Re-Mortgage Offer - Am i getting a good rate ?

monkeyg1

Greetings Mortgage Guru's,
I present to you the various rate/terms i have been offered by my broker but wanted to post this to garner feedback from the wealth of people out there that are more experienced than me in these matters.

My scenario is this :-
I currently own 40% of my TVH Shared Ownership House and i'm looking to take out a new mortgage for the other 60% to then own 100% and the freehold. I then want to sell early next year and get a new property.

My current mortgage is an interest only one and is for £37,000.
The 60% staircase needed is £195,000
I want to borrow an extra £15,000 to do some home improvements prior to selling next year.

I have been told i need to effectively pay off the current £37,000 mortgage which means effectively adding this to the £195,000.

So, i'm looking to get a mortgage for £247,000.

The value of the property is £325,000

I have been given the below offers by my broker. In your view, are these ok, good, excellent ? These are via Nationwide. Doing to checks via the MSE Mortgage Tool there were some that came out slightly cheaper so do i go back to my broker and say he needs to improve his offer ? Need to get this right as i've only got one chance to seal it.

Property value £ 325,000

Current mortgage £ 37,000
Additional funds required £ 195,000 (60% 0f the £ 325,000 valuation) ; plus…
Home improvements £ 15,000

Total mortgage required £ 247,000


The maximum mortgage term is 23 years and the mortgage must be on a direct repayment basis.

You can choose from 2, 3, 5 or 10 year fixed rates ; there is a free valuation ; and you can either have free legal fees ; or appoint your own solicitor and get £ 250 towards the cost. As this is a fairly complex transaction, I would recommend the latter – I can refer you to a good solicitor if needs be.

So, you can choose from any of the following.

• Two year fixed rate – 1.99%
• Rate reverts to a standard variable rate of 3.99%
• Arrangement fee : £ 999, which can be added to the advance
• Valuation fee : Free
• Free legal fees ; or, use your own solicitor and receive a cashback of £ 250 towards the costs
• Early redemption penalty : 2% in the first year ; 1% in the second year
• Capital overpayments of 10% of the mortgage balance permitted annually without penalty

Monthly payment

£ 1,120.54

• Two year fixed rate – 2.39%
• Rate reverts to a standard variable rate of 3.99%
• Arrangement fee : None
• Valuation fee : Free
• Free legal fees ; or, use your own solicitor and receive a cashback of £ 250 towards the costs
• Early redemption penalty : 2% in the first year ; 1% in the second year
• Capital overpayments of 10% of the mortgage balance permitted annually without penalty

Monthly payment

£ 1,164.19

• Three year fixed rate – 2.39%
• Rate reverts to a standard variable rate of 3.99%
• Arrangement fee : £ 999, which can be added to the advance
• Valuation fee : Free
• Free legal fees ; or, use your own solicitor and receive a cashback of £ 250 towards the costs
• Early redemption penalty : 3% in the first year ; 2% in the second year ; 1% in the third year
• Capital overpayments of 10% of the mortgage balance permitted annually without penalty

Monthly payment

£ 1,168.90

• Three year fixed rate – 2.69%
• Rate reverts to a standard variable rate of 3.99%
• Arrangement fee : None
• Valuation fee : Free
• Free legal fees ; or, use your own solicitor and receive a cashback of £ 250 towards the costs
• Early redemption penalty : 3% in the first year ; 2% in the second year ; 1% in the third year
• Capital overpayments of 10% of the mortgage balance permitted annually without penalty

Monthly payment

£ 1,201.11

• Five year fixed rate – 2.84%
• Rate reverts to a standard variable rate of 3.99%
• Arrangement fee : £ 999, which can be added to the advance
• Valuation fee : Free
• Free legal fees ; or, use your own solicitor and receive a cashback of £ 250 towards the costs
• Early redemption penalty : 5% in the first year ; 4% in the second year ; 3% in the third year ; 2% in the fourth year ; 1% in the fifth year
• Capital overpayments of 10% of the mortgage balance permitted annually without penalty

