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Original poster

Please talk some sense into me

70 replies

HouseAnxiety · 28/02/2015 19:21

I am doing my own head in over this :(

House: 720,000
Deposit: 405,000
Mortgage applied for: 315,000

DH: 42,000
Me: 34,000

2 DC (childcare £300 PM but get £243 in childcare vouchers).

Mortgage applied for over 30yrs: 2yrs @ 1.18 then 4.99 for term.

We've had agreement in principle and now have paid valuation fee and some other costs to YBS totalling about 1k. I am having really bad anxiety that they will reject our mortgage.

We did use their mortgage calculator that said we could apply for up to 330K.

Do you have any experiences? How long will it take? My nerves are shot to pieces. If they reject it we lose the money :(

OP posts:
Original poster
HouseAnxiety · 28/02/2015 19:24

I know we can afford repayments as we currently save 1000 per month and have plenty of spare cash.

Problem is that we have been mortgage free for a couple of years - will this affect our credit rating?

Also we had a mortgage rejected by HSBC who said they could only give us 258K.

We could put an extra 11K into mortgage if we have to.

OP posts:
Original poster
HouseAnxiety · 28/02/2015 19:47

Has anyone had their mortgage declined after having a decision in principle?

OP posts:
brimfullofasha · 28/02/2015 19:56

No idea about your figures but yes, our mortgage was declined by HSBC after an agreement in principle. In fact, the mortgage we applied for was lower than the original agreement and it was still declined. Very frustrating. We ended up borrowing less.

Original poster
HouseAnxiety · 28/02/2015 20:06

Why do they agree a higher amount?

HSBC agreed 300k and when it came down to it said they could only lend us 258k.

That's a MASSIVE difference.

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Goodwordguide · 28/02/2015 20:08

The concern for me would be the term 30 years unless you're under 35.

Also 4.99% seems very steep for your excellent LTV, given the current dates on offer - makes it less likely they will reject you but not a great deal for you. Did you use a broker?

Goodwordguide · 28/02/2015 20:09

'Rates' on offer I mean!

Original poster
HouseAnxiety · 28/02/2015 20:17

It's a fixed term for 2 yrs at 1.18%. The 4.99 is the default rate for the rest of the time. We are under 35 (32).

OP posts:
CanISayOfHerFace · 28/02/2015 20:17

We just had a £330,000 mortgage agreed. It took ages! I think it was about 10 weeks in total but that went over the Christmas period.

It's nerve wracking!

Original poster
HouseAnxiety · 28/02/2015 20:18

Do you mind me asking if your combined salaries are similar to ours?!

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TheRestofmylifeiswaiting · 28/02/2015 20:19

This reply has been deleted

Message withdrawn at poster's request.

Original poster
HouseAnxiety · 28/02/2015 20:26

After 2ys the idea would be to fix into something else. If rates are higher than 4.9 we'd stick with it.

Payments would be: £1,672 which we could afford.

Also my salary will go up 2k this year. Potentially DH will go up 5-10K as he is preparing for headship.

They're gonna reject us aren't they? :(

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SolomanDaisy · 28/02/2015 20:27

Is your concern that you will be rejected or that you might be overstretched? I do think it sounds like a very high mortgage for your household income, personally I wouldn't be comfortable with it. If you've gone though a broker though, they will probably have a fairly realistic idea of what is likely to be approved.

CanISayOfHerFace · 28/02/2015 20:32

Our salaries are a little bit higher but we only have 80% loan to value ratio (keeping back equity to renovate) whereas yours is much better so this should put you in a strong position for approval.

Original poster
HouseAnxiety · 28/02/2015 20:36

We did originally set out with a broken who said we'd get up to 350k!

We didn't go with him in the end as he didn't offer us any better deals than we'd found online.

I'm not worried about being overstretched as we've been saving £1,100 a month for aaages. Our mortgage payments for first 2 yrs will be less than this. Each month we have around £300 to spare.

After that at the worst 1600 per month. my salary will go up 2k this year which is an extra 200 per month.

We have very little outgoings, no credit cards or debts/loans.

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Goodwordguide · 28/02/2015 20:38

Can you get out of the mortgage after 2 years with no penalty? I didn't think 30 year mortgages were encouraged unless you're very young.

You are borrowing more than 4x joint, which seems high. But the LTV is good. I don't know if you will be rejected, I would just avoid having to remortgage again in two years' time - interest rates will be higher, it will incur more fees and possibly a redemption fee. Can you not fix for longer? Remortgaging is super-stressful, I would put it off for as long as possible. We've just done it, borrowing slightly less than you but with higher incomes and it took 3 months+.

Original poster
HouseAnxiety · 28/02/2015 20:39

YBS have requested the property valuation. I am just dreading spending 1K on a valuation and then not getting a mortgage for the house.

Plus all the other charges to YBS and sols.

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Original poster
HouseAnxiety · 28/02/2015 20:40

Why would they request a valuation on the property if they haven't decided whether we can make the repayments?! It just seems WRONG!

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lavenderhoney · 28/02/2015 20:42

2 years at that rate is very good. Just be sure to move your mortage after, to another bank that's cheaper. And overpay if you can.

In two years your dc will be at school? Will you educate privately? Factor in costs long term.

Original poster
HouseAnxiety · 28/02/2015 20:45

DC are at school already. They won't go to private school.

The rate is amazing!!

We will try to overpay.

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brumeye · 28/02/2015 20:55

On affordability: 4.99% after 2 years isn't fixed though is it, it's their standard variable rate. What if base rate goes up, say to 4%, and the svr follows up to 8.5%? Can you still afford it? 30 years is a very long time to assume interest rates will stay at their current historic low.

CanISayOfHerFace · 28/02/2015 21:04

We are only fixing for two years as we are hoping to increase the value of the house considerably over the next year. Then we should have a better LTV ratio and hopefully a favourable interest rate when we remortgage (of course I understand rates are likely to have gone up by 2017).

Is there any reason why you are only fixing for two years when you can get such low fixed rates at the moment?

Original poster
HouseAnxiety · 28/02/2015 21:10

We want to do some things to the house.
Also we looked at money savings on 1.1rate over 2 yrs compared to fixing in for longer. Basically the rates would have to go up to 3 to 4 % to make it worth fixing into something for longer. I don't think rates will go up that high in 2 years. I may be mistaken. It's all a bit of a gamble!

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Goodwordguide · 28/02/2015 21:10

Yes, unless you are intending to move in two years so need the flexibility, I would fix for longer. Interest rates are only going to rise and it sounds like your mortgage could be expensive if the valuation alone is £1k. I speak from bitter experience here!

Original poster
HouseAnxiety · 28/02/2015 21:12

I didn't explain that well.

If after two years rates are still below 3% we will be better off than having fixed in for longer.

OP posts:
Goodwordguide · 28/02/2015 21:13

We've gone for a tracker - also gambling that rates won't rise quickly plus tracker mortgages are much cheaper than fixed rate - free solicitors, free valuation, no early redemption or limit on overpaying etc. But it's still a gamble.

Fingers crossed it works out for you OP, it's all very stressful!

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