remortgage

tkaakk

found website really helpful and decided to add my own dilemma- any help appreciated.

deal coming to an end on together mortgage with NR next month and looking to move lender. balance of 165k on house worth 170k. good credit history. joint mortgage with husband. I earn about 34000 pa and he earns 35000 and we could pay in about 7000 towards the mortgage. trouble is i'm on maternity so on smp at the moment and due to return to work full time in april while husband just started a new job a week ago from a previous full time job to another.

please suggest - northern rock have offered new deal but just way too expensive at 5.99% but with an upfront fee of 3.5% of the loan.

dunstonh

That is just one of the two dozen or so deals that NR have to offer. Their deals arent the best right now but that is not the only one available to you. There are about two dozen available to you. I dont think you would be happy with any of them though.

Why are you looking at 2 year fixed? Its inefficient to keep doing 2 year fixes. As the focus moves to lower interest rates and the profit to the lender switching to a higher fee instead, this encourages longer fixed rates. Otherwise you just keep paying fees every 2 years which wipes out a lot of the benefit of doing the deal.

You also need to be aware that you dont have much equity in your property so most of the deals you are going to get are not going to be the best (with 97% LTV). Clearing 7k off the mortgage in the process would certainly help and improve things and give you a greater choice of lenders (it would bring those that do up-to 95% LTV in to play).

MortgageMamma

the figure you have given as the outstanding amount on your mortgage - is that including or excluding the NR unsecured loan which you took when you bought the property? if its including then the figures can be reworked. If its excluding and you intend to keep the unsecured loan going and move the mortgage portion seperately then you need to be aware that the unsecured loan rate will jump to about 16-18% if you leave northern rock.

MM

tkaakk

thanks for the reply. 165 is the total owing i.e including unsecured part. never considered just moving the secured part of the loan. just considering all possible alternatives.

MortgageMamma

well it is possible and you would probably get a lower rate if you had a lower loan to value - but remember the cost of the unsecured will go up, NR are not competitive at all at the moment and their future is in jeapordy, I wouldnt advise sticking with them