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What happens when my fixed term mortgage ends?

(12 Posts)
Itsbloodyraining Mon 13-Jul-15 16:57:52

I have googled this lots but still can't find anything understandable!!

So what happens? Our current lenders rates look high, so we'd probably be looking at what the high street has to offer. So this means that we're new applicants? Our house has gone up in value by at least £40K during the last four years, so do we get the house revalued? Also we're only on one salary now which is worrying me regarding being a new applicant.

Can anyone please advise me what our next steps should be?

BeatieBo Mon 13-Jul-15 17:04:25

If you do nothing you will simply revert onto your lender's svr. Alternatively you can apply for any of their products that you are ignoble for. Alternatively you can apply for a remortgage with another mortgage lender. You would do a full application, your house would normally have a valuation and you would need solicitors (although depending on the deal you choose your legal fees may be paid) Hope that helps wink

addictedtosugar Mon 13-Jul-15 17:10:22

Beatie said it. Tho check your mortgage documents. We didn't revert to SVR, it is pegged to the base rate for the term of the mortgage, so were sticking. At the moment, its advantageous.

Have a quick look at some banks and building society web sites, and tell it aprox current value, mortgage required, and salary. If that says can't offer you enough, you may struggle (tho all lenders are different) to get the amount you need. Or visit a broker and see what they say regards salary and how much you want to borrow.

whyhasmyheadgonenumb Mon 13-Jul-15 17:12:12

Find out what your lenders standard variable rate is, if you are happy with that (and the fact that it is variable and not fixed) you don't need to do anything.
If you fancy one of your lenders fixed rates you will need to pay for it and if you have a look around and find a better rate on the high street you can remortgage but it involves proving income, a house valuation, a solicitor (usually included in low fee remortgage package) a full application and credit score which can take a while.

Book an appointment with your current lender to see what's what?

GinandJag Mon 13-Jul-15 17:13:07

If you apply for a completely new mortgage, you may fall into an unaffordability trap. Lending criteria are much tighter than they were in the past and no one will care if you can actually afford what you are paying now.

Itsbloodyraining Mon 13-Jul-15 17:20:20

Thanks all. The unaffordable trap is really worrying me now. We had assumed that after five years fixed at nearly 6%, that our mortgage would definitely decrease, but having had a quick look our current lender looks like monthly repayments would increase shock. They won't let us meet with them yet as it's ten months away, but things are so financially tight that we need to start understanding our options.

addictedtosugar Mon 13-Jul-15 18:00:15

Wow. Will you let us know who your with? I didn't think SVR's were that high.

Sounds like you might be better remortgaging, if the silly calculators will say yes. Worth a try.

Itsbloodyraining Mon 13-Jul-15 18:15:02

Ok, so we are currently 5.8, and the svr looks like 4.99. Does that seem normal? From what I can make out it's about £30 per month less. Not the big reduction we were looking for.

Think the plan will be to continue with it for a few more years til the dc are in school and I'm back earning, then do the revaluation and new mortgage etc. We're not in a secure enough position currently.

Hardtoknow Mon 13-Jul-15 18:26:05

We're in a similar position (fixed rate coming to an end in few months & just one salary) and I spoke to our current mortgage providers a couple of months ago as I wanted to find out about the process and also as I was trying to work out whether, given how much lower rates are now, it was worth us paying the early repayment charge (it wasn't). I pretended to be a bit naive and asked about the affordability criteria without mentioning the fact we were down to one income. At the end of our five years, we can either revert to the SVR (no thanks) or we can take out a new product with them in which case, if we're not borrowing more, they will just switch us onto that without doing the affordability check as we have never missed a payment, our LTV has gone down (house prices increased plus we've obviously paid off some of the mortgage) so it shouldn't be a problem.
I also spoke to a broker (London & Country who I find fantastic on mortgage advice) and apparently different lenders are applying the affordability differently. Some are scrutinising bank statements, others aren't. Some include different things to others.

Itsbloodyraining Mon 13-Jul-15 22:08:28

Thanks hardtoknow, how will they take into account that the LTV has changed? Do they revalue the property?

Albaalba Tue 14-Jul-15 19:38:38

We came to the end of our 4% 4 year fix last summer. Spoke to London and country advisors as they are whole of market and very helpful regarding advice on which lenders likely to ask for different evidence and which are very demanding etc.

You don't need to revalue before speaking to advisor if you have a reasonable idea of what your house is now worth based on neighbours recent sales etc. we knew that ours was likely to have gone up by quite a bit and we'd also done some work (attic conversion etc), so expected it to be about £150k more than we'd paid 4 yrs ago. Armed with that info we discussed options with the broker. We were down to a single salary at time as was on Mat leave and with some lenders they advised saying about mat leave and others just applying on dh salary. Some do not like mothers apparently I guess they think you might stop work altogether. Sorry not relevant for ou by possibly for others. Our LTV was as good as it could get and we are otherwise financially sound, however despite all that they did very comprehensive checks on us, looking at all our outgoings, bank and card statements. The process took nearly 2 months! Compared to practically an immediate yes and no checks back in 2010. The remortgage guide on money saving expert recommends going through all your outgoings NOW and cutting as much as you can, so when they ask for your 3 months of statements it looks clear. We ended up changing to a 2 year fix at about 2%, so quite a drop, and clearly affordable but we still had to jump through a lot of hoops. So it's good that you're looking now.

I advise you to obtain the remortgaging Guide from money saving expert site and study it. We were clueless too!

Also your estimate of house value must be reasonable because the new mortgage provider will send a surveyor to value it after you've applied. You don't want to be rejected for that because it goes on your credit record and can make other lenders nervous. Anyway MSE explains it all.

Theknacktoflying Tue 14-Jul-15 19:46:34

Look at your documentation
Find a independent financial advisor/mortgage broker
And in the words of the immortal HHGTTG - 'Don't Panic!'

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