Is now the right time to re-mortgage

simpson_77

Hi All,

My Mortgage expires in October, but I have been told I can lock in a new deal from mid July.

I'm currently on a 3.39% fixed and was looking at staying with Natwest and moving to the 1.64% tracker or 1.74% fixed. My LTV is 59%

Given the uncertain times and the expectation of a rate cut am I better off waiting before I commit in case the rates or down or should I lock in in case the banks start to restrict lending.

Staying with Natwest as have 2 defaults (£600 and £16 from Jan 2011 both settled immediately) and I would prefer not to go through the hassle and stress of moving providers unless the saving was compelling.

Thrugelmir

How much better can the rates get? Lenders have to make a margin.

moving to the 1.64% tracker or 1.74% fixed.

frazell

Its a crystal ball job really.


My personal opinion is that it would be prudent to wait to see what happens with the interest rate in the next few weeks to see if its cut. If it is then we might see some good deals coming on to the mortgage market.


HSBC's 2 year fix at 0.99% looks interesting (albeit fees are high) and they only announced it in the last few weeks, presumably in response to a predicted cut in rate.


Might be other providers that bring their deals in line in the next few months (or even better!).


If you're not borrowing a huge amount then the real world difference in monthly payments might not be that much between 0.99% fix and the 1.74% fix you've been offered, especially when you factor in the fee.


I find this a useful tool in evaluating offers;


http://www.moneysavingexpert.com/mortgages/compare-fixed-rate-mortgages

simpson_77

thanks, i will be borrowing £263k I have tried calling my broker a few times but he hasn't come back to me, so did my own research on what else is available and there are some cheap deals out there, but its difficult to know what you will be accepted for + 50%+ of my income is bonuses!

I think it may be worth waiting at least a few more weeks to see what happens.

Thrugelmir

frazell wrote: »

If you're not borrowing a huge amount then the real world difference in monthly payments might not be that much between 0.99% fix and the 1.74% fix you've been offered, especially when you factor in the fee.

Then there's the other costs of remortgaging to consider as well. Exit fee for current mortgage, legal and valuation fees.

frazell

Thrugelmir wrote: »

Then there's the other costs of remortgaging to consider as well. Exit fee for current mortgage, legal and valuation fees.

Yes, true enough.


You need to factor in ALL associated fees to give you a clear comparison. The MSE tool that I posted goes some way to address the fees but you need to understand all the costs that would be imposed on you.

cahillg81

Should be fine on the defaults with most lenders.


HSBC <1% is only up to 65% LTV and you need to be squeaky clean, I'm hearing from friends who are on their panel that the criteria is super strict and it's under 40% of apps getting through.

frazell

cahillg81 wrote: »

HSBC <1% is only up to 65% LTV and you need to be squeaky clean, I'm hearing from friends who are on their panel that the criteria is super strict and it's under 40% of apps getting through.

I wasn't suggesting that this was a good mortgage BTW, just a demonstration as to what (on the face of it) looks like an interesting product.


The OP would qualify based on the LTV stated, but as you say HSBC are obviously making it difficult to attain such a product and given the history its not a suitable avenue to take.

simpson_77

The HSBC product was a very low rate, given the low acceptance level I would prefer to try when I re-mortgage in 2018 rather then now.

For me the pro's of staying with Natwest: No credit checks, they know all my banking history and we have a good relationship. ability to remortgage should be a given. Cons: not the best rate?

Pro's of moving away: gain a better rate, start a relationship with a new bank (could be useful in the future). cons: Credit checks (which will come back fine except the 2xdefaults in Jan 2011), loan to income calc, application process and related fees.

simpson_77

One other point, If I make an application and get refused are my details kept on file for say 2 years?

Reason I ask is I would prefer to apply to the full market in 2 years with a squeaky clean history and only settled debt on my file, as opposed to apply now them seeing the defaults and £37k in unsecured and using it against me in the future? If all that makes sense?:)

Thrugelmir

simpson_77 wrote: »

The HSBC product was a very low rate, given the low acceptance level I would prefer to try when I re-mortgage in 2018 rather then now.

HSBC's target market is normally a minimum of £50k sole income or £75k joint. High fees is to attract fewer applications for larger amounts. Funds available are finite. There's a clear business strategy behind their products.