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  • FIRST POST
    • Jadakiss
    • By Jadakiss 11th Aug 18, 6:33 AM
    • 7Posts
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    Jadakiss
    Staircasing & Early Repayment Fee
    • #1
    • 11th Aug 18, 6:33 AM
    Staircasing & Early Repayment Fee 11th Aug 18 at 6:33 AM
    Hi Forum Folk

    Some assistance please, I own 40% of a shared ownership property and have been told I can re-mortgage to anything between 80% - 100%. Unfortunately I am locked into a fixed rate mortgage (ends April 2020), a new mortgage will see me paying an extra 197 a month.
    The rent if I stay with existing mortgage will be 10,000

    My questions are:
    [*]Is it worth paying the exit fee of 3500 or should I just wait it out?[*]if I wait it out until the end of the fixed term, is it likely that the flat price will jump substantially thus me loosing out on a bigger share?

    Any other advice welcome.

    Thanks
Page 1
    • haras_nosirrah
    • By haras_nosirrah 11th Aug 18, 7:27 AM
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    haras_nosirrah
    • #2
    • 11th Aug 18, 7:27 AM
    • #2
    • 11th Aug 18, 7:27 AM
    I specialise in shared ownership mortgages and have done for 10 yrs. It would depend on your existing rate and if your existing lender offers additional borrowing. Also what your new loan to value would be (i.e. if you are tied into a 3.5% product but could get a new one at 1.8% it may well be worth it - it all depends on the figures and interest rates involved)
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Jadakiss
    • By Jadakiss 11th Aug 18, 7:50 AM
    • 7 Posts
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    Jadakiss
    • #3
    • 11th Aug 18, 7:50 AM
    • #3
    • 11th Aug 18, 7:50 AM
    Perfect! Thanks for your response.

    The mortgage would be with a total new provider as suggested by broker. I will also engage with existing lender to see what is possible (he didn't mention them).

    Also, is it worth using a broker i.e. do they get better rates or should I go direct? The charge is 400.

    I will find out the interest rates and update the thread.
    • haras_nosirrah
    • By haras_nosirrah 11th Aug 18, 8:31 AM
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    haras_nosirrah
    • #4
    • 11th Aug 18, 8:31 AM
    • #4
    • 11th Aug 18, 8:31 AM
    The broker may not have mentioned them as he wouldn't be able to do the business with them.

    If though the maths works out I would always investigate going direct with a client (and have recently sent someone back to nationwide to staircase as I can't do additional borrowing with them but it is in the clients best interest as they had an erc) I will get the client back on remortgage as I gave the best advice.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • getmore4less
    • By getmore4less 11th Aug 18, 9:10 AM
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    getmore4less
    • #5
    • 11th Aug 18, 9:10 AM
    • #5
    • 11th Aug 18, 9:10 AM
    put up the numbers

    The current mortgage and how much you need from the current lender

    The deal that's on the table with a new lewder paying the ERC,

    don't forget all the fees to switch.
    • Jadakiss
    • By Jadakiss 11th Aug 18, 11:23 AM
    • 7 Posts
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    Jadakiss
    • #6
    • 11th Aug 18, 11:23 AM
    • #6
    • 11th Aug 18, 11:23 AM
    Spoken to my current mortgage provider, there will be no cost if I decide to staircase with them. As a rough estimate they say they can lend 204,000 (staircase to 60%) to go to 100% I would require 286,000. I have a call with an advisor on 22nd August to discuss my options and whether it would in fact be possible to go to 100% once they have done affordability assessment.

    *My current LTV on my share is 55% and the interest rate is 4.29%.

    The broker has found a deal which can lender me : 242,090 - the mortgage is Lender:
    *Santander UK Plc Plan: 5 Year Fixed ?999 Fee Remortgage Cashback - I can't see any LTV/interest rates - maybe I am missing something, will double check.

    I'm also on maternity leave and my pay will drop next month so ideally want to get this sorted before then.
    • haras_nosirrah
    • By haras_nosirrah 11th Aug 18, 12:26 PM
    • 1,519 Posts
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    haras_nosirrah
    • #7
    • 11th Aug 18, 12:26 PM
    • #7
    • 11th Aug 18, 12:26 PM
    who is your current lender, what is the value of the property and how much in total do you need to borrow (both mortgages together) over how many years

    Your existing rate is quite high (at a guess leeds?) in which case you may be better off ditching and switching
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Jadakiss
    • By Jadakiss 11th Aug 18, 1:44 PM
    • 7 Posts
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    Jadakiss
    • #8
    • 11th Aug 18, 1:44 PM
    • #8
    • 11th Aug 18, 1:44 PM
    Wow you are good! My current lender is Leeds.

    Approx value is 350,000
    Approx equity is 60,000
    If I have this right, will need 290,000 to staircase to 100%.

