Zero 7
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| posted on 7/1/07 at 01:47 PM |
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Ending Mortgage advise plz
Hello.
I bought a house last year on a Fixed rate Mortgage for 3 years.
Am wanting to sell my house now. The penalty for ending the mortgage early was £2600.
Now someone has told me that I would also have to pay also the Interest that would have accrued over the year plus the £2600 penalty plus admin costs.
Now I thought that it would only be the Penalty cost plus admin costs.
Going to phone them tomorrow anyway but its bugging me so just want to see what others thought
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Zero 7
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| posted on 7/1/07 at 01:55 PM |
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Yeah sounds all good when sorting it all out but not so good when it comes to selling.
Will wait to see tomorrow am hoping its just the fixed penalty. cheers neway
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ned
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| posted on 7/1/07 at 01:55 PM |
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You need to find an ifa to talk to who knows the products and tie-ins really. Sometimes there are get arounds if you move and keep the same mortgage
provider they may waive the get out clause if they are keeping your business but no guarantee of that.
Ned.
beware, I've got yellow skin
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andrews_45
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| posted on 7/1/07 at 02:07 PM |
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u2u sent
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oliwb
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| posted on 7/1/07 at 02:26 PM |
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Not a mortgage advisor but your best bet (and cheapest) would be to march into one of your local banks and ask to speak to one. You will probably
have to make an appointment though. I work for HBOS, like most banks they're not independent but are free to speak to. I would go in with your
contract and explain whats going one and make it out as if you want to swap mortgages with them to get some free advice. Obviously its no obligation
etc so find out what you want to know then scupper. Its playing the system a bit but an easy way to get some good free advice on a short timescale!
Oli.
If your not living life on the edge you're taking up too much room!
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MikeR
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| posted on 7/1/07 at 02:27 PM |
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this is why i'm on standard rate. I'm overpaying my mortgage. The bank wants me on a new deal ....... except if i overpay, i get hit my
penalty clauses. They say "just up how much you pay" ....... removing all freedom of choice from me about how much i over pay and when.
Costed it out, by staying on the standard rate and not over paying vs a new rate isn't that much more expensive & i've got peace of
mind (plus i annoy the bank  )
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craig1410
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| posted on 7/1/07 at 02:27 PM |
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Ask your lender for a redemption statement/value. They should be able to give you this over the phone and then back it up with a letter. Might still
be worth taking this to an IFA to see if anything can be done to reduce it but I don't fancy your chances...
Are you planning to buy another house? If so then you should be able to take the mortgage with you in one form or another to the new property without
suffering a penalty. I did this in August 2005 with Abbey and all they did was create a new loan to cover the difference.
Cheers,
Craig.
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craig1410
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| posted on 7/1/07 at 02:32 PM |
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MikeR,
What interest rate are you paying if you don't mind me asking. With my lender the "standard variable" rate was something horrendous
like 6.75% (before the recent rises) whereas I am on a 2 year tracker which is about 2% less than this. I would be paying something like 40% more
interest if I went onto the standard variable rate.
Also, my lender lets me pay up to 10% of the outstanding capital without penalty which is way more than I could ever hope to pay.
Cheers,
Craig.
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Zero 7
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| posted on 7/1/07 at 02:55 PM |
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Hello ... I had a good read through the details and luckily only have to Pay a get out charge. Which is still a stupid amount.
Am not getting a re mortgage so can not do no deals.
Would never ever get a fixed rate again. Live and learn as they say
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dave r
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| posted on 7/1/07 at 03:02 PM |
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mortgage..... hmmmm i remember those 
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craig1410
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| posted on 7/1/07 at 03:43 PM |
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quote:
Originally posted by Zero 7
Hello ... I had a good read through the details and luckily only have to Pay a get out charge. Which is still a stupid amount.
Am not getting a re mortgage so can not do no deals.
Would never ever get a fixed rate again. Live and learn as they say
Fixed rate deals are good in that they give you peace of mind in the event of rate rises like we have had recently but you need to be aware of
redemption penalties and assess the risk of your circumstances changing.
In your case I guess your circumstances have changed unexpectedly but for most people a fixed rate, discounted variable rate or tracker mortgage can
be highly beneficial. When I jumped onto the property ladder I took on a 7 year fixed rate with cashback mortgage and the redemption penalty was over
£8000 but I still think it was the best deal for me at the time. During that time my property doubled in value so even if I had been forced to redeem
the loan early I would probably still have been in profit.
Cheers,
Craig.
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JoelP
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| posted on 7/1/07 at 05:39 PM |
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its not just fixed rate mortgages that have a penalty clause, most do if they have a discounted period. Mine was a 2 year variable.
The ones i have seen (my friend has paid the penalty twice) do not involve paying remaining interest, just a penalty based on how early you leave.
Fixed rates can be great, at the minute they will be over priced though due to the uncertainty over future rate rises. However, if rates do jump
significantly, you would be glad to have gone with a longer fixed rate that seemed less competetive at the time of signing.
Mine is up for renewal now, just need to find some spare pennies to pay the broker!
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