The masterplan : )

incesticde

Hi Folks,

Currently getting things sorted so I can move to a new house , this is the second time i've bought a house and the first time I've had to sell one

I am currently with Nationwide and have a 10 year fix with them which has 7 years left, mortgage repayment year ends/restarts in week.

The plan is this :

1. Pay Overpayment to max allowed (minus what I've done already this year)
2. Wait a week and pay the whole years overpayment for the new year, all this to minimise the ERC that nationwide will charge me
3. Get a DIP from Nationwide and use that to secure house I want via estate agents (should hopefully be quick and painless, I have a current account, lots of savings accounts with nationwide and they can see I've been overpaying my mortgage by £500 a month for two and a bit years)
4. Start the ball rolling with a First Direct mortgage application as they are a tad cheaper
5. If first direct come through then cancel Nationwide application

is having two mortgage applications on the go a bad idea?

amnblog

So the plan is to drop the remaining 7 year fixed rate and pay an enormous early redemption penalty of 5 or perhaps 7%?

TamsinC

can you not port your mortgage - no need to pay an arc then?

sheepy21

I'd look at porting the mortgage, should save hassle and you won't be clobbered by nationwide for leaving

incesticde

Thanks for the replies so far.

Re not porting : If i pay the existing mortgage off and get a new one, it keeps the monthly repayments to less than £800, which is an amount that I would be able to pay quite comfortably with at least £300 per month O/P . If i ported and got a new mortgage the monthly shoots up to £1200 (limiting the mortgage term to 20 years), which is an amount that normally I would be able to pay but leaves me with no slack in my budget should anything go wrong (we have always used my wages to pay all the bills leaving the missus's wages to cover hols, cars etc).

Yes the 7% erc is a bit of a killer, but luckily the mortgage is only £40,000, and the new mortgage is over 1% lower interest rate so that saving negates some of the cost of the ERC

If i've missed something with my logic here please let me know : )