Anyone ever NOT been able to renew their mortgage?

[HalyardHitch]

We're in the position that we can afford to pay our mortgage relatively comfortably (although admittedly our belts are tightened).

However upon talking to the bank, we are going to fail all affordability checks and our renewal won't be granted.

I've been here nine years and my ltv is more than 50%.

We have a fair amount of income that the bank have discounted even though they have admitted they know we are ok, its just a case of "cant be done"

We're likely to be in this situation for another four years

Can you switch provider?

Have you checked your credit scores?

I'd go to a broker.

Try another lender. Or go to a broker and see what you can get. If your current lender doesn't want your business, there will be others who do and you might even be able to get a better deal.

Have you looked at remortgaging with another provider? Possibly see a broker or financial adviser who can shop around for you?

We change our mortgage provider every two years to get a better fixed term rate.

I went straight to my mortgage provider and they said no. My broker (who is independent, charges no commission and I've seen since I first had my mortgage) said he could get a mortgage for 40k for us. We need about 115k.

Credit scores are all fine. We have a little debt but a lot of income that can be counted. Eg self employed income for a new business, student loan and my previous two years income are both very low as I've had two back to back.maternity leaves.

We're financially absolutely fine. We dont have much in savings but always have a couple of months money ahead of us

We went to renew a few years ago now after our fixed term ended. The length of mortgage we needed, despite being the same as the original length less than the 5 yrs we had just completed, the bank said that we couldn't get that length anymore as my husbands age would be 63 (I would be 51) and their policy now was to presume he'd retire at 60. His projected pension is tiny right now - but that's because he's on a final salary pension and until he's served 30 years it won't show the 'real' amount. He won't be retiring at 60 because he won't have 30 years at that point so fully intends to work until he qualifies.

We decided to leave it for a bit - our interest rate had dropped to 2% above Bank of England rate, so was ridiculously low - and it's really benefited us as we've now had close to 5 years at less than 3% interest compared to around 6% previously! Unfortunately, I've just been told I am displaced at work in a re-org so am looking at redundancy. Things are also tight and whilst we can afford the mortgage (hell, we've been paying it for this long!) I know we'd fail any credit checks even if we didn't have the redundancy to consider.

So the only advice I can give is that your lender can't recall the mortgage payment early - it's just that you can't tie in to a new deal. This may work out better if you are on a decent variable rate following the end of your fixed term. Maybe then when/if interest rates start to rise, your situation will have changed and you'll be able to get the mortgage deal you want again.

Good luck!

Thanks. I guess we just need to see what happens when the time comes. The uncertainty is pretty scary

How does your broker only think you'd get £40k, thats like an income of £10k if a lender would lend you 4x you salary.

How much do you earn? Why are they discounting some of the incomes?

Rough figures....

11k student loan (discounted)
11k employed income. Discounted as no longer in job.
5k self employed income. Discounted (as this business is now closing)
10k projected self employed income for new business. Discounted. Obviously as it's projected income.
4k self employed income (due to maternity leave and then pt working)
4k tax credits
2k support from a parent

Total allowable income approx 8k.
Plus debts of approx 11k

It's annoyingly complex. We're comfortable enough but most of our income isn't counted. We keep our expenses low but obviously the bank dont like us.

No opportunity for either of us to be employed as DH's new industry works on a self employed basis (think hairdresser hiring a chair) and if I got an evening job I'd earn little more for x3 the hours. I can't do that AND look after my toddlers on my own for 12/14 days. I'd burn out.

It just seems so hopeless and impossible

We own approximately 60% of the property

When you say you can't renew, do you mean you can't switch to a new deal with your current lender or you have come to the end of your actual mortgage term?

X

I can understand why most of that income is disregarded though. Student loan will come to an end when you stop studying with no guarantee of employment to follow. Tax credits could reduce at any time depending on government policy, income from relatives could end if your relative fell on hard times themselves surely ? very little of your income is long term reliable income.

Good news for you- www.fca.org.uk/publications/consultation-papers/cp19-14-mortgage-customers-proposed-changes-responsible-lending-rules-and-guidance

Interestingly the tax credits is allowable income.

We're coming to the end of our fixed interest period. We would like to fix for another five years if possible.

I'd prefer if we don't pay.hundreds per month more in interest. We don't have that kind of spare money.

Yes our income is reliable but there are always ways to earn money when you're self employed. We've both been self employed for years and have always survived. Sometimes with very little money, sometimes with loads

I'll take a look at the link, thanks.

A credit check and affordability check isn't normally done when it comes to getting a new deal with the same provider. That is unless you have had arrears or are on interest only and you have no repayment vehicle.

As PP said, we were able to move onto a new fixed deal when our 5 year fixed was about to end, without any checks or anything.

Which of you is self employed? Can you register as a limited company and make yourself an employee and inflate the salary until you can provide 3 months of pay slips? E.g. pay yourself 3k per month for 3 months but then nothing thereafter?

Alternatively could one of you get a job for same?

Hang on if you have both been self employed for years don’t you have 3 years worth of accounts showing income of more than 5k? No need to project future income quite so truthfully if your past accounts show higher earnings. Or to share that the first self employed business is closing.