Re-mortgage time... less pay, or... no job!

spaceford

I am on a five year fixed interest only mortgage. I got it about a month before 2008 when the economy crashed, so now I'm lumbered with a pretty high interest rate!
Anyway, at the time, I had a stable, regular income from a full time job.
However, in the last year, due to the economy, my position has become flexi, and thus, lower paid.
I recently tried to re-mortgage to get a better rate, however, despite confidence of my mortage advisor, the underwriters dismissed the application instantly!

What I'm worried about, is what happens in a year and a half when I HAVE to re-mortgage? If I don't have a new job that pays more, do I lose the house? I'm doing freelance work now too, but that's not going to help, because don't you need at least 3 years worth of good accounts?

Thrugelmir

Hi,

Your existing mortgage will default onto your lenders SVR (standard variable rate) at the end of the term. Without any credit checks or income declarations you'll be able to choose another product from your existing lender as well.

What plans do you have for repaying your mortgage? As at the end of your mortgage contract term you'll be required to repay the outstanding debt.

shortchanged_2

You will go onto the lenders SVR I would assume.

Also have you got a repayment vehicle in place for your IO mortgage?

spaceford

Thanks for replies.

I don't think I have a repayment plan! Isn't that the point of interest only? You just pay the interest and there is no repayment?
I think we just got whatever mortgage we could to start off and we'd see where we were at 5 years later and then work out repayment plan.
In the end, if it looks like you can't repay, you sell up, right?

shortchanged_2

spaceford wrote: »

Thanks for replies.

I don't think I have a repayment plan! Isn't that the point of interest only? You just pay the interest and there is no repayment?
I think we just got whatever mortgage we could to start off and we'd see where we were at 5 years later and then work out repayment plan.
In the end, if it looks like you can't repay, you sell up, right?

Over to you Thrugelmir. :eek:

nathan1986

I don't think I have a repayment plan! Isn't that the point of interest only? You just pay the interest and there is no repayment?
I think we just got whatever mortgage we could to start off and we'd see where we were at 5 years later and then work out repayment plan.
In the end, if it looks like you can't repay, you sell up, right?

What are you going to do if your in negative equity? Considering you bought a month before the market crashed there is a good chance your property is worth less now than it was then i would have thought?

Im no expert, unless im missing something huge, I think your playing a risky game.

Nathan