Will we be able to get our mortgage changed, if so what one?

groove_timer

Hi,

Im looking for some information regarding applying for a new mortgage. We currently have a mortgage for £85000, I had a good deposit after selling my 1st flat. I believe our flat is worth between £120,000 - £140,000. We are expecting our 1st child so I want to get a bigger place and was wondering will we be allowed to apply for a new mortgage with my wife going off on maternity leave in the next 2months?
My salary is £22000 and my wife is £31000. Were currently in a fixed term till Jan 2009. I've been online to the list that Martin recommends but getting very confused with all the different products. If anyone can recommend what we can do and what might be the best mortgage to take out, it would be greatly appreciated.

MarkyMarkD

You're tied in with your existing mortgage. So unless you are going to delay moving until January, you are pretty likely to be best served by staying with your existing lender or you'll probably incur an ERC of around £2,500 or more.

You need to check what your ERC terms are; and if you are indeed tied in, see what products your existing lender offers for the "top up" part of the new mortgage you'll need. Then the existing fixed rate will apply to the rest, until Jan 2009.

It's worth trying to get the end dates synchronised or you'll constantly have part of the mortgage tied in and part of it not. That probably means looking for a product with no ties for the top-up.

Tell us your existing lender, existing ERC terms, existing rate, and we'll be better able to advise.

groove_timer

Hi MarkyMarkD,

Thanks for the reply here's the info you asked for:

Existing Lender: Lloyds TSB

Existing ERC Terms:
1/3/07 - 29/2/08 = £1,766 (2% of amount repaid)
1/3/08 - 28/02/09 = £820 (1% of amount repaid)

Existing rate 4.89% fixed until 28th Feb 2009

MarkyMarkD

Well, for starters, a 4.89% rate is very good given the way that rates have increased recently.

You would be lucky to get a rate less than 1% higher than that at the moment.

So you really should be looking to keep your existing rate and "port" it to the new property.

I'd ask LTSB what product they will give you on the extra £40k or so that you need and whether you can definitely port your existing amount.

groove_timer

Hi Marky,

Thanks for the info. i was thinking we had a good rate just now. i'll see LTSB and hopefully will be able to port it as you say. Thanks again