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Original poster

Remortgaging on a lower income

16 replies

lightgreenglass · 27/04/2016 22:50

We're due to remortgage next year and I am already having heart palpitations about it.

So either when we remortgage I will be a SAHM so I won't have a salary to contribute to the mortgage or I'll still be working but my income covers childcare in its entirety.

Will our lender let us remortgage or will we have to go on the SVR? The repayments are not an issue if we get a new decent rate and we've been with this lender for 4 years now but in terms of multiples our mortgage is approx 4.8 times DH salary. Also even if I was working would they count my salary as its all going on childcare?

The repayment per month for SVR would mean we would be living month to month most likely. Sad

OP posts:
MovingOnUpMovingOnOut · 27/04/2016 22:56

If you stay with your current lender you usually just ask for a new rate and they make you an offer. No need to even discuss income.

Ireallydontseewhy · 30/04/2016 09:26

That's interesting movingon - i thought when the new rules (mmr) were introduced, it did cause people problems and some had to go on the svr even though they'd been able to afford the lower rate on their mortgage previously. Maybe it varies between lenders?

Eminybob · 30/04/2016 09:37

Who is your owner op?

Eminybob · 30/04/2016 09:38

Lender that was supposed to sayBlush

MovingOnUpMovingOnOut · 30/04/2016 10:35

Only if you want to borrow more Ireally. Otherwise it's just a rate change and if it's lower than SVR then it's automatically more affordable.

BeautifulMaudOHara · 30/04/2016 10:37

It is easier to stay with your existing lender - if you shop around you will have to answer affordability questions

Ireallydontseewhy · 30/04/2016 11:07

I see - so do you technically get a new mortgage from the existing lender? or do you ask the existing lender to change the rate on your current mortgage once you get to the end of the period and go onto svr? And do they revalue the house - i seem to remember people on mn explaining that rising house prices benefit them because they can get a lower rate on the next 'remortgage'.

MovingOnUpMovingOnOut · 30/04/2016 11:33

No it's not a new mortgage. It's just the rate change. No extra borrowing, no change in term.

You ask them to make you an offer for the new rate about 3 months before the end of the current deal.

The lender knows it will cost them money if they lose you so they want to retain the customer. Hence the offer. BUT they won't know your circumstances have changed and you can't go elsewhere unless you have defaulted on payments. Unfairly some of those people do get stuck on SVR.

The only time they would revalue the house would be if you were enquiring about borrowing more money. We did this for our old house but because we had 51% LTV and an interest only mortgage we came a cropper on the new regs and couldn't borrow the extra £50k we wanted to extend. Luckily we could get permission to rent it out and buy a second property in a cheaper area to live in and put down the rest of the money we had for the extension as the deposit. Ironically we now have an extra £250k of mortgage borrowing because the new regs said we couldn't borrow the extra £50k(!) Bonkers.

witsender · 30/04/2016 17:41

I was told that the Halifax would run affordability etc if I remortgaged.

RNBrie · 30/04/2016 17:51

We remortgaged with the same provider (Nationwide) in December, I did it on line, no questions asked about income or anything and the decision was immediate. So I think it probably depends on the company.

Ireallydontseewhy · 30/04/2016 18:13

Aha - very interesting. Does anyone know how the 'big' banks do it - do they run affordability? I suppose it may also depend how much you've borrowed - maybe a £1mn mortgage gets more attenrion than 100k!

mamapants · 30/04/2016 18:19

I did it online with Halifax about a month ago, no questions asked.

MovingOnUpMovingOnOut · 30/04/2016 19:56

Remortgaging is not the same as changing your product/rate.

Fwiw we were Santander who have an enormous share of the mortgage market.

Original poster
lightgreenglass · 30/04/2016 22:15

I am with TSB. Last time I moved to a different rate, so not remortgaging, they did say they wanted proof of one aspect of our earnings and DH's pension as the term went into his pension years as the new rate started a month after our old rate. This was for a rate which was less than what we were paying previous, hence the reason why I am bricking it for when I go back and ask for a new rate. On top of that, they never sent us a new offer - I had to ask them for an 'offer' which they made us go through an affordability check and 5 hours on the phone. Additionally, when I wanted to book an appointment to go into branch to switch rates they said they couldn't give me an appointment till 28 days before our rate was due to end so that gave us very little time to switch over.

OP posts:
Original poster
lightgreenglass · 30/04/2016 22:20

To add, we have never ever defaulted on any payments on anything, our credit scores are immaculate.

OP posts:
MovingOnUpMovingOnOut · 30/04/2016 22:33

I've never had a new offer when changing rate. It's always been about changing the product only, not the mortgage.

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