Will we be able to remortgage?

heath35

We are currently on a 2 year fixed rate. Originally, when we applied, we got a £170k mortgage, on a salary of £30k each.

By the time we have to remortgage next January, we will have about £132k left on the remortgage as we have made overpayments.

I want to remortgage onto a fixed rate at that point to get a better deal, however one of us will be going back to do studies, meaning that at that particular point in time we will be on one salary, which has gone up to £42k (hopefully a bit higher by then too). Outgoings will be the same except for a £250 payment per month on a loan that we have, to be finished in 1.5 years so not too long after the remortgage.

Hoping that with a free revaluation we will be at 60% borrowing to value, but may be 70% if we are unlucky.

Credit rating for both of us is really good as far as I know. No ugly marks or anything.

Will be struggle to get a remortgage fixed rate deal given the lack of one salary and the extra loan? I get monthly 'inheritance' money from my family that they transfer which they could easily see coming in each month but there's no way to guarantee it I guess, so I don't know if I'd be able to count this as a 'salary'?

Thanks

Wh05apk

If it is just the two of you a mortgage of £132k on a net salary of £39k (£42k - £3k loan) should not be an issue, however, January is a long time away, criteria could change before then.

If all else fails, you may be able to get a deal with your existing lender.

heath35

Oops - it was the gross, not net, salary (same with the original ones I gave, so the proportion of money less is the same). So that does take a big chunk out of it. But yes, it is just the two of us in the house.

I was almost wondering if it'd be worth paying the 2k early repayment fee to switch to a deal now, before I go from working to back to studies...

I was hoping for 5 year fixed rate to avoid any potential upswings in the interest rates.

Wh05apk

heath35 wrote: »

Oops - it was the gross, not net, salary (same with the original ones I gave, so the proportion of money less is the same). So that does take a big chunk out of it. But yes, it is just the two of us in the house.

I was almost wondering if it'd be worth paying the 2k early repayment fee to switch to a deal now, before I go from working to back to studies...

I was hoping for 5 year fixed rate to avoid any potential upswings in the interest rates.

I meant net of the loan, not net as in take home!

At the moment I would say you will be fine, however if your deal ends in January, remortgage offers tend to have between 3 and 6 months life on them, so you could arrange earlier.

heath35

Do you know which are as long as 6 months? Lloyds only does it for the next first of the month ,and RBS seems to only be three months!

Thanks

Wh05apk

Wouldn't like to name them openly, but the "blue" bank, which uses a London district as their mortgage trading name! amongst others, but that shouldn't really be the reason for choosing a lender, most lenders have affordability calculators on their sites, so try those with/without your income, I am sure you will be ok.

heath35

A quick follow up: say we get a free valuation by another institution other than the one we are with just now, and they LOWER the value of our house (zoopla seems to think it will be about 10k less than when we bought it 1.5 years ago!!)...do we have an obligation to tell this to our current lender or anything like that? So much for hoping the improvements have raised the value.

House originally valued at 240k on market, we bought it for 210. Zoopla says 197 now. Was hoping that with time and the improvements we'd be able to at least match the original valuation of 240k, which would give us that magical 60%...

kingstreet

heath35 wrote: »

do we have an obligation to tell this to our current lender or anything like that?

No. You don't.

bigadaj

It was never valued at 240k, local variations Apply but valuation would seem to be close to what you paid, I'd work off that and check against local actual sale prices.