them.

Thanks again, you have really be a great help to me

This will definitely be our 'forever' home (we've been here for 17 years and see this being where we will end our days). We will definitely have no problem with any rate rises, that's why a tracker and not a fixed rate is fine by us. For the last couple of years we've been overpaying our mortgage, and whilst we have got some savings, the whole reason for the remortgage is to reduce our monthly outgoings so that we can live more for today as well as squirrelling money away for the future.

We are probably at the best time of our lives, in a good financial position with no debts aside from the mortgage, and our children are young and enjoy spending time with us, before adulthood draws them away. I've realised lately that I've been so focussed on clearing my mortgage as soon as possible, that ive been wishing our lives away to the point we are mortgage free.

Dh and I sat down and came to the conclusion, that we want to get a better balance and whilst we still want to clear our mortgage at a reasonable time (with the above figures we will be 55 when the mortgage is finished), we also want to save some money to have that security of money in the bank (having the option to repay the mortgage early if we want, but not putting the funds straight into the mortgage now and losing other options), and enjoy (yes enjoy;)) some of it with our children.;)

I do have the money to do some of the building work, and could also be spending our excess income on the renovations, but what I don't have really is the time to wait and save extra to get them done, and as you say, the costs can end up stacking up and with hidden extras, can often be more than you expect - so I'm fully expecting to have to pay out more than the loan, and can do this.

The reason we don't want to save up for the work,and for the urgency is that I need to renovate my garden - many years ago there was back access to the property, which until now we've not needed. My son starts high school in sept and if we knock down & rebuild some walls/fences, build steps etc and return the back access, this will cut his walking time to his new school by 20 minutes each way! Hence the reason we don't want to wait to do the improvements.

Possibly I'm being a little shortsighted, but with the change in product and mortgage term, even with the additional lending, our monthly payment is greatly reduced. Meaning we can achieve all of our goals at once - get the home improvements we need, keep our savings cushion intact and free up income to use on the here and now, rather than wishing life away.

I hope that explains my plans.:)

another_login

Hi

I am in a similar position, wanting to remortgage but not sure of how my home will be valued. I paid for a hometrack analysis, which was encouraging, but haven't done anything concrete yet. I would ne interested to know how these banks deal with your valuation .So would be interested to know how it works out.

Best of luck.

Amy56

another_login wrote: »

Hi

I am in a similar position, wanting to remortgage but not sure of how my home will be valued. I paid for a hometrack analysis, which was encouraging, but haven't done anything concrete yet. I would ne interested to know how these banks deal with your valuation .So would be interested to know how it works out.

Best of luck.

I've decided to go with the First Direct remortgage, and can't get an interview until 26/3, but I will come back and let you know how I get on