Mortgage switching questions

nouveau_4.0

I'm currently looking coming off a fixed rate mortgage and am currently considering my options. I've been sent the rates by my current mortgage lender, and have been to see two other lenders, one of which is offering a better rate than my current lender.

Is there any charges to me in switching a mortgage from one bank to another?

I plan to go back to my original lender with the other offers to see if they will match or beat these rates. Is there any point in trying this or am I wasting my time? Is it possible to negotiate with banks?

I'm thinking of fixing for the next few years (3/4/5) but would still like the freedom to overpay, if I can. Is it possible to fix most of your loan and make part of it variable?

Victor

nouveau_4.0 wrote: »

Is there any charges to me in switching a mortgage from one bank to another?

There are likely to be legal fees and stamp duty on the mortgage. Probably under €1,000.

The_Conductor

To be perfectly honest- the pertinent question here- is whether your property is in negative equity or not. Most lenders are now taking current valuations, applying a reduction coefficient (for Bank of Ireland as high as 20% but others may be lower), and offering a max of 92% of this lower amount (profession and employment status dependent), subject to lending multiples akin to perhaps 4.5-5 times main income and 1 time secondary (if there is a secondary).

Lending conditions are vastly changed (even in the past few weeks), however if you have equity built up in your property- you can leverage this to try to get a better rate from your current providor.

S.

nouveau_4.0

smccarrick wrote: »

To be perfectly honest- the pertinent question here- is whether your property is in negative equity or not. Most lenders are now taking current valuations, applying a reduction coefficient (for Bank of Ireland as high as 20% but others may be lower), and offering a max of 92% of this lower amount (profession and employment status dependent), subject to lending multiples akin to perhaps 4.5-5 times main income and 1 time secondary (if there is a secondary).

Lending conditions are vastly changed (even in the past few weeks), however if you have equity built up in your property- you can leverage this to try to get a better rate from your current providor.

S.

I wouln't think I'm in negative equity. One of the lenders I went to applied a reduction coefficient of about 16% to the valuation, and I was still comfortably withing their 50-80% LTV range. The lending multiple is a little less than 4 times the main income.

I feel I have a pretty strong application. If I could get my current lender to match the competition, I'd gladly stay.

Anyone have any input in splitting your mortgage into part fixed, part variable?

nouveau_4.0

Victor wrote: »

There are likely to be legal fees and stamp duty on the mortgage. Probably under €1,000.

Will the bank I'm moving to cover these, or are those days gone?

Why would there be stamp duty on the mortgage?

The_Conductor

nouveau_4.0 wrote: »

Will the bank I'm moving to cover these, or are those days gone?

Why would there be stamp duty on the mortgage?

If you're changing mortgage providor your deeds will be stamped with the new mortgage providor details. Its a simple stamping exercise- but can cost a couple of hundred in fees.

The_Conductor

nouveau_4.0 wrote: »

I wouln't think I'm in negative equity. One of the lenders I went to applied a reduction coefficient of about 16% to the valuation, and I was still comfortably withing their 50-80% LTV range. The lending multiple is a little less than 4 times the main income.

I feel I have a pretty strong application. If I could get my current lender to match the competition, I'd gladly stay.

Anyone have any input in splitting your mortgage into part fixed, part variable?

Yes- it does sound as though you're in a strong bargaining position.
It can take some time to get an offer from alternate mortgage providors in the current climate- and your current providor is going to say hearsay until such time as you have an offer in writing.

I would personally be far more inclined to try to get a reasonable longterm fixed rate offer from my current providor- possibly a 10 year rate, and compare this to comparable rates in the market. I now all the marketing jargon about part fixing- to get the best of both worlds- but the inverse of the marketting jargon is you also get the worse aspects of both. Interest rates are at historically low levels, and fiscal policies have already started to tighten. Its expected that rates will start to rise from Q3 or Q4 2010- but of course this is dependent on how the recovery in France & Germany progresses. Normalisation of rates is considered to be ~4.5% which is 3.5% above current levels. You *need* to factor at least a 3.5% rise into your equations. It is going to destroy this country- adding 3.5% to rates, but we're only a tiny part of the Eurozone. If the low rates didn't suit us earlier this decade- you can be certain the higher rates won't in the future.....

I'd encourage anyone thinking of getting a mortgage at the moment to look at the longer term offers available, than the shorter term offers........

nouveau_4.0

Just following up from my last post.

Went back to my current lender, apparantly they do not negotiate rates under any circumstances. Since the rates the offered me are 0.4% dearer, I think it might be worth moving.
Also my current lender says they no longer do 10 year fixed rates. 2, 3 or 5 years are the only fixed rate options available.

I contacted my solicitor o see what kind of switching fees there are and they quoted me €750 for their fee alone. Another few hundred for land registry and other fees.

Is €750 very expensive. Is there any reason why I couldn't use a different solicitor to the one I dealt with when buying the house if I got a better deal?

Victor

Some solicitors were doing house sales for €1,000 + outlay. there is no reason it should cost this much for a mortgage transfer when they have done most of the work already.

I imagine the only real problem might be if the registration process isn't yet complete (it can take years in some cases).

Shop around.

3DataModem

smccarrick wrote: »

It is going to destroy this country- adding 3.5% to rates, but we're only a tiny part of the Eurozone.

In the early nineties rates were 10% to 13%.

The_Conductor

3DataModem wrote: »

In the early nineties rates were 10% to 13%.

And private sector debt was virtually non-existent.......

Victor

3DataModem wrote: »

In the early nineties rates were 10% to 13%.

And ordinary houses cost €30,000.

mastermind2005

Victor wrote: »

And ordinary houses cost €30,000.

More like £15,000 to £25,000