Remortgage worries...what would you do?

[ChaffyMcChaff]

Hi, I'm in a bit of a quandary! My current mortgage is interest only (I know! Not great!), but it was the only way I could afford a house after divorce. I have 'overpaid' each month for the past 4 years, so the balance is coming down but obviously not as much as it would with a repayment mortgage.

I've recently applied to remortgage and had an offer for a repayment mortgage...this of course means that the monthly payment will increase by over £300. I'm aware that this would be a better product to pay off the balance.

Here is my problem...I've just been informed that my job (temporary contract) will not be made permanent, which I was initially led to believe would be the case. The contract will end at Christmas and I know that I will struggle to find something quickly at the same salary. I'm on my own and have no savings...my divorce was due to ex'D' H having a gambling issue and unfortunately this left me liable to half his bad debts.

I'm currently in the 7 day cooling-off period before having to sign the mortgage contract. What would you do in this situation?

Go and see a professional broker. If you have debts it will knock your affordability. An experienced broker will know which lenders are likely to lend or not based on your current employment issues etc.

Good luck!

And you must disclose the material fact about your contract. Did your current lender offer on this basis?

Thanks...I don't have any debts apart from a car loan. Just no savings anymore so all I have is my monthly wage. Yes, they had my contract letter...I've been in the same job for the last 3 and a half years, and every year the contract has been renewed...I had no inkling that this year would be any different to be fair 😢 I'm gutted of course! With only 5 days left on the 7-day cooling off period, I need to make a decision quickly. I'm working full time this week so no time to see a FA before that decision has to be made unfortunately. Really struggling with this 😨

Where abouts are you based? Some brokers will conduct everything over the telephone, even if its to say yes, what you're doing is the best you can do at the present time.

No advice but just wanted to say that I wish you all the best, OP, as this sounds a tricky situation.

Can you stick with the interest only for now. When does the term end? want the flexibility of overpaying like you are, but cutting that back if things are financially difficult.

Check contract law too. More than two years and you are classed as an employee and not a contractor. So while it might not change their decision it should mean you get a tiny severance package.

On the mortgage offer, what date does it state the offer is valid to? All lenders vary, but it's common to have offers valid for 1 to 3 months.

The 7 days is your right to reflection, but you don't have to accept immediately if the offer is valid for a longer period of time, which may give you some breathing space to think and get advice.

Can you start looking for a new job now? Rather than wait till the contract has ended.

@IwantalltheDogs the offer is valid until 30th December, I just checked (thanks for that...I hadn't realised before...I thought I had to accept or decline this week!). So realistically I can just not sign this week and keep my fingers crossed that I get something new by December??? I will of course be looking for work now, and if something comes up will take it straight away...I only have to give two weeks notice. Fingers crossed then 🤞

@travailtotravel I've been told I will get one weeks severance pay...better than a kick in the teeth I guess 🤷‍♀️

Can you look for work before December? Are you tied into that contract?

One week severance doesn’t seem right. Check with Acas re your specific circumstances but I always thought that long-term fixed terms over the 2 years effectively make you a permanent employee.

Yes I can (and will) look for work before December. I have to give 2 weeks notice that's all. I'm not sure it will be easy to find something that pays what I'm earning now though...I can hope 😊 I've been on the job sites this morning and there are temporary jobs that I can apply for but nothing permanent. And none at the rate I'm getting now...😢.

I'm best staying on the interest only for now I guess and overpaying as I'm currently doing. I'd be tied in for the first 5 years on the new mortgage (would incur pretty hefty penalties if I changed before then!). Bum!