Straw poll of mortgage advisors please? :)

ajaxgeezer

Should I take it or leave it?

Our Abbey 2yr discount finishes in August and will leave £108k owing on an LTV of 83.2% (best guess). Combined income of £54k + bonuses + OT.

Credit history: I have a late payment (4 months late) on a £150 credit account which was settled 4 years ago, otherwise we're fine.

I can only see lending rates going up so phoned today and was offered this:
5 yr fix at 5.99%
no obligatory up front fees
£524 fees can be added, which would suit us better

I want the 5yr fix in order to insure against the seemingly inevitable slide on prices. Being here again in 2 years time with an LTV of 95% does not appeal!

So.... deal or no deal?

(my head says deal but I'm not the expert - you guys are )

_Andy_

Depends what's most important to you - i.e. lowest monthly payments or lowest total cost over the fixed term.

minimike2

Doesnt sound bad to me, dont think you would get any better elsewhere without paying a massive arrangement fee.

I vote Deal.

Dan_Collins_2

Take it before it goes!

ajaxgeezer

Andy: We're not really interested in incentives, but by the same token we'd choose slightly higher monthly repayments over high up-front fees.

The convenience of the same lender is something of a factor too.

Dan: They say they'll hold it for 14 days. If the KFI goes out to me, is that binding?

jill2002

If the KFI goes out to you they are probably expecting you to sign and send it back - as opposed to using the fast-track system. The fast track is easier and quicker, but obviously it depends when your deal ends as, when you sign and send it back, it will then take a few days to put it on your account (if your deal has already finished) which could mean you are on the standard rate for a few extra days.

But this way, yes, the deal will be held. If you do not sign & send it back, they will assume you have decided to go elsewhere and the deal will be lost.

ajaxgeezer

Jill: It doesn't end until August, but it looks like snoozing is losing on both rates and valuations so I'm getting in early. Abbey say that as long as they get it back in two weeks then they can just set it to begin when the current tracker discount ends in August.

jill2002

Accept it - sign it and send it back. Make sure you add the fee and if something better comes along in the mean time (be that with Abbey or another lender) you can still go for it.

ajaxgeezer

jill2002 wrote: »

Accept it - sign it and send it back. Make sure you add the fee and if something better comes along in the mean time (be that with Abbey or another lender) you can still go for it.

......really??? Acceptance now isn't binding?

We'd add the fees to the loan as it's only £3 difference per month so none to send back.

Sorry if it's a dumb question, but how does the MEAF of the current mortgage get paid? Is it up front now or paid at the time of the switch in August?

jill2002

They will send you a form so that you can pay it now, or you can choose to pay it when you close the mortgage either in a few years when you move or remortgage or when your mortgage finishes in xx years time. Remember that the fee will stay at £225, so if you pay it now, that is a lot of money, if you pay it in xx years time it won't be worth as much - maybe the same price as a loaf of bread :rotfl:

jill2002

......really??? Acceptance now isn't binding?

I've never tried it, but, if a better deal comes along from Abbey, call them and ask for a new deal - you can always try.

Thinking about this logically - it can't be done - if you remortgage elsewhere, the completion date will either be when your existing deal is still on your mortgage - therefore penalty to be paid OR if it's after - even on the same day as the deal gets put onto your account - they will charge you the penalty for that deal. So you're right - it is binding, but you do have 14 days to cool off. Sorry to mislead you.