mortgage advice needed please

malibusami86

hi guys, i've just posted loan part of this query on loans board, thought best to post mortgage query on here too. hope thats ok.

basically my situation is this

we have been on the market a while & we've seen a house we want to buy. we're starting to get more interest on our property and have a 2nd viewing this week.
Hubby & i decided it was time to contact our current mortgage company to work out what was the lowest offer we could accept.... Turns out that because i recently left my job due to ill health during pregnancy they couldnt even lend us what we already owe?!?

We borrowed £100k 4.5 years ago and paid £35k deposit. Our house is currently on sale for £130k but the house we want to buy is £150k.
We wanted to extend our mortgage £20k and would find all of the fees ourselves.

My wages were just extra cash, they paid for birthdays, christmas, holidays and savings etc. With hubbys wage we pay mortgage, bills, food shopping etc. So we're not going to be hard up, just tighten purse strings. Its completely doable.

Our mortgage repayments have approx £96k left, we paid until November £550 per month on a fixed term contract, this ended and in December our payments dropped down to around £360 per month so we know that we can afford to add around £150ish per month onto our mortgage repayments without even feeling the pince. We thought this would all be fine.

But due to calculations on their system our current provider could only lend us £80k which is less than we already owe. This would force us to stay in our current property.

My hubby earns £18 pretax btw

Our mortgage provider is a high street building society, very reputable and had the best deal when we remortgaged over 2 years ago.

Will i find this situation wherever we contact or is there hope? The other possible situation we want to enquire about is if we cant extend a mortgage to be able to move, would anyone lend us £15k max to extend our house or will they say we cant afford repayments even though we know we can. Like i said we can afford £150 more per month due to our mortgage decreasing.

Im a bit lost with this, never had credit, store cards, loans anything other than a mortgage and im not well enough at the minute to trapse around banks speaking to numerous people. I just really need some advice so i know what our options are.

thanks so much :A

beecher2

So you want to borrow £116 on an income of £18k? Just isn't going to happen I'm afraid . You're basing affordability on a base rate of 0.5% - rates will go up, and you simply wouldn't be able to afford it. You need to drastically change your plans - even a mortgage of £80k would be pushing it once rates go up again when your income is only 18k.

I don't know if you could get a loan for 15k, but make sure you factor in base rates, and your SVR increasing.

malibusami86

thanks Beecher, yep thats what i concluded tbh, just wanted to get advice from people that know more than me.

any more hope out there?

herbiesjp

You need a plan B.

Unless you have got a second income, you are not going to get the mortgage amount you are looking at.

Affordability is based on various factors i.e. income, LTV, debts, children, specific pay rate applied by the lender, etc.

Who is your current lender?

Burridge60

malibusami86 wrote: »

.....My wages were just extra cash, they paid for birthdays, Christmas, holidays and savings etc...........

How will you meet these in the future they are as much a part of your budget as your Gas, Electric, Water, Sewage and Food.

If you borrow money in addition to your new mortgage you should tell your lender as this would affect affordability when considering your mortgage application. It would also put a big hole in your own budget.

Sadly so many people could not now borrow what they owe on their current home. But everyone enjoyed blaming the banks for being cavalier and now that they aren't any more we like it even less!

If you use one of the mortgage cost estimators on the site and use a rate of say 5.75% for your mortgage this will show you what your mortgage "might" cost in the future.

Lenders variable rates were as high as 7.75% and more before the drastic reductions in the BoE base rate.

malibusami86

thanks herbiesjp

plan b is the loan to extend our kitchen and dining room out

plan c is just to use some savings to do some adjusting to make the best of what we've got, ie in kitchen, change cupboard doors, new worktops, new floor, replaster over artex ceiling in dining room, more gravel over drive etc etc. hubby also wants to build outhouse at bottom of the garden for tools as we dont have a garage.

so we do have options. but after being on the market for 4 months and trying really hard to sell & find house we want seems such a shame to throw the towel in and pull off the market at this stage.

we were on two years ago and when we finally got an offer we couldnt get mortgage as hubby just been made redundant so had to pull out and were gutted. just as we thought we were sorted this time, i had to leave work =(

i think it must be happening for a reason though