Remortgage advice/renegotiate current mortgage

Interestedinthis

holly_hobby wrote: »

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

Ok thanks.
The income I have today is wholly from permanent employment. So lets say the scenario is today.
Someone aged 52 looking for a 23year mortgage on an income of £25000 solely derived from permanent employment and is a base salary so not trying to put in bonuses or commission or overtime etc (I don't get any of that anyway).
So today if I applied for a £91000 part and part mortgage on a basic salary of £25000 with no unsecured debt on a valuation of the property at £160000 (57% LTV). Only outgoings would be mortgage, council tax, water rates, gas, elec, food, petrol, house insurance and endowment premium (£46.85) etc. Single person no dependants.
Has anyone sourced anything like that. Is it possible if the scenario were today.
Thnx.
Alan.

holly_hobby

But thats not your situation today .... so it would be pointless saying yes it will be fine or not, as criteria and lending into retirement, may well have changed (again !) by 2017

Broadly, your income post retirement ie upto age 75, must both be suitable and meet the lenders affordability criteria.

Pension lump sums, well it isn't as simple as saying "I'll apply for part interest only, and use my tax free lump sum as one of my repayment vehicles" ....

Indeed if you look at Halifax's current criteria (which generally tend to mirror the industry's generaly attitude to lending) on the subject ....


"For the purposes of backing an interest only mortgage, a maximum of 25% of the current fund value with the current value to be greater than £1 million. Where customers are on a final salary pension scheme the lump sum can be used if it is greater than £250,000. Pensions can be combined to reach the £250,000 and there is no need for confirmation of the full fund value."

So (depending on the figs) you may well find that you can only rely upon your endowment with regards to any lump sum reductions ...

Holly x

Interestedinthis

Thanks Holly. My op was very much about repaying the mortgage with regular overpayment and either surrendering the endowment policy to bring the balance down or using whatever the endowment policy pays out on maturity. I'd never considered using my pension lump sum in my calculations at first.
But a later poster pointed it out and its great that I've got that lump sum to look forward to. That was a pleasant bit of news that my first employers pension will pay out at 58 which I hadn't realised it would pay out before the endowment until I frantically had to get all my info together!
I do have pensions in place which is good so I'll just get on with overpaying for the next 4 years and hope that I can extend my term and convert to repayment in 2017. I'd rather not have to sell the house but if all else fails its an option.
Thanks for your time and advice and to other posters to. Xx

silvercar

As the endowment time bomb starts to explode, you won't be the only one in the situation of a mortgage ending and no money to repay. You can watch what lenders do over the next few years as the endowment shortfalls leave people short.

Interestedinthis

silvercar wrote: »

As the endowment time bomb starts to explode, you won't be the only one in the situation of a mortgage ending and no money to repay. You can watch what lenders do over the next few years as the endowment shortfalls leave people short.

Yes thanks silvercar as that'll give me a bit more of a feeling of the approach lenders are taking.
I would've been all right though with the term of 14 years I thought I'd got lol.
Many others might not be so I hope some are reading this post - it would've been awful to discover it in 2017 :eek:
I'm in a reasonable position as I've got a decent pension income and I've got a decent surrender value to fall back on and can overpay large amounts.
Thanks for your posts.

silvercar

I wonder how a repossession hearing would go.

Lender: Borrower had kept up repayments but term has ended and we want property sold.
Borrower: I can repay in a few years time, all I'm asking is to continue mortgage on existing terms until then
Lender: Borrower has had enough notice of end date
Borrower: To repossess would mean a quick sale at below market value, penalising me unfairly. To allow me to continue would not harm the lender. To allow the repossession hurts me far more than the lender and lenders are meant to abide by TCF (treat customers fairly)
Judge: Balanced with a duty to be fair to both parties............

Interestedinthis

silvercar wrote: »

I wonder how a repossession hearing would go.

Lender: Borrower had kept up repayments but term has ended and we want property sold.
Borrower: I can repay in a few years time, all I'm asking is to continue mortgage on existing terms until then
Lender: Borrower has had enough notice of end date
Borrower: To repossess would mean a quick sale at below market value, penalising me unfairly. To allow me to continue would not harm the lender. To allow the repossession hurts me far more than the lender and lenders are meant to abide by TCF (treat customers fairly)
Judge: Balanced with a duty to be fair to both parties............

I'd hope it goes my way after managing to get it down to £91000 as I think I can. I just hope it doesn't got as far as repossession especially as I have a salary a job a good pension around the corner.
Lets hope I can remortgage. Thanks for your opinions tho

Interestedinthis

Im going around in circles about the surrender of the endowment policy.
I could do it now and get £14600 or leave it until May 2017 when the mortgage is supposed to be repaid when it might be worth more then.
If I was able to get a remortgage on a part Interest only for £28900 (which is the 3.5% growth rate so I'm using the cautious value) and part repayment of £62100 then it might be worth more SV again by 2027. Or if no art & part then just a repayment mortgage.
I've set up a standing order to pay £458 pm from today now for 48months so the balance in May 2017 should be between £91 and £93k by May 2017.
Any views on whether to keep it now or surrender it now?
Thanks so much.
On a positive note if I knuckle down and manage to get the debt down and remortgage and keep over paying then my retirement will be comfortable with a good pension and mortgage paid off.
It's never too late to learn and address issues I've discovered from this.
Hope I can help others in the future.

holly_hobby

Have you spoken to your lender about the situ ?

If not, I would get them on board asap, and effect with their assistance, a plan to address and manage the oversight with the term.

Just be also aware that the emv figs, are just that, projected returns on industry wide prescribed growth rates, to which the reality of the maturity returns from your particular provider may exceed (yay !) or fall below even the lowest specimien figs and returns.

Have you checked if your policy has any MEP (mortgage endowment promise ?), as this would be another factor that may make surrending a poor choice. Also look at the providers recent payouts and terminal bonuses applied to maturity policies - to give you a general idea on how proficient their fund managers are.

The ideal situ would be to switch as much as is affordable to capital and repayment, whilst also utilising the endowment payout and your occupational TFC to further reduce the os balance on maturity/pension vesting.

Hope this helps

Holly

Interestedinthis

Thanks Holly. I spoke to the lender. They offered 3 things. I could convert to repayment over 4 years. That would be crippling. £2300 pm. I don't even earn £2300 per month. I won't do that as it becomes contractual anyway so I'd rather overpay. They offered to go thru full underwriting to get a term extension. I won't pass underwriting due to low salary and high credit card debt. I'm on a very low rate 1.5 % but if I change they say they'll put me on a new higher rate. They also said remortgage which i also can't do. For a full underwriting and term ext then i must go to Money service to negotiate lower than min payments. I don't want to do that either as the consequnces will be a problem. So I think I'm best to keep on the low interest rate and overpay by £458pm for 48 months. Pay the £18k credit card debt off in 36-48 months and then either sell the house or remortgage.
I think I'll keep the endowment for now as I get the life cover and it'll be worth more SV hopefully in 48 months. So I'll perhaps use it at the last minute to get the total down lower if I need to. Great tips about MEP etc. I'll look into that. Whats TFC? Its all so upsetting as repossesion would be so horrible and my income will rise 6 years later by £500 per month as I'll be in receipt of pension so I could pay £958 per month to reduce the balance then and even use the pension lump sum too. Still no use crying over spilt milk. Thanks so much for the ideas. I'll get onto it.