Remortgage Question

[Kingdom35]

Hi All

Our existing largest chunk of the mortgage is up for Renewal in Jan..im trying to get hold of our Natwest Mortgage Advisor but to no avail, so in the meantime I would like to call on the Pistonhead Experts for a take on our situation.

Partner is going back to work beginning of Sept but wont be earning much over the tax code. Combined we will have just over 40k income within our household. With a Mortgage left of 4.8 x that come January.

Bearing in mind I thought you couldn't get much more than 4.5 x your combined wages and looking at the online Natwest Mortgage calculator.

What happens if Natwest sees fit that we can no longer afford our mortgage, even though we can and have proven this for the last 10yrs through 2 maternity leave periods?

Im a little worried the figures don't add up and with a Credit Card on 0% balance transfer of little over £7k we may struggle and so im starting to look at alternatives. We have no childcare costs though as my partner is a Carer.

We have 3 portions to our mortgage, Original, a second (error of judgement) which was used for house improvements for our first house and then the 3rd which was the extra needed to move up the ladder. They all have different end dates to the deals, which id hoped one day to marry up.

Any advise welcome, good or bad :-/

[Sarnie]

The only way to ever get the end dates to marry up again will be to remortgage away from them to a new lender, for the whole balance.......which means at some point you will always have to incur ERC's on a couple of your sub accounts unless you just let them run onto the SVR until you are ready....

With regards to your first question 99% of the time you won't have to go through the affordability process if you are just changing rates with the same lender..........unless they suspect you can no longer afford it or you want to change anything like the term or lending amounts.............

[Pit Pony]

Its all about affordability. You havw proved you can afford it.

[I 8 a 4RE]

I'm unsure what you mean by renewal. Meaning you are allowed to remortgage?

When the initial term ends, typically the mortgage will reset (to a predefined %, that will likely by unappealing - in your mortgage papers it will say something like: "60 payments of X at 2.5% after the term the % will move to 4.5%")

But the mortgage will continue - so it's not like they will evict you because you cannot get a new mortgage.
Try to get the first part of the mortgage remortgaged, but if you can't, prepare for higher payment due to higher interest.

You probably don't want to hear this, but the advice is ... reduce your leverage!
Three mortgages and a credit card on your income is too much. Time to make some smarter budget decisions, get a side-job to up that £40K and start attacking some of the Credit Card and Mortgage debt.

The latter will allow you to consolidate the mortgages (hopefully at a lower LTV % which should be a double win).
Hope this doesn't come across harsh, not meant as such.

[Kingdom35]

Sarnie said:

The only way to ever get the end dates to marry up again will be to remortgage away from them to a new lender, for the whole balance.......which means at some point you will always have to incur ERC's on a couple of your sub accounts unless you just let them run onto the SVR until you are ready....

With regards to your first question 99% of the time you won't have to go through the affordability process if you are just changing rates with the same lender..........unless they suspect you can no longer afford it or you want to change anything like the term or lending amounts.............

Makes sense...I think there are around 6mths different between 2 of the chunks, largest and then second largest.

I see your point about the ERC, I think it was £3-4k on one of them which wouldn't be viable to switch.

Thanks for your help

[Kingdom35]

Pit Pony said:

Its all about affordability. You havw proved you can afford it.

True and we have proven it, what id like to do is extend the term a few years to make the repayments a few hundred less, so that my partner has more flexibility and we don't incur any childcare costs (well childminder costs). I guess il find out soon enough

[Kingdom35]

I 8 a 4RE said:

I'm unsure what you mean by renewal. Meaning you are allowed to remortgage?

When the initial term ends, typically the mortgage will reset (to a predefined %, that will likely by unappealing - in your mortgage papers it will say something like: "60 payments of X at 2.5% after the term the % will move to 4.5%")

But the mortgage will continue - so it's not like they will evict you because you cannot get a new mortgage.
Try to get the first part of the mortgage remortgaged, but if you can't, prepare for higher payment due to higher interest.

You probably don't want to hear this, but the advice is ... reduce your leverage!
Three mortgages and a credit card on your income is too much. Time to make some smarter budget decisions, get a side-job to up that £40K and start attacking some of the Credit Card and Mortgage debt.

The latter will allow you to consolidate the mortgages (hopefully at a lower LTV % which should be a double win).
Hope this doesn't come across harsh, not meant as such.

