How will the new mortgage rules affect me?

[mermaid101]

I'm a bit worried about how the new mortgage rules are going to affect me. I am currently on a fixed rate deal which will end next year.

I have borrowed more than 4.5 times my salary and, since signing up for this deal, have become pregnant and will soon have another child.

I have tried some on line calculators and they tell me that the amount I will be eligible to borrow is quite a bit less than I have just now.

I have never missed a payment and my credit rating is good, however my finances are tight.

I have taken some advice and have "cleaned up" my bank account.

Any advice anyone? I'm not very good/experienced with this sort of thing.

They will look at your incoming and outgoings, maybe up to 6 months bank statements. I would look at your outgoings etc and see if you can streamline them. Maybe even keeping some cash aside so they look better.

Pay off any debts overdrafts etc .

Thanks for the quick reply!
I've started doing this and it appears, on paper, I have a bit of extra money at the end of the month.

Unfortunately I'm about to go on maternity leave and will be off for about a year. My fixed rate ends in around a year. I do have enough savings to see us through, if we live very carefully.

Thanks for the quick reply!
I've started doing this and it appears, on paper, I have a bit of extra money at the end of the month.

Unfortunately I'm about to go on maternity leave and will be off for about a year. My fixed rate ends in around a year. I do have enough savings to see us through, if we live very carefully.

If you are not borrowing any more money and are just fixing a new deal with the same lender you won't be reassessed for the mortgage. They can't take it off you!
Worst case scenario you might have to stay on an SVR, but they are not too horrendous at the moment.

I would suggest that, if your mortgage defaults to the SVR at the end of the fixed rate period, you should not rush to do anything at all. SVR for existing borrowers is often a much better rate than can be achieved by new borrowers. Wait until your maternity leave has finished and then consider fixing again.

eminy I dont think that's right. We have just been through this process. We ended up moving lender for a better deal but our own lender did a full reassessment. Our bank manger told us they have been refusing existing customers as they can no longer afford their mortgage! She said they end up having to increase the term.

To OP basically we had to provide 3 months payslips and bank statements a full interview of outgoings, everything down to kids classes etc. They didn't ask about savings. It is a laborious process but it is fine if you know everything coming in & going out. I had just finished mat leave and they weren't bothered by previous years earnings just that I was back to work.

I guess it depends in the lender then. They don't do it where I work.

The end of the fixed term doesn't end the mortgage, it just reverts to a different rate - usually SVR. The bank only writes to you to offer another deal but you don't have to take it, just continue as you are until the mortgage finishes.

As panda says it will be only be an issue if you want to remortgage ie change provider or get another fixed rate. You should be able to stay with current provider on svr but that often does on mean the cheapest mortgage.