switching to repayment morgage

carlos700

We had a repayment morgage but when i had second child childcare was going to be to expensive for me to go back to work so i handed my notice in to stay at home with children.I rang our morgage company to enquire about switching to an interest only morgage but was quite surprised when she said i will do it now for you over the phone it saves us around £200 a month .We are now wanting to switch back to a repayment even though i am still not going back to work my worry is now is it just as easy to switch back will they just do it again over the phone.When i switch from repayment to interest only they did not ask for any income details but because a repayment is going to be more money a month do you think they will ask for income details.

JoeK_3

carlos700 wrote: »

We had a repayment morgage but when i had second child childcare was going to be to expensive for me to go back to work so i handed my notice in to stay at home with children.I rang our morgage company to enquire about switching to an interest only morgage but was quite surprised when she said i will do it now for you over the phone it saves us around £200 a month .We are now wanting to switch back to a repayment even though i am still not going back to work my worry is now is it just as easy to switch back will they just do it again over the phone.When i switch from repayment to interest only they did not ask for any income details but because a repayment is going to be more money a month do you think they will ask for income details.

Generally, they should switch your mortgage at your request and you may incur a charge for it.

You would be better off writing in formally with both borrowers signing the letter. Although they rarely ask income questions at this request, this would ensure that no uncomfortable questions would be asked over the telephone.

JoeK

billymadbiker

I think what the OP is getting at is..

'As we will be asking to re-pay more each month, will they ask about our income status?'

I take it when you originally took out the mortgage (repayment) you were both in full time employment?

When you switched the mortgge to intrest only (they didn't ask) you didn't tell them that one of you is no longer working.

You are now worrying that if you ask to start on repayment they will find out one of you is unemployed? Correct?

Have a look on your mortgage aggrement and see if you find somthing about aggreeing to inform them if your employment situation changes.

carlos700

Yes that is exactly what i mean.If we ask to go back to repayment so we will have to start paying an extra £200 roughly a month i wondered if they would ask any questions.I have read many times that people on this website have switch to interest only temporary just until there finances improve .Did you find it as easy as me to switch from repayment to interest only if so what happened when you went back to repayment was it just as easy as in was it just a phone call to switch back?

MarkyMarkD

They aren't going to ask income questions for a change in repayment type. I can 99% guarantee it.

Hardly any lender applies different affordability criteria to interest only and repayment mortgages. That's because for interest only mortgage you are assumed to have some other repayment vehicle, the cost of which is likely to be similar to the capital repayments on a repayment mortgage.

I should definitely not worry about it - just ask to change.

Having said that, though, if you have any uncertainty about being able to meet the higher monthly cost of a repayment mortgage, you could just overpay by the extra £200, unless your mortgage will not allow such overpayments. This will have the same effect*, but give you increased flexibility.

* There are circumstances where the effect will NOT be the same, particularly if your mortgage is on "annual rest". If it is, then be careful before following this advice.