Please or to access all these features

Add post

Watch this thread

Save thread

Start a new thread

Flip thread

Hide thread

My feed

Active Unanswered threads

Getting started FAQ's

Unanswered threads Acronyms Talk guidelines

Hide shortcut buttons

Talk

Money matters

Find financial and money-saving discussions including debt and pension chat on our Money forum. If you're looking for ways to make your money to go further, sign up to our Moneysaver emails here.

Flip

Original poster

Mortgage advice....

20 replies

booksandchoc · 14/10/2013 20:20

Hi all, just looking for a bit of advice as I'm not sure where I stand really.

Currently have a repayment mortgage of £38750 (ish), 35 year term with 5.99 interest rate. That's on a 4 year fixed deal due to run out December this year. I'm with Santander and I believe if I go onto their tracker mortgage my interest rate would be 4.99. The mortgage is in my name only.

I'm at college full time with only a part time job and DH only works 30 hours a week, so we don't have a great income anymore. Does anyone know what will happen with regards to remortgaging? Our credit rating isn't the best anymore either, mainly because I'm such a flake and always forgot to pay things. We don't have any defaults though.

I really want to get a decent interest rate and bring down the term.

Thanks

OP posts:

FannyFifer · 14/10/2013 20:25

Is that £387 thousand or £38 thousand.

Original poster

booksandchoc · 14/10/2013 20:30

£38 thousand

OP posts:

LordEmsworth · 14/10/2013 20:41

Santander's SVR (standard variable rate) is 4.74% so - unless your paperwork says otherwise - you'd go onto that.

If your credit's really not great, you might want to see a broker who'll be able to give you proper advice on where to get the best rate.

Or - you could go onto 4.74% for a bit, set up standing orders/direct debits for the bills so your credit rating recovers, then go for a re-mortgage with a lender who'll give you a better rate.

Your income shouldn't affect the rate you get offered - but it might limit affordability e.g. some lenders would only lend 3 x salary. Plus, you might find it difficult to get a 35 year term nowadays - so that would mean higher monthly repayments over 25 years.

It is impossible to say without a lot more info which is the right choice for you...

FannyFifer · 14/10/2013 20:52

Def go to see a broker, our 2 year fixed rate just ended so we moved to another mortgage company & got a better 2 year rate.

I'm guessing you have plenty equity in house so shouldn't be a problem remortgaging.

Your move etc have mortgage advisors.

Original poster

booksandchoc · 14/10/2013 20:56

I have to double check my paperwork for what SVR I go onto.

How long roughly do you think it would take to repair my credit rating?

I don't really want a 35 year term, ideally 20 or 25 would be the best.

It would be the affordability that would be the problem. At the moment I doubt we would even get an offer. Annual salary is only about £15k between us, although that's what my salary was when I got the original mortgage.

I guess my best bet would be to phone Santander and see where I stand really.

OP posts:

Original poster

booksandchoc · 14/10/2013 20:59

I'm guessing your in fife too fannyfifer? We only have about £12k equity so not that much really. I'm not sure I trust brokers. We got this deal through a broker and tbh it definitely wasn't the best deal for us, but we were naive and first time buyers at the time so didn't know any better.

OP posts:

FannyFifer · 14/10/2013 20:59

Some mortgage companies take tax credits, child benefit etc into account as well.

Original poster

booksandchoc · 14/10/2013 21:00

What about student loans and bursaries?

OP posts:

FannyFifer · 14/10/2013 21:01

Yup in Fife, [waves] brokers are really well regulated now.

I'm in central Fife near a town beginning with G, if u nearby can give u name etc of guy I go to.

Original poster

booksandchoc · 14/10/2013 21:04

Yep, I'm near there too. That would be appreciated. I really don't know what to do about it all, and I'm just worried ill end up getting my flat taken away!

OP posts:

LordEmsworth · 14/10/2013 21:25

MSE credit advice has more info about your credit score, which you might find helpful.

You can speak to more than one broker - just make sure they don't credit check you, as that will go on to your credit history and make you look desperate for money! That might help you feel you're not getting ripped off...

