Advanced search

Mumsnet has not checked the qualifications of anyone posting here. Free legal advice is available from a Citizen's Advice Bureau, and the Law Society can supply a list of local solicitors.

Help with choosing a mortgage

(8 Posts)
BimbaBirba Fri 10-May-13 21:52:20

Hi, I would be really grateful for some help and advice.
We've just had our offer accepted on a property (yay!) and we will need to borrow £350,000. The purchase price is £500,000 so it's an LTV of 70% exactly. At the moment we have a great tracker deal taken out in 2007 of + 0.75% above base rate. We like the sound of tracker mortgages and we would like to find another deal. I've had a look online and HSBC seems to have some pretty decent deals at + 2.29% for 70% LTV. However I am (perhaps irrationally!) concerned that when they carry out the house valuation, they'll value our house at less than the purchase price which would make the mortgage unaffordable because we'd be above 70% LTV. In the past, RBS have valued our house at £40,000 less than the sold price and thus forced us into an expensive deal.
So my questions are:
1. how common is it for lenders to value at significantly less than the purchase price and is it a sneaky way to get people onto more expensive rates? I do think the house we're buying is worth its price tag and it is in a very sought after area of East of England. It generated a lot of interest too but there aren't any similar houses that have sold recently in the area so Zoopla's valuation is only £399,000.
2. Is HSBC a good lender in terms of handling times and efficiency?
3. Are we right in thinking that a low tracker is the best type of mortgage? We're not keen on the idea of remortgaging every few years.
4. Is the house valuation likely to be more accurate if we do a full survey with the lender as opposed to basic valuation?

Thanks in advance!

Roshbegosh Fri 10-May-13 23:58:13

They always under value in my experience, cautious I suppose.
Not sure about a tracker, rates have been low for ages but you never know what might happen in the future. I prefer fixed but what do I know?
Never used HSBC, sorry.
Hope someone gives you some good advice on here.

leaderscorp Sat 11-May-13 04:43:39

Today's mortgage rate is low so I would go for fixed rate as well. This is an opportunity since we can't figure out what will happen on the economy ahead.

BimbaBirba Sat 11-May-13 08:08:20

Thanks for you're replies. Fixed is only for 2 or 3 years though. After that it's the standard variable rate which AFAIK is whatever the lender can get way with charging?

Rockchick1984 Sat 11-May-13 09:21:35

HSBC do a 5 year fixed rate which is less than 1% higher than the tracker so although you would then need to remortgage (or go onto SVR) there's a good chance you would end up paying less as base rate is unlikely to stay as low as it currently is for much longer. If you can make overpayments on the mortgage, you could try to be in a position in 5 years to remortgage on a 60% LTV rate instead and get a better deal that way.

Skinnywhippet Sun 12-May-13 17:26:02

That's a lot of money to borrow! Well, it probably isn't, but your post struck a chord as we also have about £160k deposit, but I would be too scared to look at properties that expensive. It's the stamp duty that panics me tbh.

Anyway, that was way off topic! Hope you get it sorted.

mamapants Sun 12-May-13 17:40:24

HSBC are pretty good and efficient.
Used them for both my house purchases.
They surveyors they had me use the 2nd time were rubbish though and made a fuss about numerous little details. They also undervalued our house so we had to borrow less money inorder to preserve our 70percent LTV.
We have a tracker but its all personal preference really we will probably borrow more money after we've done more work and can retain the 70percent and then fix our payments then.

Ebayaholic Sun 12-May-13 19:29:02

Can you not port your current tracker rate?

Join the discussion

Registering is free, easy, and means you can join in the discussion, watch threads, get discounts, win prizes and lots more.

Register now »

Already registered? Log in with: