Re-mortgaging

areksnumbr1sxylady · 8 Sep 2013 at 21:43

Basically, due to recent financial changes we need to reduce amount of money the mortgage takes out every month...

So just wondering what are the available options, I know that speaking to mortgage adviser will help, but we want to come prepared and know some of the options...

Does anyone know what kind of fees are involved in re-mortgage?

GD am countin on ya.

Conanius · 8 Sep 2013 at 21:46

Surely this is specific to your own personal situation.

If you have shedloads of equity, you might be able to move to a new deal and lower your outgoings.

If you have loads of time till retirement, you might be able to extend the term of your mortgage, and reduce your outgoings.

The above will rely on your personal credit situation with regards to your eligibility to do either.

I'd suggest GD can help you very little, and that a mortgage advisor is your best bet.

areksnumbr1sxylady · 8 Sep 2013 at 21:49

Conanius said:
If you have loads of time till retirement, you might be able to extend the term of your mortgage, and reduce your outgoings.

Was thinking about this tbh, but heard that banks are not too happy about this... I guess thats lies?

Pawnless Endgame · 8 Sep 2013 at 21:53

My parents re-carpeted their house at a sum of £2k-3k. They were allowed to put that onto their mortgage and extend the mortgage term slightly. This was during the last recession, so it could still be possible now. Definitely worth a try.

The_Abyss · 8 Sep 2013 at 22:19

Lazder said:
Basically, due to recent financial changes we need to reduce amount of money the mortgage takes out every month...

So just wondering what are the available options, I know that speaking to mortgage adviser will help, but we want to come prepared and know some of the options...

To reduce your mortgage payments you can:

- get a better mortgage rate, with either your existing or a new lender. Both are likely to involve a remortgage and fees.

- increase your repayment term duration. This can lower the monthly amount but you'll pay much more over the complete term of the loan.

- ask for some or all of your existing mortgage to be put on interest only. Costs will be lowered but you'll still need to pay it off in the end and the lender may well ask for evidence that you can.

- if you're suffering financial hardship then you can ask for payments to be deferred. Deferred is the key word here - you might reduce monthly payments but you will not reduce what you owe and what you have to repay.

Does anyone know what kind of fees are involved in re-mortgage?

Waaaay too much. Remortgage fees are akin to those of buying a house (without the stamp duty and all the solicitors costs).

Orch · 8 Sep 2013 at 22:27

I'm a mortgage adviser. Post up some details and I'll let you know what I think if you like
(don't worry I don't need your bank details or income figures

)

Who's the mortgage with? Remaining term? Repayment basis? Are you locked in to a rate at the moment? ie. with early redemption penalties?

How old are you both? What's the loan to value? Does your income stack up easily or is affordability fairly stretched?

Can understand if you don't want to get into the details on here, if so, go and see a mortgage adviser

Orch · 8 Sep 2013 at 22:28

The_Abyss said:
Waaaay too much. Remortgage fees are akin to those of buying a house (without the stamp duty and all the solicitors costs).

Nonsense.

Orch · 8 Sep 2013 at 22:29

The_Abyss said:
- ask for some or all of your existing mortgage to be put on interest only. Costs will be lowered but you'll still need to pay it off in the end and the lender may well ask for evidence that you can.

A lot more difficult now than it used to be.

dirtychinchilla · 8 Sep 2013 at 22:35

Someone's keen the use the MM

I can't believe someone would extend their mortgage to recarpet the house...wtf!

Orch · 8 Sep 2013 at 23:09

Ha, I am yes, but I honestly didn't about that. Answered first read the thread second

HangTime · 9 Sep 2013 at 00:16

dirtychinchilla said:
I can't believe someone would extend their mortgage to recarpet the house...wtf!

Why not? For many people mortgages are one of the cheapest forms of long-term credit available. Assuming they didn't get hit with big fees it was likely cheaper than a personal loan, whacking it on a credit card or whatever. If you think about it, what they did isn't much different from someone taking out a mortgage to buy a house and then laying new carpets - had they not paid for the new carpets, they could have borrowed less and thus repaid it over a shorter period.

As for the OP, key advice I would give is that monthly repayment amounts are not the be-all and end-all. Don't get yourself in a situation where you end up paying big fees (early redemption on existing mortgage, arrangement, valuation etc) just so you can whack some extra years on the term and end up paying through the nose for it.

