Can I easily change mortgage lenders?

Burlesque_Babe

This may seem a simple question, but I'm not really sure where to go/start.

I moved 18 months ago. I have a self-cert mortgage for £105,000 on a £160,000 property.

At the time of moving (leaving an ex-partner and he bought me out of my old property), I had a satisfied CCJ of £400 and a defaulted credit card of £500 (now paid). The only mortgage my broker said was open to me was with GMAC-RFC.

To this day, I'm sure she said it was a fixed rate for 3 years, but it turns out I'd signed for a discounted rate for 1 year, then 2 years at LIBOR plus 2.5%.

I have 18 months left with this tie-in. There are penalties of 4% if I get out this year, and 3% next year and GMAC would want the penalties paid at the same time I leave them as a customer.

How do I go about looking to change mortgage companies - and do people think it is worth it? I pay £641 interest only and have 28 and a bit years of a 30 year mortgage left, but I would like to be on repayment.

I originally started on repayment (was about £630 per month), but when the LIBOR plus 2.5% kicked in, I decided to move to interest only for 2 years to be able to afford it (I'm now single, annual salary £24,500 if that's a factor to add in!)

I was wondering what people thought would be the thing to do - or, is it worth doing anything? With my poor credit record, and single salary, I guess many traditional routes might be out of the window, but I'd appreciate any comments/ideas. I can comfortably afford the mortgage amount at the moment, but any savings would be fantastic!

thankyou!

herbiesjp

As long as you are happy to pay the penalty, there are definitely far more competive rates out there

Burlesque_Babe

hi - many thanks - I don't mind paying the penalty - as long as it could be added to the new mortgage? If this is possible, what is the best way to go about it? I'm pretty clued up on the web/searching etc, and would rather do it all myself if possible, but is a financial advisor the best route, or can anyone offer me any possibles to start me on the track?

Hugh_Janus

swings & roundabouts
You have a £4000 penalty
You'll struggle to get a decent High Street Lender - but I reckon Abbey will sort you out.
You may save £3500 on a cheaper rate with the abbey

MarkyMarkD

I don't see that it's worth paying the penalties. I don't think you'll get better than LIBOR+0.5% with your history, and that's the effective equivalent rate to paying LIBOR+2.5% for 2 years but saving a 4% penalty. And there are, of course, other costs associated with remortgaging.

Burlesque_Babe

many thanks - I've decided to wait until the penalty period is over. I phoned GMAC and they said it is 5% in Year 2 (I thought it was 4%), but I will move after the penalty period is over and look then, as they said I will stay at LIBOR+ 2.5%, and that they will not offer me any other products (ever!), as they are only for new customers.

thankyou all for you help/advice.
Keren