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Our property investment expert is Jeni Browne, Sales Director at
Mortgages for Business
www.mortgagesforbusiness.co.uk/
Tel: 0345 345 6788
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Question
Moving home: Will we be hit with an early repayment charge?
My husband and I are looking to move home – from our flat to a three-bed house. We are currently three-years into a five-year fixed rate deal.
Will we be struck with an exit charge for leaving the mortgage and taking out a new deal for the new home?
Answer
Possibly not! Firstly, you will need to check whether your existing mortgage is portable (you will find this in the T&Cs or just call your lender). If it isn’t, then yes, you will need to take a new mortgage when you move, and thus will pay any Early Repayment Charges (ERCs) when you close down the current loan.
However, as most residential mortgages are portable, there is a strong chance that yours will be too.
Assuming this is the case, you will have the option of moving your existing balance on the current rate to the new property.
If you need to borrow more, your lender will consider this as a further advance, which will be on a different interest rate than your existing mortgage.
In this circumstance, the best thing to do is to speak to your lender and check whether they will agree to the port. You can also find out how much they may offer you, and check if this would cover your move.
One word of caution – as the top-up mortgage (the further advance) would be on a different interest rate, sometimes it can work out best to take a whole new mortgage and incur the ERCs rather than pay the further advance rate.
Once you have spoken to your lender to check how much they can lend to you and on what rate, the next step would be to talk to a mortgage broker. They can cost up a whole new mortgage, helping you determine what would be best for you.
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Question
What’s the process for paying with my Lifetime ISA?
I have been saving into a Lifetime ISA for five years and am about to buy my first property. I am a bit unclear on how I cash it in, so to speak.
Will I need to transfer the money to my bank account with the rest of my deposit funds or will the lender take it straight from my savings? Are there any charges involved?
Answer
Well done for using this great option to build your deposit! You solicitor must handle all funds, so you will need to ask the ISA provider to send this to them directly.
In terms of timings, you can use the money for your exchange deposit – this is the money you hand over when you ‘exchange’ contracts. However, this must be done less than 90 days before your completion, once you have handed over the rest of the money and gotten the keys.
If the sale falls through, your conveyancer will be able to put the money and bonus back into your LISA though it must be the exact same amount.
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Question
Help! My home’s been ‘down valued’
I’m in a bit of a quandary. We are in the process of buying a new home and it was all going well until the surveyor for our mortgage lender valued the property lower than the price we had agreed with the seller. For information, we settled at £524,000 but the valuer has gone for £510,000.
We have been informed we either need to find the difference or renegotiate with the seller, although the latter is not something we think would get us far.
Someone mentioned we may be able to appeal against the valuation or get a second opinion. The problem is we also have an offer in for our current house and therefore stalling for too long may break the chain.
What is the most common route for buyers in this situation? We would value some advice, please.
Answer
This is a very common problem at the moment as the market is running incredibly hot and buyers are fighting over properties, which is, in turn, inflating prices.
Valuers need to confirm the market value based on historical sold prices, so often, there is a mismatch in terms of the numbers.
Here are your options:
1) Appeal the valuation, which should take no more than two weeks, although you may not get a satisfactory answer. You will need to provide details of three similar properties in proximity to the subject property that have sold for a higher price.
2) Negotiate with the seller.
3) Apply to a different lender with the hope that a different valuer will go out and provide a more favourable number.
4) Cover the shortfall yourself.
I would encourage you to pursue options 1 and 2 in the first instance… Good luck!
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Question
Easy remortgaging: Should I stay with my current lender
I am coming to the end of my five-year fixed rate and due to remortgage. I wondered whether it might save me a lot of hassle to remortgage with my current lender.
Would this cut down the paperwork and would it also mean I will avoid the legals and credit checks?
Answer
Taking a product transfer with your existing lender is definitely quicker and easier than a standard remortgage – there is minimal paperwork, usually no underwriting and no legal work.
However, this may mean that you secure a less-competitive interest rate than what’s available elsewhere on the market, and may end up paying more than necessary.
I suspect you would need to know how much the extra work of a remortgage could save you financially over time. A mortgage broker can cost up both options for you, leaving you to decide whether the additional effort is worthwhile!
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