Natwest HLC? Help Please

dunnc64_2

Hi Everyone

I could do with some help if possible.

My mortgage deal with Natwest is coming to an end and I would like to stay with them, mainly because myself and my girlfriend have both started new jobs and they do not require me to prove my income. I am interested in their 10 year fix rate remortgage at 5.85%, it says you can borrow up 95% LTV on the website with a free valuation and a mortgage arrangement fee of £899

No here my problem begins. I went into my local branch to get this sorted. My outstanding balance on my mortgage is £122,500 and I would like to borrow an extra £19000 to clear a loan that I have, also with natwest. I estimate my property to be valued at approx £155,000, my LTV is under 95% based on what I would like to borrow (£141,500)

Natwest advised that because I am an existing customer, and that I would like to borrow over 90% LTV, that there is a Higher Lending Charge of £1600!! And I would also have to pay the valuation which is £250. To be honest I did not have too much faith in the lady on the phone, as she advised that I am not taking out a remortgage and that I "just reviewing my rate".

I would like to stay with natwest but it will cost me approx £2750 to stay with them.

Can anybody please help or justify these costs. Thanks in advanced

Kind Regards

Dunnc64

MarkyMarkD

dunnc64 wrote: »

To be honest I did not have too much faith in the lady on the phone, as she advised that I am not taking out a remortgage and that I "just reviewing my rate".

I should have more faith in your adviser and less in yourself. You are not seeking to remortgage - you already have a mortgage on this property with this lender, and therefore all you are seeking to do is to change mortgage product and/or borrow some additional funds. Remortgaging means changing lender.

I am interested in their 10 year fix rate remortgage at 5.85%, it says you can borrow up 95% LTV on the website with a free valuation and a mortgage arrangement fee of £899

No here my problem begins. I went into my local branch to get this sorted. My outstanding balance on my mortgage is £122,500 and I would like to borrow an extra £19000 to clear a loan that I have, also with natwest. I estimate my property to be valued at approx £155,000, my LTV is under 95% based on what I would like to borrow (£141,500)

Natwest advised that because I am an existing customer, and that I would like to borrow over 90% LTV, that there is a Higher Lending Charge of £1600!! And I would also have to pay the valuation which is £250.

It doesn't say on their website that the product you are quoting is exempt from HLC. You are wrong to assume that it is - because it isn't.

Secondly, there's no reason why they are required to give an existing borrower the same deal as a new one - as indeed they are not.

I would like to stay with natwest but it will cost me approx £2750 to stay with them.

Can anybody please help or justify these costs.

It won't cost you £2,750 to "stay with NatWest". It will cost you £2,750 to take a further advance, and to increase your LTV, and to switch to a cheaper product.

As I said earlier, NatWest don't have to justify their costs. They are offering you a choice, and it's up to you whether to take it or decline it.

As for help:

- you could borrow less from NatWest, such that you don't increase your LTV above 90%, and thereby avoid the HLC and save £1,600.
- you could remortage to a different lender and possibly avoid an HLC entirely, but the lenders who don't charge HLC are not necessarily the cheapest overall.

For example, Nationwide make a lot of fuss about not charging HLC. But their 10 year fixed rate for 95% LTV borrowers is 6.38% with a £499 fee.

Whilst you'll save around £2,200 up front (assuming your £2,700 is correct) you will be paying 0.53% extra on your mortgage rate for the next 10 years, which is a huge amount of money - £750 in the first year, and slightly less in subsequent years if you are on a repayment basis.

Overall, when you look at the total cost, the NatWest deal is not so bad: you'll have recovered your £2,200 in less than 4 years compared to switching to Nationwide, for example.

I am sure there are other deals out there cheaper than the Nationwide one, but you may end up paying legal and valuation fees on those.

herbiesjp

MarkyMarkD is spot on

However are you sure you can still get the rate you wanted above - is it available to exisiting borrowers os is it a re-mortgage deal available to people moving their mortgage to NatWest?

What are your two incomes?

Do you have any other debts?

Be careful, as not all lenders will re-mortgage to 95% for debt consolidation - and looking for a lender with no HLC will further limit your options

Having just changed jobs does not necessarily mean you will have problems in getting a mortgage, as more and more lenders start to realise that working patterns having changed considerably in recent times.

dunnc64_2

Hi Guys

Thanks for the advice. I think I may stay with Natwest afterall. They are offering me the 5.85 rate. I earn £30,000 and my girlfriend earns £13,000. We have the £19 k loan with Natwest and about £4k on an interest free car loan.

Regards

Dunnc64

Dan_Collins_2

First Active may help you, it will be a remortgage but the HLC may be less. They are part of the same group and I believe the person you talk to can help on both.