Remortgage

Magic_Dragon

Hi Everyone

We are in a bit of a sticky situation and need a bit of advice on a few areas.

We were selling our house. Unforunately our buyers can no longer proceed as thier buyer pulled out right before exchange of contracts. During the selling proccess our fixed rate has ended

We currently have a £143,000 Interest Only mortgage with Halifax now on their SVR. Property is worth approx £179 (what we sold for). We have £75,000 joint income.

We also have a second charge on the property from the MOD due to a LSAP loan provided by the Armed Forces (£5000 interest free)

We know the chances of selling our house again at a decent price are slim. So we are resigned to the fact that we will more than likely have to stay put.

The first query I have is about the Second Charge on the Porperty. Will this stop us from using certain companies or getting a decent deal?

Secondly, we were thinking of switching over to repayment now. We will be moving again in the next 3-5 years, possibly before. I am not sure if we will pay off a significant amount of capital in that time? So is it worth paying extra on a repyament mortgage?

Lastly, we are still going to try sell the house over the summer. Can we remortgage whilst the house is up for sale?

Thanks in advance for any advice

luckyfool

1. It shouldnt stop you from shopping around, though it does complicate matters and might make the whole process take longer at the legal end. You would need the MOD to grant a Deed of Postponement to allow a new mortgage to come back in ahead of them in the queue to be repaid. I'm not sure of their policy on granting these.

2. As an alternative you can obtain a new deal from Halifax without going through that hassle. I know there are some pretty decent Halifax Product Transfer rates available, including some exclusively through brokers. Having said that, this option is likely to be more expensive than moving to a new lender. On the other hand if you go for a Transfer this can take effect from the beginning of the following month, whereas a remortgage to a new lender is likely to take 8-12 weeks with the consents and legal work required in your case.

Lastly - you can remortgage while its for sale. Do you plan to buy another property, if so then taking a fixed rate or similar on a remortgage shouldnt be a problem as it would be portable. The concern is that if you do not intend to take another mortgage, in that case you definitely need to make sure any new product you take does not have any penalties for early repayment.

payless

If you are actively palnning to sell I would be careful of remortgaging ( or in house swap) onto any deal with a tie , its one thing using a portability option if you have to, its another actually making it part of your plans. What if either you or the new property does not meet the lenders criteria ( i've heard of people having to pay to get out- there was a thread yesterday ).... plus if needing a larger loan you will end up with 2 products/ poss uneven
ties.

If you really do this try and get some assurances from lender that you meet criteria for proposed move ( and even that is not an assurance)

payless

I believe a particular large EA chain is targeting new vendors for remortgages in these circumstances ... I see trouble ahead

homer_j_3

and I can see the MA's telling management that its not best advice and the management not caring as such lol.

Magic_Dragon

Thanks for the input!

Just to expand a little. If we sell our house we will be moving into military rented accommodation so wont require a mortgage

I have already spoken to Halifax. Thier products were not very competitive.

Best rate was 6.19 fixed for 3 years with erc's during that time, plus a £999 fee- I am currently on 7% SVR so this didn't seem like a good idea. All thier tracker products have ERC too. We are not eligible for there flexible mortgage due to the Second Charge

I was looking at a HSBC Life Term Tracker - BOE +0.99, Low up front fees and no ERC. We should be within the 80% LTV depending on how they value our home.

Maybe we should just stay on SVR for a few months and see if we can actually sell the house? There doesnt seem to be any really good deals out there at the moment anyway

Magic_Dragon

I should add that we can afford to stay where we are.