would we get a mortgage on a low income?

marrbett

My husband and I have a mortgage of about £90,000 with C&G (house is worth £200,000)which is part endowment,part repayment.We have filled our small house up with children(!) and need to have a bigger house,but our finances have changed.
We now only have an income ,including tax-credits of about £15,000 and have about 18 years left to repay of our mortgage.
If we could find somewhere cheaper to buy,would we be able to get a mortgage for a new house for a similar amount of money,ie £90,000-which we have been affording and can continue to afford or would we get turned down as our income doesn't qualify for that amount?
Thanks for any advice

herbiesjp

Are you tied in to C&G?

Have you approached C&G to see if they can help?

AndrewSmith

6 times joint income including tax credits, rising interest rates, slowing housing market,

I think it would be incredibly difficult to place, or to justify as 'best advice'

Leon_W

In all probability your mortgage with C&G is portable. So why not port the mortgage you have to another property ? You release a bit of cash and keep the same loan.

It really makes no odds to a lender if you move a mortgage to another property because their exposure to you, as the borrower, is the same. If you default on it in a £500,000 or a £150,000 house makes no difference as in either case you'll get repossesed and they'll get there money back !

Have a word with C&G as I honestly can't see any other lender doing it.

AndrewSmith

Portability is still subject to underwriting, credit score, income verification etc. Just because you have that amount of mortgage now does not in any way guarantee that you will be accepted for the same loan on a new property.

Rememer that it is not the actual mortgage that is ported, merely the remaining terms and conditions of your current deal.

It is still subject to full underwriting and stands the same chance of being declined as it does with any other lender. Portability is never a foregone conclusion.

Leon_W

Don't disagree with that Andrew. But as we know, some companies will take a view, and agree it anyway.

C&G, in my experience are one of the more approachable lenders in that respect.

kenshaz

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marrbett

Not at all simplistic Kenshaz-we've looked into getting the loft converted but apparently our roof is too low(!!) and there's not much room on the side of the house for an extension.That just leaves the back of the house to extend onto,which is probably mega bucks and loses us the little garden that we have. I guess we may have to consider a conservatory and use that as our lounge and change our existing lounge into a bedroom,but that's not ideal.
I'll try the C&G out and see how amenable they would be to keeping our custom but letting us move house.Wish me luck!! Thanks everyone.

Leon_W

Why did kenshaz edit his post and just put a stupid link in ? The point he made was actually quite valid.

Anyway, marbett, you do not say how old you are, but would it make a difference if the part of your mortgage which is on repayment at the moment went to interest only ?

It might help financially at this point in time with a view to going back to repayment at some point in the future ?.

I should know how expensive kids are !. I took this route with my own mortgage as it allows me to support the family while the wife is on maternity. I will simply switch to a repayment later when the little brats are less demanding !!

marrbett

Have finally got around to seeing the c&g man and have heard today that the underwriters have agreed to us being able to move as long as we don't ask for more than we already have with them.It turns out we owe 86,000-term remaining is about 18 years:(
We have decided to surrender one of the endowment policies (which should give us back what we have paid into it,about £9000)and to take that amount off the mortgage and switch it to a repayment mortgage only,this brings the cost down to that of the existing mortgage, taking extra life cover into account.
So our mortgage will be around £77,000 and we need to fix it for as long as possible.How long does it take to get the cash when surrendering a policy-should we use our savings money and pay it off the mortgage immediately in order to grab a fixed-rate before they go up,or is that not a good idea?Should we fix the rate now on the existing mortgage and do all the jiggery-poking of it at a later date(will we incur more charges?)Sorry,should have asked c&g man all this but didn't think to at the time!
Many thanks.