Remortgage process
pledgeX
Posts: 527 Forumite
I'm currently 3 years into a 10 year mortgage fixed at 2.89%. Due to the lower rates available and a change in our circumstances (kids!) I'm thinking of re-mortgaging.
I've only looked briefly but I've seen a 5 year fix at ~1.6% with £1000 fees. My current mortgage is £103k, and the ERC would be ~£2400.
So even adding the ERC and the fees to the new mortgage, I've calculated I'd still be saving a fair chunk of cash each month. We've got a decent LTV (~35%) so we don't need to worry about changing LTV bands.
I've also got a personal loan of ~£5k which I'd like to add to the mortgage as whilst I'm aware that I'll pay more for it in the long term (~£700), I'm willing to take the hit to free up the spare cash each month over the next few years whilst the wife is on reduced hours.
I've used the calculators on here to go through the numbers and I'm fairly confident on the numbers, but there's a few things I'm less sure about:
1) Is it possible to add the ERC, fees and loan to the mortgage as per the above?
2) How does the re-mortgage process actually work? How does the money move from one one company to the other, and how do I get the money to pay off my loan?
3) Am I overlooking anything?!
I've only looked briefly but I've seen a 5 year fix at ~1.6% with £1000 fees. My current mortgage is £103k, and the ERC would be ~£2400.
So even adding the ERC and the fees to the new mortgage, I've calculated I'd still be saving a fair chunk of cash each month. We've got a decent LTV (~35%) so we don't need to worry about changing LTV bands.
I've also got a personal loan of ~£5k which I'd like to add to the mortgage as whilst I'm aware that I'll pay more for it in the long term (~£700), I'm willing to take the hit to free up the spare cash each month over the next few years whilst the wife is on reduced hours.
I've used the calculators on here to go through the numbers and I'm fairly confident on the numbers, but there's a few things I'm less sure about:
1) Is it possible to add the ERC, fees and loan to the mortgage as per the above?
2) How does the re-mortgage process actually work? How does the money move from one one company to the other, and how do I get the money to pay off my loan?
3) Am I overlooking anything?!
0
Comments
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Have you spoken to your existing lender about taking some further borrowing with them to avoid the ERC's? You may also be able to extend the term if you are wanting to bring down your outgoings.0
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Not yet, but I am planning to. I wanted to go armed knowing that what I can get elsewhere so I can say I can get X with provider Y, can you beat it?0
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I wanted to go armed knowing that what I can get elsewhere so I can say I can get X with provider Y, can you beat it?
Go online and see what products your current lender offers.
In remortgaging to another lender you'll have mortgage exit fee, legal fees and a valuation fee to pay as well. These will need to be factored into your calculations. Costs do mount up.0 -
@thugelmir, is there a difference between a mortgage exit fee and and an early repayment charge?
And aren't the legal and valuation fees often included or wrapped up into the admin fees on a new product with the larger lenders?0 -
No. Every mortgage has an exit fee to cover the legal administration costs of discharging the charge registered with the Land Registry. Be in the region of £100 to £200 pounds.
Such offers are product specific. More often or not will be in addition to a mortgage product fee.0
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