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Original poster

Re-mortgaging with only one salary?

60 replies

Kerelene · 13/05/2008 15:02

Hope this is the right place to post this

I am soon to be made redundant and am expecting my 2nd baby in November. Will probably claim benefits until then as have not found any jobs to apply for so far which pay more than benefit (after paying for childcare and travel).

I hope to claim maternity allowance for 9 months after baby's birth and then try and find a new job (which pays enough to cover childcare for 2 kids etc...)

It's just occurred to me that we will need to re-mortgage in May next year. Will we be able to get a mortgage on only my husband's (modest) salary? I am really worried that we might lose our flat which we only bought a year ago, with interest rates going up as well, but I don't want to start looking for work when I've a small baby just so we can get a mortgage...

Any advice/thoughts very welcome

Thanks

OP posts:
CountessDracula · 22/05/2008 16:07

I don't think they would, no

CountessDracula · 22/05/2008 16:07

You could call them and ask
Without giving your name

CountessDracula · 22/05/2008 16:07

in fact I will call them now

MegBusset · 22/05/2008 16:09

Depends what rate your savings are paying interest at. If you have a savings acct paying less than you're paying on your mortgage then it makes more sense to put that money into the mortgage.

Can't remember if we had to re-declare income when we got our remortgage offer from Nationwide. Our situation is slightly different though as we have a smaller LTV and DH's income is higher.

People who have interest-only mortgages as a long-term strategy are mad (imvho).

noddyholder · 22/05/2008 16:09

You need a current valuation to calculate your equity A friend of mine was getting a remortgage for a kitchen extension and her estimate as to what her house is worth was way out so be careful.

CountessDracula · 22/05/2008 16:10

god their hold music is awful

Original poster
Kerelene · 22/05/2008 16:11

Meg it's good to know that Nationwide let you re-mortgage and that you even got a mortgage from another lender despite having a lower income.

I think we may have to consider moving out of London and looking for work in another town.

We do have some savings but we try to add to them (we were hoping to build up deposit for a bigger home!!) I would be galled to have to dip into them just to give more money to the bank but we may have to do that - or go for the repayment/interest only combined which looks like a good bet.

I don't want to stay out of work but it looks as if it might cost more to work than not to with 2 kids to pay for in childcare. (or 1 and a bit once DC1 starts school)

OP posts:
noddyholder · 22/05/2008 16:16

Could you sell and rent for a while until things are easier/clearer?

MegBusset · 22/05/2008 16:16

Another option if you have a big pile of savings is to look for an offset mortgage, it's what we got from FD.

CountessDracula · 22/05/2008 16:16

hmm
had to give up sorry!

Original poster
Kerelene · 22/05/2008 16:17

CD that's v kind of you to call them for me!!!

Does anyone know of any websites etc where you can get an idea of your flat's value - I can;t imagine ours has gone up or down much in just a year though?

Meg - if our savings are paying at a lower interest rate than we're paying on the mortgage and we therefore decide to overpay to reduce the mortgage loan, what happens if the value of the flat goes down? Does that mean we've lost that money? No hang on - the amount of the mortgage stays the same doesn't it even if the value goes down - oh dear I am getting confused!!
Or if we need the money back for something - can we then underpay to get it back? Presumably only as long as we're with the same lender?

OP posts:
noddyholder · 22/05/2008 16:22

Just either ring the agent you bought it with or look on rightmove for similar although rightmove is hit and miss as they are asking prices.

Original poster
Kerelene · 22/05/2008 16:24

Thanks for trying CD!

I wouldn't want to sell and rent as I've heard worrying stories about people who've done that and been ripped off, also my worry is that things might get harder rather than easier, thankfully I think it won;t come to that.

Will look into offset mortgages

We still have another year till fixed rate expires, I am just planning ahead because of wondering whether I should try and get a job now before baby comes or wait till after mat leave, but I don't really want the stress of a new job whilst getting more pregnant, if I'm earning less than I would on the dole after paying the childcare!

Plus there's the whole thing of starting a new job and then explaining you'll only be there 4 months then going on mat leave!!

Maybe I should try and get agency/freelance work then when it comes to re-mortgaging I can argue that this is what I earned last year and I will prob earn the same again once mat leave ends - do you think new lenders would be persuaded?!

OP posts:
noddyholder · 22/05/2008 16:27

How did they get ripped off?We sold and have been renting since september and it makes looking to buy and negotiating easier.The flat we rent is 950 a month if we bought it at current rates the mortgage would be 1400 so renting cheaper atm

MegBusset · 22/05/2008 16:54

Anything you overpay on your mortgage goes on your capital, not interest payments. So the more you overpay, the less you will end up paying in interest. If you stick with Nationwide then you would be able to underpay by that amount in future. If you changed lender then that wouldn't apply but obviously the amount you need to borrow would be lower.

MegBusset · 22/05/2008 16:56

For freelance/self-employed earnings then new lenders normally require three years of audited accounts before they will take it into consideration.

There are self-certification mortgages but I have no idea how readily available they are these days, or what kind of rates they offer.

ScotsLassDownSouth · 22/05/2008 17:05

Kerelene

We got a new deal with the Nationwide last week (we were Portman customers - they were taken over by Nationwide last year) and they didn't ask any questions about our income. We went in armed with payslips and bank statements but the lady didn't want to know.

Original poster
Kerelene · 23/05/2008 12:24

Thanks for the tips and info everyone - at least I have some ideas and possible solutions now.
I guess we can't get away from the fact that interest rates are likely to keep going up so we will inevitably end up having to pay more somehow.

OP posts:
Original poster
Kerelene · 23/05/2008 12:27

Noddy I thought you meant sell your own flat to a company who then rent it back to you. I heard on moneybox or similar programme that many people did that thinking they could buy their home back once their situation improved but the new owner would put rent up after a few months or sell to somebody else.

OP posts:
TheDevilWearsPrimark · 23/05/2008 12:28

Could you possibly take a mortgage holiday for 6 months or a year around your maternity leave?
You could then put the money (or some) you would have paid to your mortgage in a high interest savings account. A few of my friends have done so and it really helped them.

MegBusset · 23/05/2008 12:42

"Noddy I thought you meant sell your own flat to a company who then rent it back to you."

This kind of scheme should be avoided at all costs, it's basically unscrupulous investors looking to make a quick buck at the cost of people struggling with their mortgages, by buying the property at a knock-down rate.

What I'm sure Noddy meant is selling your flat and moving into rented accommodation, putting your equity into the bank so you will be in a good position to buy once prices have settled. There are disadvantages to this, though, particularly if you don't have loads of equity so a fair slice of it will be eaten up by fees. And there's no guarantee you will be able to get back on the property ladder.

LadyOfWaffle · 23/05/2008 12:45

Skipped from OP so undsure if it's been suggested but could you go onto intrest only for a while? Or even talk to mortgage company and extend the time period of your mortgage for a while, so the payments are lower but in a few years change it back again?

noddyholder · 23/05/2008 12:49

Thanks meg b that is what i meant.The other 'scheme' is horrendous- sharks!

ConnorTraceptive · 23/05/2008 12:49

This reply has been deleted

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Cappuccino · 23/05/2008 12:52

has anyone said anything about tax credits yet?

when we remortgaged because I was freelance and it would have been faffy to do proof of income, my tax credits got taken into account and it made enough

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