    New mortgage term I am looking at is 25years.
    • getmore4less
    • By getmore4less 11th Aug 18, 1:53 PM
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    getmore4less
    • #9
    • 11th Aug 18, 1:53 PM
    • #9
    • 11th Aug 18, 1:53 PM
    Put up all the details people don't have to guess.
    Current mortgage the details needed
    Outstanding amount
    Outstanding term(full and fixed period)
    Rate
    Payment.
    ERC

    Same for the new new offer on the table
    Same for the additional borrowing your current lender has offered.
    • haras_nosirrah
    • By haras_nosirrah 11th Aug 18, 2:38 PM
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    haras_nosirrah
    Also how long have you owned the property and was it newbuild on purchase?
    Last edited by haras_nosirrah; 11-08-2018 at 2:41 PM.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • haras_nosirrah
    • By haras_nosirrah 11th Aug 18, 2:39 PM
    • 1,519 Posts
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    haras_nosirrah
    Also do you have enough savings to cover stamp duty and legals?
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • haras_nosirrah
    • By haras_nosirrah 11th Aug 18, 2:44 PM
    • 1,519 Posts
    • 2,793 Thanks
    haras_nosirrah
    Knowing what I know about Leeds rates I am pretty certain you will be better off switching.

    It looks though as though the lenders won't get you to 290k from what you have said (you said santander will lend 242k)

    Are you considering a partial staircase?
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • Jadakiss
    • By Jadakiss 11th Aug 18, 7:31 PM
    • 7 Posts
    • 0 Thanks
    Jadakiss

    Current mortgage the details needed:

    75,000

    Outstanding amount:
    75,000

    Outstanding term(full and fixed period):
    18 years, 9 months

    Rate:
    4.29

    Payment:
    490 a month (mortgage), rent and service charge 450


    ERC:

    3,500

    Also how long have you owned the property and was it newbuild on purchase:
    Newbuild, bought in Sept 2014

    Also do you have enough savings to cover stamp duty and legals:
    Stamp duty paid in full at time of purchase, I have enough for legals but not ERC at the moment; but perhaps could beg, borrow or steal if it's worth moving now.

    Are you considering a partial staircase:
    Yes, would like to go to 100% but if not possible happy to go up to what I have been quoted on; between 75 - 90% with the potential to go to 100% depending on whether the housing association allows 100% ownership (they do)!

    Santander based on initial affordability - 242k. I don't have the rates, term is 25 years (will find out on Monday)

    Leeds based on initial affordability (without details, they will do that during appointment) is 204,000. I don't have the rates or term that was based on.

    I hope that is clearer!
    Last edited by Jadakiss; 11-08-2018 at 7:34 PM.
    • haras_nosirrah
    • By haras_nosirrah 12th Aug 18, 6:14 PM
    • 1,519 Posts
    • 2,793 Thanks
    haras_nosirrah
    without knowing things like income and commitments it is difficult to say whether another lender would lend you what you need to get to 100% but I would expect payment wise alone you would be better paying the fee. You have a high existing product rate and leeds aren't known for being competitively priced in the shared ownership arena.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • getmore4less
    • By getmore4less 13th Aug 18, 5:42 AM
    • 32,705 Posts
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    getmore4less
    I did some numbers but lost my post so here is the summary.
    Your equity shares, LTV and borrowings with the given numbers are a bit mixed they don't all match up.

    but condensing to the key can you save money

    if we look at Leeds with their 204k lending.

    if that was at a generous 4.29% 5y fix over 25years
    Santander same amount+ fees(4,500) 5y fix rate is probably going to be 2.34% depending where the LTV sits.

    you are probably comparing something like

    204,000 4.29% 1,110pm
    208,500 2.34% 919pm

    make the payments the same, in 19 months when you would have been ERC free you are 600 behind and at 5 years 4,800 ahead.


    Depending what Leeds can offer over shorter terms switching may work out more expensive but capturing a 5 year rate now may be beneficial.

    If going longer term will allow more borrowing that may be worth considering to get closer to 100% as one of the goals is to capture equity gains.
    290 35years @ 2.34% is 1012pm

    Bottom line is what do you think you can afford a month as the options to get to 100% are looking like they are going to be more than the current mortgage and rent.
    • Jadakiss
    • By Jadakiss 13th Aug 18, 10:02 AM
    • 7 Posts
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    Jadakiss
    Perfect, I think I was a bit obsessed with staying at 25years for the term but if adding an additional 10 means I can get to 100% that would be worth it. At the moment my mortgage is 1000 per month and I could afford 1200 a month.

    Thanks for all your help and advice thus far, I'm leaning towards switching! I will update with exactly what Santander are offering vs Leeds once I have my call with them next week.

    Santander LTV: 70% and Interest Rate: 2.4

    The broker is saying that the money would be leant on the basis on me going back to work full-time when my maternity ends and that they would ask my employer for confirmation of that. Ummmmm, I don't want to go back full-time.
    Last edited by Jadakiss; 13-08-2018 at 10:21 AM.
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