Remortgaging whilst in a fixed agreement
Discussion
harveybobbles said:
Took out a 25 year mortgage in August 2009 as an FTB, 5.49% fixed for 5 years. Property purchased for £155k and a mortgage of £131k. Have made considerable over-payments and mortgage is now just under £106k and property value £165-170k, so an LTV of under 65%.
I have some of my savings with West Brom and am tempted to remortgage with them at 3.19% fixed for 2 years.
My current standard repayments are £805, theirs are £577 (mortgage @ 21 years length). Therefore, the saving of £228 per month multiplied by the 20 months remaining on my fixed deal is £4560.
I would be subject to an early repayment charge on my current mortgage of about £2500 and the fees for the new mortgage would be circa £170. I therefore assume the saving (over the 20 months) will be just under £1900.
Is this right, or am I missing something? I've never remortgaged before so am a bit naive.
If any mortgage advisers are reading, please feel free to PM me to discuss this or other options; I am quite happy to provide more info privately...
I'm a Mortgage Broker I have some of my savings with West Brom and am tempted to remortgage with them at 3.19% fixed for 2 years.
My current standard repayments are £805, theirs are £577 (mortgage @ 21 years length). Therefore, the saving of £228 per month multiplied by the 20 months remaining on my fixed deal is £4560.
I would be subject to an early repayment charge on my current mortgage of about £2500 and the fees for the new mortgage would be circa £170. I therefore assume the saving (over the 20 months) will be just under £1900.
Is this right, or am I missing something? I've never remortgaged before so am a bit naive.
If any mortgage advisers are reading, please feel free to PM me to discuss this or other options; I am quite happy to provide more info privately...
Most of what you've posted makes sense. My main concern would be the value of your property, why would you say that it's gone up by £10-£15k since 2009?
Sarnie said:
I'm a Mortgage Broker
Most of what you've posted makes sense. My main concern would be the value of your property, why would you say that it's gone up by £10-£15k since 2009?
Hi SarnieMost of what you've posted makes sense. My main concern would be the value of your property, why would you say that it's gone up by £10-£15k since 2009?
Short answer: Essentially an educated guess.
Long answer: I live in the south east, purchased almost at the bottom of the last 'dip' and used to work as a valuer in times gone past. A desktop valuation using either of the two big HPI or the LR figures suggest a value of between £167-£172k and that is not taking into account the work we've done on the property in the 3.5 years of ownership. I've asked one of the associates of the firm I used to work for to provide a valuation for sale purposes and she's come up with an asking price of £175-180k with a view to accepting offers of around £170k.
There are not many comparables in the immediate locale, but a slightly larger property recently sold for £215k and a similar sized property (but not the same style and without a couple of important features) sold last year for £168k. I'd therefore consider £165k a sensible valuation and one that I would have provided for mortgage purposes if I was still in my old job! I have had an old colleague of mine who is Chartered go over my figures and he agrees with my workings.
However, the West Brom mortgage is for up to 75% LTV so the value is reasonably irrelevant excepting I am aware that with an LTV of under 65% I may be eligible for better deals with other providers. If the valuation comes in under £163k (65%) I am able to inject additional cash in order to ensure it will be under 65%, unless the value comes out stupidly low!
If you are willing and have time, could you send me a PM with any additional info you might need in order to carry out a market search? I have not really researched the market and was only prompted by a communication direct from West Brom. I am quite happy to use the services of a broker rather than deal direct.
harveybobbles said:
Hi Sarnie
Short answer: Essentially an educated guess.
Long answer: I live in the south east, purchased almost at the bottom of the last 'dip' and used to work as a valuer in times gone past. A desktop valuation using either of the two big HPI or the LR figures suggest a value of between £167-£172k and that is not taking into account the work we've done on the property in the 3.5 years of ownership. I've asked one of the associates of the firm I used to work for to provide a valuation for sale purposes and she's come up with an asking price of £175-180k with a view to accepting offers of around £170k.
There are not many comparables in the immediate locale, but a slightly larger property recently sold for £215k and a similar sized property (but not the same style and without a couple of important features) sold last year for £168k. I'd therefore consider £165k a sensible valuation and one that I would have provided for mortgage purposes if I was still in my old job! I have had an old colleague of mine who is Chartered go over my figures and he agrees with my workings.