Mortgage term is coming to an end (well the largest chunk is)

I think on reading this say my overall mortgage was £200k. I think the largest part will be around £130-140k...so this would be the figure it will be calculated on, mind you I wouldn't have 4.5 x our combined wages as we will still have the other £50k to pay/take into consideration.

I do have a side business, but it is only a few k a year, I remember the advisor stating they take into consideration only 25% of this. So will hardly mean anything in the grand scheme.

All good advise, the CC I could probably reduce down with a little more focus.

Thanks all for the advice

[Sarnie]

Kingdom35 said:

True and we have proven it, what id like to do is extend the term a few years to make the repayments a few hundred less, so that my partner has more flexibility and we don't incur any childcare costs (well childminder costs). I guess il find out soon enough

This will trigger a full underwrite...............

[NickCQ]

Kingdom35 said:

I think on reading this say my overall mortgage was £200k. I think the largest part will be around £130-140k...so this would be the figure it will be calculated on

I'm not sure that's right - all mortgages that won't be cleared are taken into account in the calculation.

Your issue is as Sarnie says, triggering a full underwrite might put you in a 'computer says no' situation despite you having paid on time for the last X years.

Being cynical for a minute, once the bank knows you can't refinance elsewhere due to affordability, why would they offer a rate any lower than SVR, which they are contractually entitled to do?

[AndyAudi]

OP off topic but given the numbers on income you mentioned have you applied for this?

https://www.gov.uk/marriage-allowance

Frustrates me that things like this are not automatic & therefore not taken up by everyone who could, (just thought I’d mention as you might get a £250 cheque for each year your Mrs wasn’t earning above the threshold.)

[Kingdom35]

Sarnie said:

Kingdom35 said:

True and we have proven it, what id like to do is extend the term a few years to make the repayments a few hundred less, so that my partner has more flexibility and we don't incur any childcare costs (well childminder costs). I guess il find out soon enough

This will trigger a full underwrite...............

Hmm ok, so I need to keep the term the same amount of years?

[Kingdom35]

AndyAudi said:

OP off topic but given the numbers on income you mentioned have you applied for this?

https://www.gov.uk/marriage-allowance

Frustrates me that things like this are not automatic & therefore not taken up by everyone who could, (just thought I’d mention as you might get a £250 cheque for each year your Mrs wasn’t earning above the threshold.)

Thanks but were not married, I know about this allowance though, but thank you for pointing it out :-)

[Kingdom35]

NickCQ said:

Kingdom35 said:

I think on reading this say my overall mortgage was £200k. I think the largest part will be around £130-140k...so this would be the figure it will be calculated on

I'm not sure that's right - all mortgages that won't be cleared are taken into account in the calculation.

Your issue is as Sarnie says, triggering a full underwrite might put you in a 'computer says no' situation despite you having paid on time for the last X years.

Being cynical for a minute, once the bank knows you can't refinance elsewhere due to affordability, why would they offer a rate any lower than SVR, which they are contractually entitled to do?

Ok im going to need to speak to the Mortgage advisor then to sound him out on our best option then. This is starting to feel like one massive headache

[joefraser]

A term change will likely require a new affordability check, forget about contacting the mortgage advisor directly and just pop into a branch or contact mortgage services (number is on the website).

If it helps, feel free to contact me via pm and I will try to put you in touch with the right person within the group locally.

PH has always come to help me when I've been in need, it would be my pleasure to pay a bit of the favours back.

[ChrisNic]

Kingdom35 said:

Ok im going to need to speak to the Mortgage advisor then to sound him out on our best option then. This is starting to feel like one massive headache

You may struggle, the original advisor won’t really deal with existing mortgages. Ring mortgage services on 0800 0929585.

[Ilovejapcrap]

OP

How old are you both ?

how long have you left on mortgauge?

how much is house worth v what is owed on it ?

Sorry to be personal bu the credit card debt is that because you struggle and slowly stick stuf on card or did you purchase something like a car ?, using it as a cheap APR deal.

Sounds like it would be good for you to reset and put all debts onto one mortgage, but this is only a good thing if you can actually afford it.

[Kingdom35]

Thanks all for the offer. Managed to contact the mortgage advisor and obtained the necessary information

Thanks for the offer of help, advise etc from all.

Really appreciate it, always a great forum for advice :-)