Monthly payment

£ 1,224.76

• Five year fixed rate – 3.04%
• Rate reverts to a standard variable rate of 3.99%
• Arrangement fee : None
• Valuation fee : Free
• Free legal fees ; or, use your own solicitor and receive a cashback of £ 250 towards the costs
• Early redemption penalty : 5% in the first year ; 4% in the second year ; 3% in the third year ; 2% in the fourth year ; 1% in the fifth year
• Capital overpayments of 10% of the mortgage balance permitted annually without penalty

Monthly payment

£ 1,245.05

• Ten year fixed rate – 3.24%
• Rate reverts to a standard variable rate of 3.99%
• Arrangement fee : £ 999, which can be added to the advance
• Valuation fee : Free
• Free legal fees ; or, use your own solicitor and receive a cashback of £ 250 towards the costs
• Early redemption penalty : 7% in years 1-4 ; 6% in the fifth year ; 5% in the sixth year ; 4% in the seventh year ; 3% in the eighth year ; 2% in year 9 ; and 1% in year 10
• Capital overpayments of 10% of the mortgage balance permitted annually without penalty

Monthly payment

£ 1,275.71

• Ten year fixed rate – 3.34%
• Rate reverts to a standard variable rate of 3.99%
• Arrangement fee : None
• Valuation fee : Free
• Free legal fees ; or, use your own solicitor and receive a cashback of £ 250 towards the costs
• Early redemption penalty : 7% in years 1-4 ; 6% in the fifth year ; 5% in the sixth year ; 4% in the seventh year ; 3% in the eighth year ; 2% in year 9 ; and 1% in year 10
• Capital overpayments of 10% of the mortgage balance permitted annually without penalty

Monthly payment

£ 1,283.44

Where there is a lender arrangement fee, I have assumed that you will add it to the advance and the monthly payments have been calculated accordingly.

Now, i can afford all of the above offers, but which one would be best bearing in mind i want to move in the next 6 months, so conscious about 'porting' the mortgage across and fees around that process or if i can port then just go for the 10 year offer ? Views most welcome here.

Also Mortgage Protection, never had it before. And i know we can't predict the future but another £40 a month !

Anyway, sorry for the length of the post but if any of you guru's out there can offer any titbits of common sense, experience, guidance; i would be most grateful.

Regards,
Monkeyg

betmunch

It's not just about rate, its about who will accept you. I didn't even read the rates you detailed.

If you are unsure about what's been recommended send details of the one you think is best to the broker and ask why it's not been recommended to you.

Also, to me it looks like he's only done half a job, you don't give 8 options and ask a client to choose, we're not order takers

A full fact find and discussion about product specifics should be done leading to a single product recommendation.

betmunch

Oh, just seen the bit about mortgage protection.

Find out what exactly you are protected against and think is that worth it to me? If not don't have it, but don't complain when you need it and its not there.

If it is worth it take it and be glad when Murphy's Law dictates that you never need to claim on it!!!

kingstreet

Off the top of my head, Nationwide has a two year penalty-free tracker product available for remortgages which is lower than the lowest of those options.

1.94% with fee, 2.34% without.

It would remove any anxiety over inability to port when you move as you could remain with Nationwide, choosing any of its current deals, or take a whole new mortgage elsewhere.

Also, if you could put £3,250 in the pot perhaps from savings, the mortgage £243,750 would then be 75% of £325,000 triggering better products. Perhaps of less value due to the short-term nature of the proposition.

Rates now 1.54% with a fee, 1.94% without.

Thrugelmir

Why are proposing to spend £15k on a property that you selling next year? Unlikely that this money will be recouped.

monkeyg1

Thanks to all that replied. I have already been accepted in principle by the Nationwide but becuase i want to move again next year i'm worried about costs of porting to a new mortgage when i do. So unsure about whether to choose say the 2 year option or would the fee's be higher if i choose the 10 year now. In terms of spending money on the house, i have been in it 17 years and lets just say it needs a new bathroom and kitchen to make the property sellable. I know i can add what i spend onto the house next year when i come to sell it.