Help !! Remortgaging tomorrow...

maggiemayhem

Hi folks - looking for urgent advice – I'm new to all this and the more I read in this forum the more I realise I don't know and advice here is invaluable.


Here in brief is the situation -


Have to remortguge on 1st April - have mortgage with local building society


Our Current Situation :
LTV : 70%
Gross Home Pay is 37000
Mortgage Loan is 80000
we are couple no dependants


Offers on table for remortgaging with current society are as follows:

Current SVR is 7.29

Fixed – 5.69%- 2or3or5 years -All in fee £399 – Early Repayment Charge(ERC) – 3% (OF BAL)
Tracker - 5.54% (BOE+.34 for 2 years) - all in fee £165 - ERC 2% Y1, 1% Y2
Discount – 1.75% below SVR for 2 Years all in fee £165 - ERC 2% Y1, 1% Y2
Discount – 1.5% below SVR for 2 Years NO FEE - ERC 2% Y1, 1% Y2


Tracker increase/decrease within 30 days of any increase/decrease of BOE base rate
There is no tie in over product deal and can reduce balance by 10% per anum without repayment charge. (Noticed in their details on website 'we reserve the right to withdraw /amendthis mortguage at any time' )


They expect some of their rates to go up very soon (esp Tracker) so if going with them basically must decide tomorrow

Any advice would be greatly appreciated

drrobert

I'm not an expert so make your own decision etc etc. But:

You have a nice low LTV and you aren't trying to borrow too much. I'd go for the 2-year tracker rate. BOE rates are likely to fall in the next couple of years due to the recession (conversely, SVR rates could rise as banks/building societies increase their margins). Although mortgage lending may be more restricted when you need to remortgage in April 2010, you should be a 'good risk' for the banks so you should be able to get credit (as long as you've a clean credit rating).

Overpay on your mortgage if you can and try to reduce your debt further.

sant_3

why are you sticking with your current lender? You might get a better deal if you shop around. I would get an independant financial advisor to do the leg work if I were you.

allan673

i agree with sant, youve got to shop around, get a broker or do some homework.
the rates you mention dont look very competitive in my opinion.
first direct do a 5 year fix at 5.29% with a £598 fee
post office do a 3 year fix at 5.34% with a £399 fee.
look around and save some cash !!!!!!

p.s why do you have to do it tomorrow? is that when the appointment is?
dont rush into it with the current lender.

sant_3

Maggie - See below for some links that may help you get a better deal.

www.unbiased.co.uk/fa/financial-advisor.asp (this site will help you find a local independant financial advisor).

www.threeuptwodown.com (internet based, however they will give you 50% of their commission as cashback)

Or if you know somebody that could recomend an independant financial advisor that might be the way to go.

Hope this helps.

SouthCoast

I would be very suprised if you could get a new mortgage lender in place by 1st April.

More info here:


http://www.moneymadeclear.fsa.gov.uk/campaigns/mortgages.html

maggiemayhem

Thanks for your replies - I will check them all out. Any other advice or thoughts would also be most welcome.

The reason there is 'urgency' on this is (please correct me if my logic is wrong):
1. The mortgage loan is up at the end of March after this I will go on to the SVR - which is 7.29 + Looking at the forums I had thought that there was a sizable time gap between applying and being accepted - (first direct for example)- so I would end up on the SVR for at least one month
2. As the mortgage is small (80000) I want to keep fees as small as possible (for the tracker it was £169)
3. The tracker rate given by my building society (+.34) looked ok to me in this present climate (and is set to go up this very soon )

Henwen

Hi

Sneaky trick when you realise too late that you need a new mortgage:

Switch to a better deal with your current lender with a much better rate than the SVR, a low arrangement fee and no penalties for leaving early. Trackers can be good for this as they have few catches but check its a tracker not a discount - read the small print.

Meanwhile, find a broker and ask them to find the best other deal for you - fixed or whatever. Brokers are usually paid by commission and can do really good deals. Plus they do all the hard work for you.

Either sign up for the new deal and then switch lenders or tell your existing lender you've had a better offer and see if they will match it to avoid losing you.

Don't expect remortgaging to be quick in today's climate. Even with good figures the banks' staff are all over-stretched. Scottish Widows don't know their proverbial from their elbow. They took 4 months to issue an offer letter although I wanted it done in 6 weeks. Co-Op have been fab for 4 years but are swamped and very poor at the moment. I have consent in principle and still can't get it sorted out. Grrr

Henwen

IDN101

I agree with Henwen.

I'm in the same boat, except mine runs out at end of April. Current lender has even offered (if I'm thinking of leaving them) to put me onto a tracker (NO fee) at that time- to keep the payments down. I would rather pay an extra £80 or so for one month while allowing a MUCH better deal to go through with a new lender.

I know it's tempting to get something sorted asap, but don't rushi into anything. Do the FIGURES. If you find a better deal at 0.5% (say) better than your current lender is offering- the saving over the 2-3-5 (etc) fixed period will more than pay for the higher payment in April.

Regards,
Ian