Babelange · 14/10/2013 22:33

Just wanted to add that Santander have a paperless/fairly stress free remortgaging service - surprisingly seamless despite the dreadful reputation of their banking service. When I had a mortgage with them 1999-last year at the end of each mortgage period it was straightforward to call and get a quote. Of course there's always fees to take into account. But they never asked about affordability or checked income. In fact when I tried to shop around using London & County (fee free broker online/phone), they told me to talk to current mortgage first.

Have since remortgaged with someone else - what a pain despite the low rate - took 12 weeks! Made me feel quite wistful for Santander.

Presumably you can afford what you are paying?

OP you need to get your house in order! Sort out DDs for regular payments.

Original poster

booksandchoc · 14/10/2013 22:43

I can afford what I'm paying now, never been in arrears with mortgage or loan. It's just the pesky credit cards. Got DD's set up now tho so hopefully it shouldn't be much of a problem. I've just been looking at the Santander site and they have some ok deals which I think I could switch onto no problem. So it looks like I have a few options. That means my choices are:

stay on SVR, take some time to try and repair credit rating then remortgage elsewhere.
take the gamble and move onto 2 or 5 year fixed at lower rate (3.29 or 3.79)
speak to some different brokers and see what they can do.

Positive about option 2 is the fixed term offers are fee free! We would struggle to find money for upfront fees.

OP posts:

Splatt34 · 15/10/2013 07:57

If you are currently paying 5.99% & the svr is 4.74% your repayments will go down. Obviously I appreciate your concern that if the svr goes up above 5.99% in the future it may become unaffordable but that is unlikely at the moment as far as I can tell. Investigate what else you can get but the svr itself is going to be more affordable than you currently pay. Use the difference in what you need to pay each month to help clear more costly debts. You can look to reduce your term at a later date.

debtcamel · 15/10/2013 08:49

I agree with Splatt. If you have other debts on more interest, then clearing these should be your top priority, not decreasing the mortgage term.

With not a great income a a dodgy credit rating, you aren't going to be able to remortgage at a good rate, so SAntender's SVR is what you will be paying.

Switch your credit cards to pay the minimum every month by direct debit so you can't forget. Then pick the card with the highest interest rate and overpay that one every money by a bit (or a lot!). This is called 'snowballing' and it's the fastest way to (a) clear your debts and (b) end up with a GREAT credit rating :) See debtcamel.co.uk/debt-options/snowball/

notJenkins · 15/10/2013 08:52

Don't expect the Santander to help you. They just shafted us even though we were trying to move to improve our finances. They are utter utter bastards. They don't like any bad credit at all and are totally inflexible. Not at all helpful.
I would run from the Santander very fast indeed.

martinedwards · 15/10/2013 09:14

independent mortgage shop.

definitely!

ours switches our mortgage with a phone call and then a follow up letter to sign.

we've switched lender twice in the last 10 years, and we haven't been back to the office since the first day!

debtcamel · 15/10/2013 09:31

"Don't expect the Santander to help you."

But she doesn't NEED Santander to help her. The transition from fixed rate ending to their SVR will be automatic, they won't credit check her, they can't stop it.

And with a low income, poor credit she isn't going to get other offers so she will be wasting her time.

One other thought, do you have a Santander current account? because if you do, you get 1% cashback on your mortgage payments - see doshandnosh.com/2013/09/santander-123/ and the comments on the end of the post.

Babelange · 15/10/2013 22:14

I just wanted to add that oftentimes there are better rates for current customers before your mortgage rate expires - they can sometimes shave a few points off to retain your customer so it's worth a punt ie a phonecall to the call centre.

I couldn't believe how intrusive the paperwork was for the people we wanted to remortgage with - they wanted to see our pension documentation too as well as payslips and we had to have a surveyor round. It was a good rate though so worth the protracted process (2.99).

Are you sure about your credit rating? Just wondered if you had actually checked.

holidaysarenice · 21/10/2013 12:35

I would find out if you automatically move to svr and take independent advice.

You may be better on their svr and paying that rather than trying a new mortgage.
Once u tell them ur circumstances have changed they will want u to reapply.

Flip