Remortgaging when out of work

revs

Hi,

I would be grateful if someone could take a look at my current remortgage deal and advise whether I've taken the right route.

My situation:

Age: 34
Out of work for the last 2 years (not claiming any benefits)
Partners Salary £27,500 (we're getting married this year)
Cash in Bank £93,000
No debt (apart from mortgage)
No source of income for me
Mortgage: £187,000
Value of Property: £250,000-£280,000

I'm in the process of setting up an ecommerce business at the moment and I'm aware that it may not be profitable for some time.
We're getting married this year and plan on having our first child asap.

Our mortgage is split into two parts:
Mortgage 1: £163,000 @ 2.85% (end date June 2012)
Mortgage 2: £24,000 @ 5.59% (end date July 2013)

Mortgage 1 is due to end in June (rises to 4.24%) so I thought I'd phone Santander and see what options they could offer me and here they are:

2 year fixed @ 3.99% (£624 fee)
3 year fixed @ 4.49% (£125 fee)
5 year fixed @ 4.99% (£125 fee)

I have the option of adding mortgage 2 into the deal but with an early repayment charge of £395.00 which I guess it relative to the reduction in rates from 5.59% to 3.99%.

We do intend to make overpayments of £600-£700 per month up until the point when we can't afford to (when we have a kid)

I've selected the two year fixed at 3.99%, combining the two loans together, over a 23 year term. This gives us an approx £1036 per month mortgage payment with the option of making overpayments.

Are there any other options I should have explored or have I made a sensible choice?

Thanks

dimbo61

The words " having a baby/child ASAP" come to mind and if you work everything just right your wife could be on maternity leave just when you want to remortgage!!!!!
Good Luck with the new venture

getmore4less

First check adding the 2nd part
£24000 @ 5.59% over 23years is £155pm left June 2013 £23,330.44
£24395 @ 3.99% paying £155pm left June 2013 £23,260.53

So thats worth doing if you change now if its over 13months
£23,422.43
£23,415.08
break even then start saving for a year.

now the main mortgage
£163000 4.24% 23 years £926pm in 2 years £154,248.00
£163624 3.99% paying £926pm in 2 years £154,097.98

So you save around £150 with the change. whats the follow on the 2 years?

Reality is no other lender is going to offer anything.

What are the offers going to be in 2 years time when the fix is up, will you be stuck with the followon.

what rate are you getting on the savings?

revs

Thanks for the feedback.

Can I not remortgage with Santander after the 2 year fixed rate period? I'm not sure what the rate will be after the 2 years - should I check that out before I proceed?

My savings are quite complicated - I swop between shares/horseracing. Forgot to add I'm a professional gambler but for most of the year my money is invested in large ftse income generating companies. I return on average between 8-10% - but obviously this can fluctuate.

Thanks

Thrugelmir

Difficult to offer advice, as would appear judgemental.

All I would say is if you intend having a family then you need to rethink your plans. As odds on there's a big cliff ahead of you somewhere down the line.