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Topic: New mortgage deal - advice?  (Read 1063 times)

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New mortgage deal - advice?
« on: January 09, 2021, 02:20:23 PM »
Hey guys,

So, my initial fixed-rate mortgage term comes to an end in March and I'm trying to decide which new deal to choose... since I've never done this before, I was hoping some of you with experience of remortgaging your houses might be able to offer some advice?

The options I'm trying to decide between are:

1. Choose a new deal online vs. book a phone appointment with a mortgage advisor?
I like the idea of just doing it online myself, but is that wise? I've been doing some internet research and have already gone onto my mortgage lender's website to view the different deals and see my options, so I feel like I'm getting to know how it works and I'm wondering if I actually need to talk to an advisor or not.

2. Length of new fixed-rate deal: 2-year, 3-year or 5-year? (3-year and 5-year have the same interest rate, 2-year has a slightly lower rate)
My initial fixed rate was 5 years, but I read that if you think you might want to move in the next couple of years, it's best to go with a shorter term so you don't have to pay fees if you move during the fixed term. I've been considering trying to move back down south again, but I'm not sure how likely it is I will do it any time soon, since I've been thinking about it for several years and still haven't done it yet, mainly because of the much higher cost of living and property in the south.

3. Do I pay no product fee but have a higher interest rate, or do I pay the product fee (£999) and get a lower rate?
Of course, ideally I want to go with the cheapest option for the mortgage overall. I've read that it if you're going to pay the product fee, it's better to add it to the loan rather than pay it upfront, so you don't lose the money if something goes wrong. Of course, doing that adds interest on the product fee, but the advice was to overpay once the mortgage has started so you pay off the product fee quickly and don't have to pay the interest.

Any thoughts or advice on best practice, or what worked well for you would be very much appreciated. Thanks :).


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Re: New mortgage deal - advice?
« Reply #1 on: January 14, 2021, 11:45:34 PM »
Hey guys,

So, my initial fixed-rate mortgage term comes to an end in March and I'm trying to decide which new deal to choose... since I've never done this before, I was hoping some of you with experience of remortgaging your houses might be able to offer some advice?

The options I'm trying to decide between are:

1. Choose a new deal online vs. book a phone appointment with a mortgage advisor?
I like the idea of just doing it online myself, but is that wise? I've been doing some internet research and have already gone onto my mortgage lender's website to view the different deals and see my options, so I feel like I'm getting to know how it works and I'm wondering if I actually need to talk to an advisor or not.

2. Length of new fixed-rate deal: 2-year, 3-year or 5-year? (3-year and 5-year have the same interest rate, 2-year has a slightly lower rate)
My initial fixed rate was 5 years, but I read that if you think you might want to move in the next couple of years, it's best to go with a shorter term so you don't have to pay fees if you move during the fixed term. I've been considering trying to move back down south again, but I'm not sure how likely it is I will do it any time soon, since I've been thinking about it for several years and still haven't done it yet, mainly because of the much higher cost of living and property in the south.

3. Do I pay no product fee but have a higher interest rate, or do I pay the product fee (£999) and get a lower rate?
Of course, ideally I want to go with the cheapest option for the mortgage overall. I've read that it if you're going to pay the product fee, it's better to add it to the loan rather than pay it upfront, so you don't lose the money if something goes wrong. Of course, doing that adds interest on the product fee, but the advice was to overpay once the mortgage has started so you pay off the product fee quickly and don't have to pay the interest.

Any thoughts or advice on best practice, or what worked well for you would be very much appreciated. Thanks :).
Woo hoo! Finally, something I can help with. :)

1) If I were you, and given the scenarios you’ve highlighted below, I would talk to a mortgage advisor (or even broker). Oftentimes an initial meeting or 2 to understand your circumstances and for them to come up with options is free of charge; there may be a fee when the buying process is concluded, but when they could potentially save you thousands in the long run it’s water off a ducks back.

2) you can still do 5 years if you have a comfortable rate. Some lenders allow you to transfer your mortgage to a new property (in with NatWest and they allow this- I’m also on a five year term). This may be helpful to talk through with an independent mortgage broker or relevant mortgage advisor to understand what you can / should do.

3) definitely pay the product fee. My logic behind paying the product fee is that I’d rather pay a one-off £999 than pay an additional £x thousand of my cash because of the inconvenience of having a product fee. It sucks and it’s payment for nothing (!!!) but it means you pay less towards the bottom line. I can’t remember if we paid the product fee up-front... I think we did because we were confident in the overall process with the support from our solicitor and broker!


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Re: New mortgage deal - advice?
« Reply #2 on: January 15, 2021, 03:11:12 PM »
Thanks :).

I was kind of hoping to get away with not talking to a mortgage advisor (which will be over the phone due to Covid)... and instead  I was hoping to just set everything up with a couple of clicks on my laptop :P.


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Re: New mortgage deal - advice?
« Reply #3 on: January 15, 2021, 04:00:04 PM »
I have a great mortgage broker. And she’s soooo easy to work with. But I understand not wanting the homework. You’ll have to complete a monthly budget spreadsheet and fill in a few forms.


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