However, the West Brom mortgage is for up to 75% LTV so the value is reasonably irrelevant excepting I am aware that with an LTV of under 65% I may be eligible for better deals with other providers. If the valuation comes in under £163k (65%) I am able to inject additional cash in order to ensure it will be under 65%, unless the value comes out stupidly low!
If you are willing and have time, could you send me a PM with any additional info you might need in order to carry out a market search? I have not really researched the market and was only prompted by a communication direct from West Brom. I am quite happy to use the services of a broker rather than deal direct.
You have mail Short answer: Essentially an educated guess.
Long answer: I live in the south east, purchased almost at the bottom of the last 'dip' and used to work as a valuer in times gone past. A desktop valuation using either of the two big HPI or the LR figures suggest a value of between £167-£172k and that is not taking into account the work we've done on the property in the 3.5 years of ownership. I've asked one of the associates of the firm I used to work for to provide a valuation for sale purposes and she's come up with an asking price of £175-180k with a view to accepting offers of around £170k.
There are not many comparables in the immediate locale, but a slightly larger property recently sold for £215k and a similar sized property (but not the same style and without a couple of important features) sold last year for £168k. I'd therefore consider £165k a sensible valuation and one that I would have provided for mortgage purposes if I was still in my old job! I have had an old colleague of mine who is Chartered go over my figures and he agrees with my workings.
However, the West Brom mortgage is for up to 75% LTV so the value is reasonably irrelevant excepting I am aware that with an LTV of under 65% I may be eligible for better deals with other providers. If the valuation comes in under £163k (65%) I am able to inject additional cash in order to ensure it will be under 65%, unless the value comes out stupidly low!
If you are willing and have time, could you send me a PM with any additional info you might need in order to carry out a market search? I have not really researched the market and was only prompted by a communication direct from West Brom. I am quite happy to use the services of a broker rather than deal direct.
It seems that you've done your homework which is good. The only reason I brought it up is that valuation figures are far and away the main reason for mortgage applications collapsing. A combination of optimistic owners/buyers coupled with overly conservative valuers means that there can often be a huge disparity in figures. I had a recent one down valued from £450k to £385k, even though a similar, smaller property on the same road sold recently for £420k......sometimes there just seems to be no logic.....
I did something very similar a few months ago.
Paid 250k in July 2011.
Applied for the remortgage in January 2012.
Valuation came back in February 2012 at 265k. Remortgage complete in August 2012. At that point we therefore had our original 25k deposit, another 25k which we had overpaid since moving in, and the extra 15k of equity the bank said we had since purchasing.
Cost me a few quid to get out of our 3 year fix 1 year in, however we went from paying 5.99pc to 3pc which shaved 500 quid a month off the repayments and saved us thousands over the course of the 2 years left, had we stuck with the other deal. Even though I had to pay about 4 grand in cash for the ERC, I was still, essentially, 10 grand up using the extra equity to secure the 75pc mortgage deal - which we would have had to have found in cash if we had wanted that mortgage deal from the get go. The remortgage fees came to about 500 quid all in, as we didnt have to pay for the valuation.
Do your homework and present to the bloke from the bank the comparables when he comes round.
Paid 250k in July 2011.
Applied for the remortgage in January 2012.
Valuation came back in February 2012 at 265k. Remortgage complete in August 2012. At that point we therefore had our original 25k deposit, another 25k which we had overpaid since moving in, and the extra 15k of equity the bank said we had since purchasing.
Cost me a few quid to get out of our 3 year fix 1 year in, however we went from paying 5.99pc to 3pc which shaved 500 quid a month off the repayments and saved us thousands over the course of the 2 years left, had we stuck with the other deal. Even though I had to pay about 4 grand in cash for the ERC, I was still, essentially, 10 grand up using the extra equity to secure the 75pc mortgage deal - which we would have had to have found in cash if we had wanted that mortgage deal from the get go. The remortgage fees came to about 500 quid all in, as we didnt have to pay for the valuation.
Do your homework and present to the bloke from the bank the comparables when he comes round.
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