Confused about remortgaging

makiz63

Our 2 year fixed deal is due to expire in August this year. My husband has been to see a mortgage adviser as we were thinking of remortgaging in August.

We bought the house for £165000 (on a 2 year fixed deal) we were first time buyers.
The monthly installment we pay now is £1055.00 for the mortgage

The mortgage advisor recommends the following:-

To remortgage now and pay a Mortgage penalty for £4000.00
The new monthly installments with another bank will be about £850.00 (this will be inclusive of the mortgage 165000 plus the penalty of £40000 which brings the total to £169000

Please can you advise of your thoughts. Many thanks

Biggie

Doesn't make sense I assume it will take about 2 months for your application to go through so the extra amount you pay up until August is :

£205 X 5 months = £1250

so why pay £4000 to remortgage.

Why not just wait until August to remortgage there is no way you will save 4k by going with another mortgage provider.

Also I assume you will also incurr some costs as well i.e (legal costs) which haven't been factored in.

Jorgan_2

I've just shown this to the mortgage adviser in work. His advice:

1) Don't do anything untill July.
2) Contact your existing lender to see what they have to offer you.
3) Don't go back to this adviser, he's thinking of himself, not his client.
4) Go and see a 'whole of market' adviser that is not going to charge you a broker fee. He/she will compare other lenders deals to what your existing lender can offer.

clutton_2

your broker is bonkers !!!

Biggie

Jorgan wrote: »

I've just shown this to the mortgage adviser in work. His advice:

1) Don't do anything untill July.
2) Contact your existing lender to see what they have to offer you.
3) Don't go back to this adviser, he's thinking of himself, not his client.
4) Go and see a 'whole of market' adviser that is not going to charge you a broker fee. He/she will compare other lenders deals to what your existing lender can offer.

I agree with this i'm no advisor.

Except I would start looking in June as it can take upto to 6 weeks to remortage if not more and you want to avoid going on to your lenders standard variable rate.

makiz63

Thanks for all your response. My husband's company are offering a deal (i think) with this broker as the 1% mortgage (broker) fee and legal fees are all being paid for.

dannyboycey

There's also a good chance that interest rates will be lower in August than they are now.

Jorgan_2

makiz63 wrote: »

Thanks for all your response. My husband's company are offering a deal (i think) with this broker as the 1% mortgage (broker) fee and legal fees are all being paid for.

You can find advisers that don't charge anyway, so I don't see it as an incentive. If you stay with your existing lender you wouldn't have to pay legal fees and a number of lenders will pay the legal fees for you,, so again I can't see this as an incentive to do anything now.