Remortgaging woes

LanPop123

Hello,

I hope I can benefit from your collective wisdom.

My wife and I are in the process of moving from our first flat to a new larger one. In the process we are wanting to remortgage to release some of the £45,000 equity we have in the flat to help pay for the move, and to pay off some personal debts.

In short we want to increase our existing mortgage from £115,000 to £145,000, which gives us 90% loan to value.

Our existing mortgage is 3.5 years into a 5 year fixed rate with Standard Life, and the cost of redemption is nearly £5000, so ideally we would like to stay with them and avoid paying the early redemption charges.

The problem we are having is that both my wife and I are in the middle of career changes, and so our combined income has fallen from £45,000 pa. to a little over £30,000 since we took out the original mortgage. We have been advised that it is unwise to remortgage with SL as they are likely to refuse due to our lower incomes, and so we are currently going the self-cert route.

Now that we have applied for a new self-cert mortgage (and had it approved), is there anything to stop me going back to Standard Life and seeing if they will make us an offer? I am sure they don't want to lose us as customers, but equally I don't want to be refused a mortgage as this will mess up our (otherwise v. good) credit rating.

I feel like I am about to get ripped off, but I'm not sure if there is anything I can do about it...

Thanks in advance for any advice!

MortgageMamma

Did you take mortgage advice prior to going self cert with another lender and incurring the 5000 early repayment fee?

LanPop123

MortgageMamma wrote: »

Did you take mortgage advice prior to going self cert with another lender and incurring the 5000 early repayment fee?

Yes we did. The new mortgage is being approved as we speak. We knew there would be an early repayment fee, but didn't quite realise how much it would be.

dwsjarcmcd

Whoever told you to remortgage without first speaking to Standard Life is talking tosh. It may be that they would not take the case on but it may be that they would. It dependes on many things i.e. career prospects, other small debt (affordability) etc.

I would phone Standard Life right away and talk to them.

MortgageMamma

Standard life are an excellent flexible lender, they are great for professionals and I think you should talk to them before you do anything else £5k is a lot to lose

I can't understand why your broker has not spoken to standard life first

MM

toonfish

definitely try standard life - work out the cost of the new loan, compared to your current deal and outstanding debts - this is your ammunition. If you can therby prove it is affordable you have a better chance. Whoever has remortgaged you onto a self-cert without checking, has probably done you a disservice. There is no need to self cert possibly anyway, even at the level of borrowing you are requiring.

Which lender and rate have you gone with?

AndrewSmith

There is nothing to stop you going back to them to ask if they will match the offer but their response will be the same as mine.

If your income is £30,000 then going self cert does not change that. It does not mean that you can increase your income figure. All it means is that you do not have to necessarily provide payslips or accounts. It is a desperate adviser that advises you otherwise. Self cert mortgages have the same income multiple or affordability criteria as other mortgages.

Even your new lender, especially at 90%, is going to want to see evidence of 'employment status' ie accountants certificate or letter from your employer. Do not also rule out them wanting to see bank statements to see how your accounts are managed. If the income going through these accounts does not tally with the income you declare they may smell a rat and decline the mortgage, which they can do at any stage.

Please whatever you do, don't get suckered into stating you are 'self employed' if you are not, ourely to get a self cert mortgage. Lender's regularly check NI numbers with the IR to verify that your status is correct.

The implications of providing inaccurate or false information on a mortgage application form can be very severe.

If you have been advised to go self cert to increase your income the Standard Life will be more than happy to see you walk away as a customer.

The advice you have been given is shocking, especially expecting you to swallow a £5,000 ERP and cannot be substantiated without first approaching Standard Life. You will not damage your credit file if they cannot lend you the amount you need.

Ask your adviser to show you who the new lender is and what level of commission he/she is getting from the new lender in comparison to what they would receive for going back to SL. I think this simple question may answer all your points as to why you have been given the advice you have.

toonfish

AndrewSmith wrote: »

Ask your adviser to show you who the new lender is and what level of commission he/she is getting from the new lender in comparison to what they would receive for going back to SL. I think this simple question may answer all your points as to why you have been given the advice you have.

Nail on the head