Want to move away from my 100% mortgage

Skeeto_2

Any advice appreciated.

I currently have a 100% Mortgage at £93,000, Discounted for 2 years (-1.50% on SVR) with the RBS. My income is around 36K per annum.

We signed off on the deal on 12 Nov 2003. As I understand it, we can move to a different deal/lender on 2 Feb 2006 at 1% redemption fee, or on the 2nd Feb 2007 at no cost.

The discounted rate finishes on the 2 Feb 2006 and we really dont want to wait another year paying the higher rate (reverts to standard rate 6.59%).

An added factor is that the property is now worth 110K and we would like to remortgage for around 103K (baby on the way, car and some home improvements needed). Any advice appreciated...I am a bit of a novice in this area...

thanks

skeeto

meanmachine_2

So you were on a stepper, rather than a 2 yr discounted.

Sounds to me like moving early will cost you £930 quid. You have to work out whether you can save that money and more by moving to a lower deal.

DELBERT

i did the 100% mortgage with b of s when i started with my first property 5 years ago i stayed with them until my slightly higher rate was finished (due to being 100% mort) then moved away from them to cheaper deals
currently looking at moving to alliance and leicester who are offering 4.74% fixed fee free mortgage they seem to be the best one i can find at the min plus if you are sneaky and open a bank account with them before going for a mortgage with them, when you do complete on the mortgage they then pay a thankyou of £259 into your a+l account, so this could help on the fees of getting out of another lenders mortgage but you need to weigh up how much you will be saving if you quit you your current mortgage or if it is best to hang on so you dont get stuffed with big fee to move

plus forgot it you apply on line to open alliance and leicester bank account you get £25 and if you know someone who has an account with them and them recomned a+l to you you get a further £50 quid each

herbiesjp

You will have to right 100% sure of the property value - as if the surveyor values at slightly lower, it could mean rates available not being that fantastic. The figures you quote are already at 94% LTV. Don't forget most lender will charge a Higher Lending Charge at this amount of borrowing - did RBS charge you the MIG fee when you took out the mortgage and was that added to the loan?

Skeeto_2

The mortgage was a MAP Free 2 year discount...

I am reasonably sure that the valuation of the property would be above that which I quoted above, I was purposely being conservative (however, this is based on comparisons with similar properties in my street and not on any solid evidence)

Fairdo_2

Agree with meanmachine on this one.

However, you may want to consider this above the pounds and pence that you may save on a like for like basis, as it sounds like you are wanting to borrow more money in preparation for new baby coming along, so even if it doesn't save you the money and then some, it may still be worth you remortgaging for the bigger amount, rather than further advancing with fewer choices.

I put the usual caveats in though, that you need to be assured that you would afford the new monthly repayments. Take into account if your partners income is reducing for a short period (and if yours goes, if you take over the care of the baby- mustn't make any assumptions!)

Try to look at a product that will be entirely suitable for your new needs, so you don't have to be exposed to Early redemption charges again.

Ideally consult a trustworthy mortgage broker to look through your full picture for you and see if you can save in entry costs, etc and maybe review the protection you have in place to ensure suitability.

You may still be better off staying where you are, but you would be best to get someone to look through your full circumstances.

boltonangel

try cheshirebs.co.uk for some best buy mtge rates. i particularly like the 25yr fixed at 4.99%, with opportunuties to come out further down the line.

Skeeto_2

Thanks for the advice guys, very very much appreciated...

I think we would be wise as you say to liaise with a trustworthy mortgage adviser and have the whole picture looked at...

I was also planning to write to the RBS to see if they could offer me any alternative/better products, and to see the associated costs with moving...perhaps using the draft letter supplied on this site.

Again, thank you very much for all the advice...