Not AIBU but need help. Mortgage related.

[WhimpyKid]

Need help regarding mortgage renewal. We took mortgage nearly 5 years ago, due for renewal in a couple of months. At that time my DH had a well paid job, around 48k. Due to it being stressful and demanding he left it to open his own business. That was around 2-3 years ago. Now, this job brings only 28k. I don’t work, we manage, never been late with any payments, bills etc. Our monthly mortgage payment is around £920. My question is can they refuse renewal with this small earnings? Will they check? Bank’s been asking to update details online but we’ve been postponing it. Me being me I worry too much sometimes. Can someone advise what do banks do in situations like that? Thank you

How long is the term of your mortgage? It sounds as if you are coming to the end of a fixed rate deal. You will just revert to the standard variable rate of whatever bank you are mortgaged with so there is no checking of affordability. There will be checks if you want to take up another fixed rate deal. Have a chat with a mortgage broker, they will advise of remortgages open to you. Alternatively just stay on the standard variable until your income improves.

Thank you for your reply. It’s 5 years.

That doesn't sound right. Mortgages are normally for 25 or 30 years.

Is it a renewal though, or is it an end to your fixed term? I would have thought the latter. They have already given you the mortgage for whatever term (e.g 25 years). As long as you’ve been making repayments on time, they can’t just withdraw the mortgage and require you to repay it.

What they can do however is to give you less prefential rate at renewal.

If it were me I’d try to seek some independent advice, or maybe post the dilemma on something like MoneySavingExpert. What happens if you don’t ‘renew’ for example with your current provider? It might just be that you move from a fixed rate to a tracker rate?

It really depends on how much is left on your mortgage.

How much do you owe, how long is left, how old is he? Those are the key points.

Plus what the previous posters said!

I'm pretty sure if you re-fix with the same provider there are no checks

Agree with Jon66 - remortgaging is optional - when we were in same situation we had to stick with existing deal on standard variable until DH had self employed income at the required level for three years - some lenders will accept two.
A broker is definitely your best bet - we used London and Country .
Good luck

Prusik - that's interesting wish that had been true of our lender - at that time Santander wanted to redo affordability for any changes - literally even amending my name to our married name !

Broker. Broker. Broker. Stop worrying and go get helpful advice from someone local and independent. Any friends you can ask for recommendations? At both getting our first mortgage and getting a new deal at the end of the fix we 1) tried by ourselves. Stressful, time consuming, so many worried about how we'd be perceived by banks then 2) spoke to a small local partnership who gave us great, helpful, advice and reassurance, did all the work, got better results than we'd initially had and cost us not a penny. We've just recommended them to a friend and it sounds like again theyve done a great job.

Hi, sorry it meant to say 35 years 🤔

We had no checks when we fixed for a further 5 years with the same bank.

Contact London and country. They are free and have an excellent grasp of lenders criteria

We got a mortgage about 10 years ago.... they did all the checks and what not back then, but never have we been asked for proof of income or anything else since, while we've been renegotiating fixed rate.

Our last renewal we renewed online...Literally chose how long we wanted to fix it, clicked a button and it renewed, It was so easy!!

We stayed with the same company, it isnt worthwhile us changing as we'd have to pay fees to switch which takes away any lower price (eg...save £20 a month but have to pay £2000 to switch/set up new mortgage...so makes no sense to move)

If you re fix with the same lender, in my experience they don’t check.

When I came to the end of my fixed term I was told I had to re-apply if I wanted to change the term, but I could get another fixed term without doing that.
I wanted to up the payments to reduce the term, but since it was such an enormous pain in the bum the first time round (slightly unusual income) I just changed it to make overpayments.

Broker. Broker. Broker

Nope!

Broker or not there is no way in Merry hell ANY new lender will approve a mortgage with £920 repayments on a £28k income. The OP should just re fix with her current lender.

Thank you for your replies. The term is 35 years. It is an end of a 5 year fixed rate.

I was fixed for 3 years then reverted to standard rate 2% above interest rate then I fixed again online took me 5 mins and no checks at all as stayed with same provider

This applies to the big lenders.

They will not request a fresh mortgage application, if you keep the same term on the same borrowing (e.g not moving or borrowing more). Look at the available deals on your current lenders website.

Agree with Clivebaby, can always overpay if you want. A fresh mortgage app, is a huge ball ache.

Thank you. That’s really helpful. I panic too much and tend to overthink things.

First thing to do is see what is on offer with current provider, switching or moving to variable rate doesn't sound like an option.
You may find your mortgage actually comes down as the capital outstanding should be lower and hopefully the LTV is lower too with capital appreciation.

Stay with the same lender but just switch deals. The big banks do in online in seconds. I had a similar small panic when we switched as I’d stopped working but it was a matter of clicking a few buttons.

Please don’t stress.

I've never had my lender ask for updated financial information at the end of our fixed term. We just reverted to whatever the tracker mortgage rate was.

Your biggest issue will be if your mortgage payment jumps up at the end of this fixed rate period when it reverts to the base rate.

Just renew with your current lender. I was able to go to my online banking, choose the option I wanted, and fixed it for a further 4 years at 2.5%. Took about 10 mins.