what is the cost of a remortgae?

smnb08

hi guys.
we are currently going through the process of a remortgage through london and county.
we are doing it as our fixed rate comes to an end at the end of june and also want extra cash to pay off a couple of loans.
this is going to be a specialist mortgage as we have poor credit due to late payments on credit and a couple of defaults.
we are not worried about the possibility of it as our ltv will be just under 75% and we need to borrow just over 3 x our joint income also my new rate in june will go to 10% so im sure we will get something better.
question is how much will this cost me upfront?
i have no spare cash at the moment and im worried i wont be able to do it because of the costs.
i know some lenders will allow you to add it to the mortgage is this still the case with poor credit mortgages?
if not what sort of cost will we be looking at?
any help/advice would be great thanx

smnb08

helloooooo anyone there??

homer_j_3

Have l&c not been able to answer the question?

Normally you can add fees to the mortgage. Your broker should be aware that you have no money for the transaction and therefore should find a mortgage that is suitable for your needs.

smnb08

hi thanks for your reply homer_j.
i am in the very early stages as in i have just sent our credit files to them.she has no details of income house price or anything yet.
just wanted to get some advice before i speak to them again.
i will tell her i have no money then.
also will it be difficult to make sure the mortgage is portable as we want a fixed rate for a couple of years but will possibly be looking to move in one to two year.

homer_j_3

Portability does not guarantee that you will be able to move the mortgage and where the world exists that sub prime lenders will often sell books of mortgages (not as common at the moment), they often go to lenders who have no lending facility at all so will just decline the portability option.

If you are serious about moving, I would rent for 2 years and then look to buy. Your credit will be better, house prices will have reduced further and overall you will be in a better position.

smnb08

Thanks for your reply but that is not an option as obviously i would still need to pay my mortgage whilst trying to sell my house.
my rate goes upto 10.something next month plus i have loans and car finance to pay i wouldnt be able to meet the payments on everything while trying to sell my house.
are you saying that i will not be able to get a mortgage that will allow me to move and take the mortgage with me?i dont really understand your last post.

homer_j_3

What I am saying is

Ask your broker if portability is an option
Understand the option may be refused
Ask about the probability of this company selling your mortgage within the next few years.

Ask them to confirm in writing the answers.

My point is that if you were able to get a 2/3 year deal and wanted to move before this point. You will have 2 choices.

1. Port the deal or
2. Sell and pay the 6% penalty that will no doubt apply to the mortgage or some other similar charge.

Subprime mortgages rely on lending from different sources to those lenders who have savers etc, they are more likely to sell your mortgage and you need to understand that with a sub prime mortgage, OPTION 2 is the likely solution. Portability is not worth the paper it is written on and you should assume this so you can get excited if it does work for you rather than disappointed when it does not.

smnb08

thanks for that homer_j i understand what you mean now!!
would a non fixed mortgage solve my problems then or is there still usually a redemption period??also is a non fixed mortgage a good idea at the mo??

UK007BullDog

Any deal if fixed or tracker is a deal you are "tied into" for the duration. If you break the contract i.e. tied in period you will have to pay the penalty fee.

SO: If you are 100% sure you will be moving in 2 years time then only go for a 2 year deal. If you want to move in 1 year then look for 1 year deals but I dont think there are any sub-prime deals for one year as I never looked for one lately.

It might sound harsh but you need to decide now what is more important to you? Affordable rate or possibly a huge penalty later? Because you are subprime you should get your finances in order and start planning your life and finances propperly.

Also what interest rates are your loans and car loan? It could be cheaper to leave them as they are. Putting the loans on the house will make your monthly payments less, however you will be paying much more interest over the mortgage as it will have to be paid until the end of the mortgage term. Plus the loans are then secured against your home and if you default on them they can take your house.

In your situation I would suggest you find a broker you can talk to face to face to completely understand your situations and any options if any. Forget about portability. It is still costly to port and subprime is nearly impossible, especially in this credit climate.