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Mortgage Advice please...

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  • Mortgage Advice please...

    Any advice on this would be appreciated..

    We are hoping to move in the new year, but will need to borrow more money for the type of house we want. We currently have a 5 year fixed rate mortgage which has about 3 and a half years left. I rang the morgage lender to ask what would happen if we wanted to borrow more for our next property and was told I would need to take out another mortgage account at the current fixed rate. We would also need to pay about £500 to fix the rate.

    I asked if we had to have the additional mortgage with the same lender and was told I didn't but having two lenders may complicate things.

    I have been doing the sums and am not sure if I'm right, but having two morgages keeps working out as more expensive in terms of monthly payments, than having it all in one morgage at the current fixed rate (dispite our current mortgage amount being at a lower interest rate).

    I am going to arrange to see a finacial advisor about this, but wondered if anyone could offer any words of wisedom?
    Katian Mosaics

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  • #2

    I used to deal with mortgages in a past life!! I would agree that two mortgage lenders would make things more complicated so I would stick to one if possible. When they say two mortgages it sounds complicated but it's just the same as having two savings accounts paying different rates of interest.

    Your outstading mortgage will just be transferred to your new house at your old rate of interest and your top up loan added on at your new interest rate. If rates have increased then repayments on your top up loan will be more than the same amount on your fixed mortgage. A financial planner should be able to go through the figures with you properly but the difference in repayments should only be because of the difference in interest rates. I just hate all of those expensive appliction fees!!

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    • #3
      Excellent thread,
      Mortgages are a fact of life for most people. If you are going to own a home, you will probably need a mortgage. The word mortgage is derived from the French word “Morta” meaning death; or payment until death! It sounds depressing, but it doesn’t have to be. A loan that uses real estate as capital is known as mortgage. A mortgage loan rate, on the other hand, is defined as the interest rate charged on a mortgage. Mortgages may be classified as residential or commercial mortgages. In a residential mortgage, the self-occupied residential property of a borrower provides collateral.