Remortgaging - Halifax or Nationwide

BoltonMinx

Hi

I'm posting this on behalf of my colleague while he waits for his account to be activated, so please be gentle!

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Having read that the fixed rates may soon go up, thought this might be a good time to remortgage from the Halifax SVR to a 2 yr fixed rate with Halifax or Nationwide (YBS another alternative). Also to get a variable rate secured loan at a cheaper rate.

Halifax quoting 5.45% fixed for 2 yrs on current mortgage with £199 fee. They wont quote for £90000 as they advise to go through to addtl lending dept first, which won't quote till they do a credit check and can't gaurantee I wont be charged £199 for that then £199 to go fixed. Even then, they may not offer a suitable rate.

Nationwide are charging £99,free legals and free valuation if you dont want to hold the rate - if you do its just under £500 I beleive at 4.75% - though I understand I may not get this!

My main worry is going through the Halifax, having the credit check, then having a problem getting Nationwide if their rate proves pants. Was planning to go into Nationwide branch at the weekend with all the papers to sort out something with them. Any advice ? Or should I stick with Halifax as they are my current lenders and may not require a valuation ? Hoping this move will save me paying out almost £800 per month, so keen to get it right

---- Addtl Info ----
House value roughly £104,000 - £110,000 based on recent sales in current area, ex-council though so that usually brings it down by about £10k.

Current mortgage £57,000 approx SVR (5.75% ?) and outstanding secured loan £33,500 approx 14% apr variable currently awaiting a settlement figure. Other outstanding credit cards on 0% apr £9000 approx. Salary £29000 excl bonuses which come to about £1200 - £2400 per yr.

All bills have been moved to cheapest provider and cut to the bone to try and get out of debt quickly.

MarkyMarkD

For your colleague:

I can't see any reason to stay with Halifax given the sort of rate differential you are talking about. Halifax never offer decent deals to existing customers, which is another reason to move away from them. You are going to get credit scored by Halifax for a further loan, so no more or less likely to get accepted than by Nationwide for the entire remortgage IMHO. You aren't looking for an excessive income multiple in any case, as long as you clear the other loans (which would probably be a condition of the mortgage offer).

If you are borrowing £90k or so, it is NOT worth going for fee free deals. You will save more by paying the fees.

I don't understand what you mean when you say "if Nationwide's rate proves pants". You know the rate you are applying for when you apply. And given the way things are going, you don't want to delay in applying IMHO.

I'm not sure why you've restricted your choice of alternative lenders to Nationwide, either. If you look at http://www.moneyfacts.co.uk/mortgages/charts/mortgages_fixed_noext.htm the best buy 2 year fixed rates are around 4.2% (West Brom slightly below, but with a large fee, and A&L slightly above, but with a lower fee). Both of these are far better value than Nationwide on 4.39%.

Illustrated costs over 2 years on £90k (in order of cheapness):

A&L 4.24% + £395 = £8,027
West Brom 4.15% + £599 = £8,069
Nationwide 4.39% + £484 = £8,386

Now, this is simplifying things - you'd also have to pay valuation charges and legal fees to remortgage. But to stay with Halifax on 5.45% + £398 (possibly) - £600 saved on valuation and legals = £9,608 = far, far more expensive.

The various products listed above have different benefits and flexibility (in particular) - but there's no point payable for benefits and flexibility unless you are going to use them.

I'd suggest casting your net a bit wider before plumping for Nationwide, and probably avoiding staying with Halifax given the figures you've mentioned.

Also note that of the four lenders noted in my post, Nationwide and A&L allow existing borrowers access to "new customer" products, whilst West Brom (to the best of my knowledge) and Halifax (definitely) don't. So, if you think down the line to 2 years' time, it might save you money at that point to stay with one of the first two lenders rather than to be back in the position you are now with, with Halifax or West Brom.

Ian_W

Glad you happened along Marky, I've read this a couple of times but think it's beyond my expertise.

The point about the rate being "pants" I think, if you read again, refers to the Halifax's rate being pants. The concern being going to NW after a Halifax credit check and being refused by NW because of the check.
Also concern, perhaps, not just about the debt to be consolidated, but also the 9k on cc's which is not being but may be viewed adversly.

