Remortgage advice/renegotiate current mortgage

Interestedinthis

I'd like some ideas on any better plan than this. Long story so I'll try not to waffle. Putting a few mortgage & pension statements away and P60s etc prompted me to look at my budget & write a little note of dates down. To my horror I noticed my mortgage statement said my mortgage has 4 years left. :eek: I know its got 14 years left not 4.
My endowment matures in 2027 so thats the date in my mind to make sure I'd got a solution to the endowment shortfall. I've had this mortgage since 2004 which was a remortgage through a broker. I've just not noticed the term as I've only ever looked at the money and making sure its not going up lol. So I looked at all the mortgage offers and statements and they all say 2017 not 2027. After passing out and thinking omg I'll have to sell the house etc I pulled myself together. I contacted the broker and asked for a copy of my mortgage application form and he said he'd get it out of archive but it would take a week. That was 3 weeks ago and he's since not answered any of my phone calls or emails so I think he's just trying to ignore it as its his mistake as well as mine. It's my mistake too as I've just signed the app & offer but we have both made a mistake.
So I rang the mortgage company and they provided a copy of the app this week and its written in the brokers handwriting as a 13 year loan so he's calculated 2027 minus 2004 as 13 not 23 and we've both not picked the mistake up and I've gone on for the last 9 years just not noticing. Now I'd think it was as simple as ringing the company and saying can you change your records please lol. But it isn't. Glad I noticed it now and not in 2017. :rotfl:
I rang the mortgage company and they won't extend term without me going through full underwriting and getting money advice service to get all the credit card companies to take less than the minimum payment to prove that the mortgage is being prioritised above other debt. This will shoot my credit rating to pieces so I'd prefer not to do that and just see what position I can get to in 48 months. I don't earn enough for full underwriting as when I took the mortgage out I earned about £40k plus.
So info you might need :
Age 48
Current Salary £24174
House value £160,000
Outstanding loan £115,000
Unsecured debt £18,000 on credit cards
Savings £6500
Pension forecast from 1st employer payable in 10yrs age 58. pension pa £7893.25. Lump sum £52600
Pension forecast current employer probably payable at age 66 pension pa £7320.30. lump sum £48802
Endowment maturity May 2027 forecast at £28900 at 3.5%
Endowment surrender value in May 2013 is £14,600 and in 2010 was £10767
Endowment Fund value in 2013 is £12886 and was £10767 in 2012 so its improved a bit compared to previous years.
Salary forecast for 2017 £24905
So I have between now and 2017
I was thinking that perhaps I need to get a remortgage in 2017 at age 52 on a salary of £24905 if I want to stay in my home.
So how much do I need to get the balance down to in order to get a mortgage for 10 years or even 13 years in 2017 to take me to age 62 or 65. I can't get state pension til age 66.
I need to get the cc debt of £18k paid off by 2017 also so that a mortgage lender will consider me. I get £400 pm from my brother as I lent him a lot of money so I use it to pay the credit card debt so i think I could get that paid off by 2017.
I could surrender the endowment but would I be better to do that in 2017 if I can't get the balance down to an amount a mortgage company would lend me. I'd like to get the maximum mortgage I can so that I don't leave myself too short now and fail.
If you have a suggestion on a plan then it might give me a different perspective.
What would you do about the broker?
TIA.

holly_hobby

Its my opinion that although the broker clearly has made an error, as you have already stated, the checking and verification of dates etc, is ulitmately down to you - the term would have been clearly highlighted in all the costing figs and the mortgage offer (inc every annual statement you have recd over the last 9 yrs) - so I'm afraid that I don't hold much hope for any successful complaint you may be considering.

The mge lender is correct, you want to extend the term, so you must meet their current affordaiblity criteria, which is of course based on your present financial circs.

Plan of action .....

1. Ask your brother to repay ALL the monies he owes you - pay that off your mge (even though it wil have the lower interest rate) in order to reduce the balance (as there is no gte even if you pay off your ccard, that you will meet the lenders affordability assesment re the exend term, and your mge is a secured loan where your ccard isn't).

2. Obtain a current surrender fig from your endowment provider - to consider your options

3. Can you start to overpay, within permitted annual ERC fee allowances (usually 10%) ?

4. I'll have a mull over what else I can think of apart from what you've already considered.

Hope this helps

Holly

Interestedinthis

Thanks Holly.
I agree with you about the Broker issue. I do rebuke myself everyday lol. What a silly billy. I am a bit of a filer rather than a reader. I wasn't really thinking I could complain but would have liked his support to try to help me fix it.
My brother sadly is not in a position to repay me and I did consider that but I can't get blood out of a stone.
That is an up to date surrender value of £14600 but if I surrender it now I'll lose the life cover.
I can overpay for 48 months and thats what I meant to say - sorry as I didn't clearly say that. What I thought would help me is how much do I need to get that balance down to and then I can see how much I really need to overpay every month.
I am concerned about your point about meeting lenders affordability. By the time I need to remortgage I won't have the credit card debt, or any other debt. I'll have my salary and ordinary living costs.
I could ask my current lender in May 2017 if they'd let me convert the balance to repayment and do a 10 year or 13 year term. I'd just thought of remortgaging but actually I might be able to stay with the same lender. On a salary of £24905 why wouldn't someone give me a 10 or 13 year repayment mortgage if I have no other debt and its still below max age (some will lend to 75) and its still before I retire?
Could I do part repayment and part endowment - say interest only on £28900?
Thanks for taking the time tho

silvercar

On a salary of £24905 why wouldn't someone give me a 10 or 13 year repayment mortgage if I have no other debt and its still below max age (some will lend to 75) and its still before I retire?

