Remortgage with equity release - 1 or 2 mortgages?

Klabautermann

Hi

Our fixed-rate term mortgage is coming to an end and we are about to remortgage and for the first time wanting to release since equity for an extension.

Going through a broker, but have not been terribly happy with them (very slow to reply to any questions, make a few mistakes in the applications etc).

We initially paid an application fee for the mortgage and then received the offer from the broker which was only the equity release rather than the whole mortgage. Called him and he apologised and promised to send through the whole offer. 

Now he sent through another offer for the "main" mortgage. However it looks like they are charging the application fee again for this one and the 2 mortgages also have different end dates.

Does this seem correct, or is there something the broker has messed up?    

I (maybe naively) assumed that the remortgage would just result in a single "new" mortgage with the additional borrowing included (rather than 2 with separate terms). This just seems rather complicated, although maybe standard practice.   

Thanks!

kingstreet

A remortgage is a new mortgage with a new lender to replace the old one and possibly borrow more.

Staying with current lender and changing product is a product transfer or rate switch. Borrowing more is additional borrowing or a further advance.

What exactly are you doing?

Have you received an offer, as in a formal mortgage offer letter or an illustration of a particular product?

Klabautermann

Thanks!

It's a formal offer (for both). And it's with the same lender that our current mortgage is with.

kingstreet

Ok. So you will have one mortgage, as that is the deed which takes security over the property.

You will have two sub-accounts which reflect different amounts of borrowing taken at different times. Only a remortgage to a new lender would (usually) result in a single loan account.

Klabautermann

Ok that makes sense then. Thank you!

Is it normal to pay the product fee twice and have different end dates on the sub-loans?

kingstreet

I suppose you could pay two product fees if you have to choose two products.

A product transfer and a further advance are two separate transactions. Which lender are we talking about as others may have experience?

Klabautermann

Sorry, should have said. HSBC.