Mortgage anxiety!

[Independant]

In the process of buying our forever home but cannot shake the awful anxiety sorting the mortgage has brought me!

We currently mortgage with Santander and are in a fixed rate which will cost us £6k to exit early so we are porting our current deal onto our next property.

We got an AIP with them and now just need to ring them up and go through the application process (can’t face the thought of doing this by myself online - too scary!)

We need to borrow an additional 80k as a top up which is what is scaring me the most. My brain is just full of what ifs ?!

We both have good credit rating and have always paid mortgage on time.

We’ve got a couple of outstanding loans and Credit Card balances but we are paying these off with the remaining equity from our house sale.

We are putting down 25% “deposit” on the next house out of our equity from the sale of our house.

There’s nothing I can think off that is a red flag in terms of us borrowing more but I just have this awful anxiety I can’t shake. I suppose I’m just trying not to get excited as know that if the mortgage application is rejected we will lose the lovely house.

Has anyone else been through this?
We’ve mortgaged with Santander for 4 years and they’ve been great throughout and never had any problems at all, so hoping as we are existing customers it’ll be quite straightforward but I’ve learnt to expect the unexpected in life!

From a personal perspective I would be concerned that you racked up loans and credit card debt on presumably lower outgoings than you'll have once you have your new mortgage, regardless of wherever the bank will lend you more.

Bigger houses (though you don't say that it's bigger, assuming it is!) are also more expensive to run.

Are you comfortable with tightening your belt all round?

@Ratherly since taking out the loan our combined income has increased by £800 a month.

Credit card bill is due to paying for an Unforeseen boiler replacement, annoyingly!

House is no bigger than what we are in. We are moving from 3 bed to 3 bed.

X

Sounds like you've done your sums!

We were in a similar position a few years ago, increased our mortgage considerably - the amount of debt makes me shudder but the monthly payments are affordable, and unexpected promotions and pay rises have meant we've been overpaying quite a bit.

I don't regret it, planning to stay for 15-29 years, but I'd be lying if I said the outstanding amount doesn't concern me still!

I've just been through this process with Santander, which was very thorough.

Santander told me that they are very strict with regard to outstanding debts, which brings down amount they are willing to lend. I didn't have any debt, however they mentioned this in my initial conversation with the mortgage adviser. Make sure to tell Santander that you will be paying off the debt on completion when you speak to the mortgage adviser so that they discount it from the affordability calculation. They may make it a condition of your mortgage offer though.

In terms of the amount they lend, this will depend on your current earnings and LTV required. 25% is a healthy equity:debt ratio as Santander will be most concerned about whether they can sell the house quickly for the outstanding mortgage should they need to.

In my case, I'm buying on my own and adding an extra £200k for my new mortgage than was on my previous joint mortgage, so £80k more jointly doesn't sound to me like a huge stretch, especially as you are also earning more.

Another thing Santander did was stress test on whether I could afford mortgage payments at 6%, instead of the 1.5% of my current product. A poster on here explained to me the methodology behind it, which is about future predictions on interest rates, so I'd do those kinds of sums myself to work out if it's doable.

Good luck with your application. Despite having to go through all the above, it's a reasonably straightforward process, given you are borrowing a huge sum of money.

@Starseeking thank you! Nice to hear from someone who has had a recent experience.

Will deffo let them know about our plans to pay off the debts with the left over equity from our sale - I wouldn’t have thought to do that so thank you for that pointer!

*a recent experience with Santander !