3 x income? 10/13 repayments are quite expensive: 75k at 5% over 13 yrs is £665pm.

Could I do part repayment and part endowment - say interest only on £28900?

If there are lenders that will accept pension lump sums as your repayment plan.

Interestedinthis

silvercar wrote: »

3 x income? 10/13 repayments are quite expensive: 75k at 5% over 13 yrs is £665pm.


If there are lenders that will accept pension lump sums as your repayment plan.

Aah I see, its the monthly amount repayable that might look unaffordable on my income not the 3x salary.
So I need to take the longest term I can then to bring the monthly amount payable down so my contractual payment is low but I'll overpay regularly. So at age 52 I would have a new mortgage - I could do with a 23 year mortgage really to lower the monthly payment then 6 years later I'd have the pension lump sum which i had completely overlooked as being able to add in. So theres a possibility I could have part interest only if I can find a company which takes Pension plan. That would bring my monthly amount repayable down if i could have part repayment part interest only. I was thinking of the endowment policy not the pension lump sum but now you've mentioned it yes the pension with my first company will pay out at 58. Then a further 4 years and the endowment will pay out - if it pays anything out at all lol. My intention with overpaying and pension etc is to still get it paid off at age 62.
Anyone know any lenders who will take pension plan?
Also I was thinking I could get the balance down to £91000 but would that be low enough on a projected salary of £24905?

silvercar

Aah I see, its the monthly amount repayable that might look unaffordable on my income not the 3x salary.

Yes and possibly. Generally limits seem to be around 3 x salary, what ever the repayments look like. But a high repayment on a relatively low salary could look risky.

Don't know who does pension mortgages.

I wonder what would happen in 2017 if you said you want to carry on on interest only until your pension lump sum arrives.

Interestedinthis

silvercar wrote: »

Yes and possibly. Generally limits seem to be around 3 x salary, what ever the repayments look like. But a high repayment on a relatively low salary could look risky.

Don't know who does pension mortgages.

I wonder what would happen in 2017 if you said you want to carry on on interest only until your pension lump sum arrives.

I'd like to try that but I'm scared they'd repossess.
The other week when the interest only time bomb report was on Channel 4 news the CML guy I think it was gave the impression that lenders would be sympathetic and extend terms maybe by 5 years. If they gave me a 6 year term extension in 2017 then I'd be almost repaid by using the pension lump sum, the endowment surrender value and overpayments of £500 pm. So strange that at the time it was in the news I thought this had nothing to do with me lol as I hadn't discovered my mistake at that point :rotfl:
I'm not concerned about using the pension lump sum (don't know why I didn't think of that) as I'll still have my salary but I'd also have another £655 pm at age 58 if I continued to work in my existing job by drawing the pension thats payable at age 58.
Then I've still got my lump sum of my second pension at age 66 plus I'll be mortgage free at 58 not 62 so I can save.
So sad that they probably won't allow pension plan to be used and to extend my term by 6 years.

Interestedinthis

I'm leaning towards getting the balance down to £91000
Then applying for a part rep part IO loan
IO £23000 = £115.00 pm at 6% interest rate
Repayment £68000 = £445.00 pm at 6% int rate over 23 years to age 75.
but i would overpay regularly and use pension lump sum
Total per month =£560 pm

I'll still be paid off by age 62 in 2027 as planned.
What's the chances on a salary of £25000 to get a £91000 mortgage with a monthly payment of £560?
I'd have no loans or other debts.
Will any companies do part and part?

The mortgage calculator on this site says I could get a loan of £81300 up to £100000.

holly_hobby

Any application to change your mge repayment method or extend term, will involve an affordability assessment - to which any income that can not be formally verified (aka personal loan income from bro) will be excluded.

Holly x

Interestedinthis

holly_hobby wrote: »

Any application to change your mge repayment method or extend term, will involve an affordability assessment - to which any income that can not be formally verified (aka personal loan income from bro) will be excluded.

Holly x

Thanks Holly.
The credit cards will have been fully repaid by then by using my brothers monthly income. I lent him him that money and its all on a variety of 0% credit cards which I regularly move around to get 0% deals. All the £18k credit card debt will be gone by 48 months when I need to renegotiate my mortgage which by then should be down to £91000.
I meant whats the chances of me getting a £91000 mortgage on my salary of £25000 when I will have no debts ie no unsecured loans or credit cards.
Has anyone sourced a mortgage for that salary and that amount and is there any chance of part and part?

holly_hobby

Interestedinthis wrote: »

I meant whats the chances of me getting a £91000 mortgage on my salary of £25000 when I will have no debts ie no unsecured loans or credit cards.
Has anyone sourced a mortgage for that salary and that amount and is there any chance of part and part?

It will wholly depend upon what the lenders affordability criteria (inc what they will accept as income) is at that time ..... to which you are asking what we imagine your/any other lender will accept both term and income wise in 2017 ...... I'm afraid its a tad impossible .... although we may give you guesstimates as to how they may evaluate your situ...

Sorry this wasnt' of more help, but I'm trying to be realistic.

Holly xx