Advice wanted regarding renewal of Mortgages

Hannah_Lam

Hi

I would be most grateful for some advice regarding mortgages. I currently have an fixed rate mortgage with YBS which is due to expire at the end of Dec 07. I've recently moved up the property ladder the additional borrowing was borrowed from YBS too as their rates at the time were very competitive. However from looking at their current products it seems that they have removed their standard £800 arrangement fee and mixed it with the fee free assistance products whereby the fixed rates are higher or those that are not fees free, the arrangement fee is 2% of the loan with a slightly lower rate. I am at a loss on what to do as I don't know whether I can use a different lender if one part of my mortgage is with YBS which doesn't expired until 2010.

If I have to stay with YBS is there anyway they can waiver or reduce the 2% charge ? My current mortgage outstanding is £178k. Lastly am I able to change home/content/mortgage protection insurance at any time ?

Many thanks for reading, any advice will be greatly appreciated !!


Hannah :T

cheekeemonkey

Hannah

I looked at YBS yesterday as we are hoping to be moving house soon. They have a pretty competitive 5 year fixed at: -

5.94% Offset fixed until 28/02/13

£795 fee (this seems reasonable - a lot are £995++)

In addition, this mortgage can be offset against any savings(!) we might have.

worth a look...

MortgagesInc

Normally they wouldn't waive any redemption penalties on the second part of your mortgage - unfortunately this isn't one of the things most lenders advise you when you take out an additional loan, as it means they've got you locked in one way another for many years!!

With regard to your insurances, along as they weren't compulsory then you should be able to move them, but be warned that they will probably charge you £25 per year for taking a policy out elsewhere

Hannah_Lam

Thank you for your advices, I'm not 100% about the Offset Account although it does look very attractive. Their fixed products are very expensive esp the ones with the fee assistance. Still undecided whether to get a fee assistance mortgage or get the non fee assistance and pay the extortinate product fee.

Lipstick_2

Hi Hannah, try the Woolwich, they have a very competitive 5 year fixed rate at the moment and 0.25% difference on a £178k mortgage can mean a £445 saving per year.

Hannah_Lam

Thank you for your advice Lipstick, since last night I've relooked at YBS website again for their fixed rate products those that are under 6% are only for existing borrowers moving home, or remortaging from a different lender and ftbs. From speaking to their customer service it seems that for customers like myself who is renewing our mortgage we are stuck with their limited product range, current fixed rate is 6.39% fixing for 3,4,6 yrs. Which I do not think is competitve or value for money at all. I am really tempted to go another lender for this part of the mortgage but I don't know if I am able to, has anyone had this experience before ?.

herbiesjp

In theory you can go to another lender, but it will not be high street lenders, and they will not be high street rates.

Unfortunately, due to the two different expiry dates, you will have one of three options:

1) Pay penalty and leave YBS
2) Stay with YBS and choose another fixed rate deal (as you mention)
3) Stay with YBS and choose a deal with no Early Repayment Charges (may have to be a tracker/variable rate of some sort)

If you take option 3, it means that come 2010, you can then re-assess your situation. However at that point you will be in a position to either take another YBS product or leave without penalty (as the fixed rate will have expired and the deal you chose now will have no penalties anyway)

How does that sound?

Woody69_2

You can't move just part of your mortgage to a new lender so will have to pay the penalty and move or stay. You need to work out how much you would save by moving and see if this would cover the penalty. If you do stay choose a product that will end in 2010 if you can, I guess the 3 year will be the closest, so you can then have the freedom to move if you wish

Woody69_2

They have some deals just for existing customers that might suit, 5.99% fixed until 02/09 then 6.79% till 02/10 no fee, or 6.19 discount rate for 2 years

Hannah_Lam

Thanks Woody& Herbiesjp for your advice I think for the time I'm going to wait for November's bank of england decision on interest rate to see whether the rate will remain static or drop (wishful thinking). But I guess I have no alternatives as I only fixed the additional amount in June 07 but to stay with them either choosing another fixed rate product or go on standard variable until a better products comes up. Just watched the news and its even more depressing as house prices have fallen for the 2nd month !!