Remortgaging advice

piggeh

My current 2 yr fixed mortgage ends mid Feb 2018 with Nationwide. As a FTB I took a 2 yr fixed as I only had a 5% deposit, so I am keen to remortgage with a slightly better LTV. I am also concerned though that interest rates may rise in the next couple of months, so I am keen to lock in a deal ASAP but avoiding any early repayment charge.

Nationwide advise on their website (I will check details for my deal specifically) that within the last 3 months of a deal, no ERC applies, so I am currently assuming that this means if I switched mortgages from any points after mid November I wont have to pay an ERC?

If I took a mortgage offer now, would they also do a valuation survey on the current value of the property, or would they make it subject to a survey nearer to the point of completion of any offer? Would I also work it out on the outstanding balance in mid November or would I give them current figures? Also are most remortgage deals valid for 3 months or are they usually shorter/longer?

To illustrate:

Current value approx £220,000 (6% price index rise since purchase)
Current outstanding balance £192,500 (according to online banking, not sure if this is recalculated on deal ending/terminating early?)
Difference: £27,500
Potential current LTV: 87.5%

Would they use this to calculate, or in 3 months it would be about £3k off the balance (my monthly payments are £959), so possibly could be under 85%?

I am trying to work out the best time to remortgage and a good plan of attack. Any advice appreciate, remortgaging seems to be as much of a minefield as a first mortgage!

Thrugelmir

piggeh wrote: »

Current value approx £220,000 (6% price index rise since purchase)

Is this the Nationwide's Index valuation.

piggeh

Thrugelmir wrote: »

Is this the Nationwide's Index valuation.

Yes. Based on that index.

I did also fit a new bathroom - do improvements get taken into account on a remortgage?

Toonsy

Your £959 payment won't fully come off the remaining balance as normally the first few years are pretty much paying interest so I doubt three payments would clear nigh on 3k off the balance.

There's no doubt a better way of doing it but find a statement, find out how much the monthly interest charge is then take that off your payment. The figure that is left is how much capital you're clearing each payment but I'll warn you now it's depressing reading haha. Its onky a rough guide but even I got to within £300 of the amount I needed to remortgage by using this theory.

piggeh

Toonsy wrote: »

Your £959 payment won't fully come off the remaining balance as normally the first few years are pretty much paying interest so I doubt three payments would clear nigh on 3k off the balance.

There's no doubt a better way of doing it but find a statement, find out how much the monthly interest charge is then take that off your payment. The figure that is left is how much capital you're clearing each payment but I'll warn you now it's depressing reading haha. Its onky a rough guide but even I got to within £300 of the amount I needed to remortgage by using this theory.

Thank you - you are right, probably only about £800 off the mortgage total in the next 3 months! So I guess I'll be around 85-90% LTV. Would they consider the balance of 3 months' time though or would they work it out on existing balances? I guess it doesnt make much odds. Probably the bigger question would be if they work it out on all existing values?

Toonsy

I've only remortgaged once (just about anyway) but I've read a lot about desktop valuations. I'm guessing if a valuation is carried out without a visit it's less likely to consider any refurb whereas as a personal visit might.

For my remortgage I had a house visit but it was basically to see if there's any serious issue structurally in person then they went away and did some digging on comparable prices to see if what I said it was worth was realistic, which it was.