What happens when I remortgage?

LauraFoster

We are currently on a fixed rate with Nationwide (til oct 2013), our mortgage is around £129k. Not sure on what our house would be valued at but the one 2 doors down sold for £171,500 a few weeks back.

When we initially took this mortgage out in 2006 both my husband and I were working full time with a combined income of somewhere around £39k.

However since then our income has dropped as I now work part time hours to look after our daughter (and am due to go on mat leave in 5 weeks). our combined income is now around £32k.

During a routine chat in my local branch I was advised that my remortgage application would likely be rejected due to my drop in income and their change in lending criteria. Not sure where it came from as I'd gone in about something totally unrelated.

Is this true? Because now I'm stressing about what would happen if it does.

Looking at other banks I appears that the amount we earn wouldn't get us a mortgage of anything close to what we need.

harvey115

Ending the Fix does not mean that your mortgage ends.

If you have applied for a remortgage for a better rate or other reasons then the approval of the application will depend on your current circumstances and current lending criteria of the lender.

cootuk

When you finish your initial mortgage in oct2013, the rate will change to their svr - there's no compulsion to remortgage.

Jimbo1976

When your mortgage approaches the end of its fixed rate, it is worth calling Nationwide (on the number on your most recent mortgage statement) and asking them what rates it will offer you. Most lenders tend to have a range for existing clients who want to stay with the lender. This is not remortgaging, so there is no underwriting required, so no issues re income etc

If you don't want any of the rates then you will either go onto Nationwide's SVR (which is currently 3.99%) or it's BMR (which is currently 2.5%)

R_P_W

What rate are you paying now on your fix?

I dont think there is any need to worry at all as others have said, you dont HAVE to re-mortgage. it justs means your fixed rate deal expires and you will revert to the SVR (in a lot of cases the SVR in lower than the fixed rate).

You have over a year to think about it and plan what you want to do.

If you think you might want to look at re-mortgaging with another lender you can improve your chances by either increasing your income and maybe reducing your mortgage balance by overpaying now (if affordable).

LauraFoster

Thanks everyone. We plan on going onto their SVR but was concerned when she said we wouldn't be able to 'remortgage' with them. Pregnant lady over stressing!

Currently our rate is 5.28% - payments are just under £820 per month so as much as I'd love to overpay with a baby due in 8 weeks it's really not an option.

An increase in income would be possible nearer the time, but it would mean a new job as there is no option at my existing employer. I really wouldn't want to do it for a while though as I want to enjoy as much time with our 2nd (and last) baby.

We can manage on our current income and have money saved to cover my Maternity Leave so fingers crossed mortgage payments won't go up and we'll be good

getmore4less

LauraFoster wrote: »

Thanks everyone. We plan on going onto their SVR

Are you sure , it should be BMR for a 2006 mortgage

http://www.nationwide.co.uk/mortgages/interestrates-types/standard-basemortgagerate.htm

LauraFoster

getmore4less wrote: »

Are you sure , it should be BMR for a 2006 mortgage

http://www.nationwide.co.uk/mortgages/interestrates-types/standard-basemortgagerate.htm

That's great thanks! The lady just mentioned the standard rate, but I forgot about BMR. Hopefully should save us some pennies :j

Morgage_Confused

If you end up on the 2.5% BMR then expect your mortgage to drop to something like £630.....enjoy!
I would overpay the 200 saved (or ISA it)