I have a potentially very dense question re: remortgaging...

[ChiswickFlo]

So we went through a broker earlier this year to get a mortgage deal as our current deal ends in June.

Got an offer from barclays and we are currently going through the conveyancing process (hugely slow and annoying...)

However, we've finally got the mortgage deed through today along with the redemption figure from our current lender and there is a £5k discrepancy.

So eg: deed says £120k
Redemption figure is £110k

Why is this? Was the original offer fixed?

Sorry I'd this ^ is a really dense question but I'm a bit baffled and the conveyancing company are useless...:(

Thanks!

A redemption fee will be in your contract terms. It is usually if you remortgage before your current term is up, ie the 5 year fixed will have a penalty for what ever period you respond early. For example, 5% of original loan in year 5, decreasing to 1% for the year. It is rarely worth remortgaging if you’re in a fixed - don’t forget solicitor fees.

No erc as it will be after the end of the current deal

Maybe try your broker if the conveyancer isn't helping. Could it be that they've added your new mortgage arrangement fees to the mortgage? Though I'd have expected these to be less than £5k.

I think the early repayment charge is included in the redemption fee maybe if it’s your current redemption fee as if you were remortgaging now the early repayment fee would be due. But if you’re doing it so that you complete it in June then this won’t apply.

I'm really confused tbh
I've e mailed the Conveyancers but...?

Ask your solicitor for a copy of the redemption statement from your existing lender. It will have a complete breakdown of the final redemption figure. Is there a mortgage arrangement fee been added on to the new mortgage advance? You will, of course, have to pay solicitors fees and disbursements before completion.

I think you need to speak to your broker & double check the application submitted. The mortgage deed should be for the value of the new loan. There may be a difference if you over estimated how much your original mortgage balance was and you would have made payments within the time since you applied so that would reduce what is owed hence the redemption figure being lower. You would receive the surplus in that case on completion.

Or it may just be that the wrong figure has been entered on the paperwork by the conveyancer. Your broker can speak to them if you gave permission if you're having trouble with them.