Ideally I would suggest trying to move onto a cheaper product over a longer period with low fees and the ability to make overpayments (should your circumstances improve in future). As always though run the numbers as the larger the mortgage you have, the less important fees become relative to the interest rate.

nick.lidgett · 9 Sep 2013 at 00:50

Monserrat said:
My parents re-carpeted their house at a sum of £2k-3k. They were allowed to put that onto their mortgage and extend the mortgage term slightly. This was during the last recession, so it could still be possible now. Definitely worth a try.

I dont mean any disrespect here mate but your mum and dad must be stark raving mad to put £2-3k on their mortgage and extend the damn thing.
Do they not realise how much that carpet is going to cost by the time the mortgage is paid?
LMAO.

OP - is going interest only with your current mortgage lender an option? Saves the bother of moving around.

Phantom Shadow · 9 Sep 2013 at 01:13

nick.lidgett said:
I dont mean any disrespect here mate but your mum and dad must be stark raving mad to put £2-3k on their mortgage and extend the damn thing.
Do they not realise how much that carpet is going to cost by the time the mortgage is paid?
LMAO.

OP - is going interest only with your current mortgage lender an option? Saves the bother of moving around.

Surely depends on how it was handled, if you put it on the mortgage and keep to minimum payments then yes a rather expensive thing to be doing, but if you put it on the mortgage and overpay the extra+interest within 2-5 years then it would work out a lot cheaper than a personal loan as you are paying back over the same short term period but with a lower interest rate assuming you could overpay by the relevant amount.

Defy Belief · 9 Sep 2013 at 08:02

Orch appears to be the only person that really knows how it works. (I'm also a mortgage adviser)

Interest only as said is a dying option, endowments have dropped considerably, pension funds have to be huge. (1m+ for who I work for)

I'd just say go and see an adviser in branch, or ask for an advised level of service when you call a lender.

Also are you still on your product (Fixed/Tracker) or are you on the Homeowner variable rate set by the bank? Could drop the % a little if it's the latter.

LeeUK · 9 Sep 2013 at 08:56

How does buying someone out of a shared outright ownership property work? I own 50% and would like to buy the other 50% holder out. Would this be called a re-mortgage?

I don't currently have a mortgage.

Ukadder · 9 Sep 2013 at 09:18

LeeUK said:
How does buying someone out of a shared outright ownership property work? I own 50% and would like to buy the other 50% holder out. Would this be called a re-mortgage?

I don't currently have a mortgage.

That process is called staircasing. Speak to your housing association.

You'll have to pay stamp duty as well if the value of the house goes over £125K and you'll need to get a mortgage for the other 50% that you buy. You wouldn't be re-mortgaging as you don't current have one.

LeeUK · 9 Sep 2013 at 09:25

Ukadder said:
That process is called staircasing. Speak to your housing association.

You'll have to pay stamp duty as well if the value of the house goes over £125K and you'll need to get a mortgage for the other 50% that you buy. You wouldn't be re-mortgaging as you don't current have one.

There is no housing association. The property was inheritance along with my sister and is worth less than 100K

Orch · 9 Sep 2013 at 09:27

Defy Belief said:
Orch appears to be the only person that really knows how it works. (I'm also a mortgage adviser)

Interest only as said is a dying option, endowments have dropped considerably, pension funds have to be huge. (1m+ for who I work for)

I'd just say go and see an adviser in branch, or ask for an advised level of service when you call a lender.

Also are you still on your product (Fixed/Tracker) or are you on the Homeowner variable rate set by the bank? Could drop the % a little if it's the latter.

We need a thumbsup smiley. Completely agree.

There you go you've got two mortgage advisers ready to help you out.

Maundie · 9 Sep 2013 at 09:30

Ive just had a letter from Santander saying my fixed term is up and I can now change to a different mortgage if I want.

Not sure if I want to as my rate should drop making it cheaper but would anyone advise another fixed term as interest rates haven't risen in over 3 years I think?

Orch · 9 Sep 2013 at 09:31

LeeUK said:
There is no housing association. The property was inheritance along with my sister and is worth less than 100K

So no mortgage at present? That is termed Unencumbered.

It's kind of a grey area as to whether it's termed a purchase mortgage or a remortgage to be honest, some lenders consider it one, some the other.

Either way it's a mortgage with transfer of equity. Pretty standard stuff (happens a lot in divorces) so just best bet is to speak to an adviser and explain what you want to do.

Have you and your sister owned the house for more than six months? Do you both live in the house?