First time mortgage renewal

edited 29 November 2016 at 11:42PM in Mortgages & endowments
5 replies 1.3K views
catoutthebagcatoutthebag PPR
2.2K Posts
edited 29 November 2016 at 11:42PM in Mortgages & endowments
Hi I bought my flat April 2015 for 88.5. put down 10%. Rate was fixed 2 years at 3.3% (or thereabouts, need to double check). Monthly payments £396 with nationwide. I haven't overpaid, so as well at the 8850 deposit, and growth in value,ill have 3-5k as a result of equity from repayments.

Properties in area selling for 105-110k now.

When do I look for renewals?

How do I go about it?

I'm guessing the idea is to get the lowest valuation to get the best ltv ?

Fixed or variable? Though I see myself here, I'm quite transient and I'm monitoring a couple of personal issues over the next year or two which may force me to move...so need to be portable again, plus lowest early redemption penalities etc. If fixed, then for a short time again. With variable mortgages are you contracted to set terms like 2 years as with fixed rate deals?

I basically don't know the first thing about renewing. Will there be more product fees etc?

Replies

  • Just to add, Im self employed, income remained steady and i can obtain a tax certificate from HMRC.


    To potentially throw a spanner in the works, I've seen a potential property a mile away valued at 136000 that I'm tempted to check...
  • edited 30 November 2016 at 8:05AM
    AnotherJoeAnotherJoe Forumite
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    edited 30 November 2016 at 8:05AM
    Highest valuation, not lowest. The lower the valuation the higher the loan to value.

    But you can't really affect that. Either the lender uses some general ratio of house price inflation in your area, or will arrange a valuation which youll have to pay for . but there have been cases valuations have come up with a lower valuation than the general rate of inflation in your area and you can't choose which one to pick, they will then use the valuation.

    As for which length term, seems for you a shorter term is better,, but even 2 years might be an issue if you are looking to move, so make sure you get a mortgage whose terms are portable otherwise the early repayment charge will negate any savings you make.

    Other things like valuation fees , fees for the mortgage are very variable, you'll have to do the maths for the trade off of higher fees but lower rates against no or lower fees but higher rates.

    Ps usually once you are on variable rate there is no fee to pay if you move to another provider but you'll have to check. And lastly, if you move to a renewal product with your current lender there is often no checks on affordabilty or fees and much less paperwork.. but it does differ between lenders.
  • Thank you.

    I did a rough check...my £400 per month may be slashed to about £300 Given rise in value, ...is it better to get booked into a product now or in April when my renewal is due?

    I'm looking at fixed 2 years ..will brexIT cause rates to rise?
  • edited 6 December 2016 at 4:46PM
    kirtsypooskirtsypoos Forumite
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    edited 6 December 2016 at 4:46PM

    I'm looking at fixed 2 years ..will brexIT cause rates to rise?

    No one can 100% predict whether rates will rise, but as :money: says himself, they are historically low and can't go much lower so it's a good time to lock in a decent rate :)
    :j PAID VERY, Barclaycard x3, Vanquis, Natwest, O/D, Tesco & MBNA x2 PAID :j LBM 24/07/15 - Original Debt: £0/31010.23 (100% paid) :eek:
    Mortgage - £151.316.54 :eek:
  • By the way, given what I've said, what the heck do I put into comparison sites? Do I ring nationwide to get a value off them?

    I'll put 105 as property value, but what about amount to borrow?
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