The other issue is what valuation the prop would get if s/he went elsewhere - "Or should I stick with Halifax as they are my current lenders and may not require a valuation ?"
The value is described,
" House value roughly £104,000 - £110,000 based on recent sales in current area, ex-council though so that usually brings it down by about £10k."
So potential valuation, if I read it correctly, may be 94-100k on a 90k loan.

Perhaps it needs Bolton Minx's friend to clarify, if these are the real concerns about switching, and it's why they think their options are fairly limited. It might be, if those are real problems, that staying with Halifax is the best option available, particularly if they can get a rate better than the SVR they're on now?

BoltonMinx

Hi all,

Thanks for the reply, will speak to Avril (username will be no_bull) when I get to work but I can answer the question about Nationwide as I think she mis-read Martin's remortgage advise and decided a no-fee would be better. I will point her in the direction of the links as above.

Also, all the houses in the area are ex-council, I think she means to say, it could be worth more, but 2 surveyors told her they knocked about £10k off due to the houses being ex-council. So the newer devpt up the road, houses are going for about £114 - £120k.

I know her remortgage attempt failed miserably last year as she didnt realise all the fees that would be charged so she's wary of getting it wrong.

herbiesjp

I think it is important here to be sure about the figures i.e house value and mortgage amount needed to clear all the debts.

Reason being you could start going over 90% LTV - which normally means slightly higher rates, and also with many lenders HLCs which can add extra fees onto the loan which may make a move not that worth while.

If you can mail back exact figures that would be useful

BoltonMinx

One question, would it be worth her getting a valuation done now to be on the safe side ? Or will the banks insist on having it done themselves ? She can get a good deal and a report within 3 days from a local firm.

MortgageGenie

Totally agree with herbiesjp, you need to get as up to date figures as possible as the LTV is a potential stumbling block.

If your friend isn't consolidating her C/C debt then most lenders will use £3240 as a long term commitment (typically 3%X£9000) and reduce her income by this amount.

I can't remember off the top of my head the position with YBS but if 90% LTV was exceeded on Nationwide's free val deals they would refund the booking (£389) & arrangement fee (£95). (Lenders require their own valuation)

What does her P60 show for year end 04/2005?

I'm also guessing she wants a repayment mortgage?

BoltonMinx

Hi,

She still can't activate her account, so I'm acting as go-between

Her pay only increased with this new job, which was started 3 months ago, so wont be on her P60 but she has 3 months' payslips. She is on £29k, its in her contract and will be reviewed in September as she's just finished her probabation period but is unlikely to get any more.

She does want a repayment mortgage.

The loan company is sending her a statement, should have been in the post yesterday, so hopefully will be received today or tommorow. In her equifax file its showing as 33,500 but its most likely less, the loan company wont confirm over the telephone but she recalls the last time, the repayment figure included £150 admin fee only.

The only sticking point is the house value, she's going to call 3 estate agents to have a look-see and take the average - thats right isnt it ?

Thanks to everyone for your help so far

no_bull

Hiya

I can finally post!!! Yipee!!! Thank you to all the people who have replied. English is not my mother tongue. So if I say it wrong, please dont worry about correcting me

Avril xxx

mrtickle

Sorry to hijack this thread but thought it better than starting a new one! I too am offered a choice between Halifax (4.29%) and Nationwide (4.39%) both fixed for 2 years. The loan would be for 95.5K on a house worth £119K and after crunching the numbers, the Nationwide works out slightly cheaper (£124) over 2 years because of the lower fees.

However the Nationwide didn't appear on my broker's search first of all, and he had to bump up my salary in his search to get it to appear. Is this a bad sign? When I mentioned my CC tarting (I have £7,400 tarted at the moment, but £11,000 in savings to pay it off) he said "you might have to pay that off". Also, the Nationwide's website "affordability calculator" hates my CCs, and say it will only lend me £83K. So I'm worried about that application being rejected.

Is that Halifax really that bad? I detest their adverts which is a good enough reason to avoid them...

Any opinions would be appreciated!

Ian_W

Also hate their ads!! Big problem with Halifax isn't now, but in 2 years time when the best deals are... Brand New Customers only! Hence the nationwide ad campaign. So it's more fees, almost for certain then - unless Halifax changes it's policy and gives it's existing cusomer ... Xtra!

Can't advise on the income stuff, hopefully one of the very helpful brokers will do. There is a thread about "new rates" from Bank of Ireland on this page, may be worth checking that out.

Good luck.