Remortgage Advice

JamboGilly

Apologies in advance for the long story - better to give all the details to see if you guys can give me any advice.

My current fixed rate of 3.49% with RBS is coming to an end in 31/08/13.

The outstanding balance on our mortgage is £88k (house valued approx £130k) and we have 15 years left on our current mortgage term. Our current mortgage payment is £605 per month.

My husband and I currently have about £20k of loans and credit cards, to which we are paying about £500 per month.

Our joint annual salaries are £54,250 per year. I am the higher earner (I earn £35k per year) and am due to start maternity leave in October. My maternity allowance is quite generous and I will basically get 6 weeks at full pay and 33 weeks at half pay, meaning my wages will be about £1k per month while I am on maternity leave.

Last time I was off on maternity IO mortgages were still available and we changed our mortgage to this, however I know this is more than likely not possible this time. I am basically lookign for a way to remortgage and reduce my monthly outgoings.

I have been looking at remortgaging over 25 years for the £88k plus taking out an additional £20k to pay off our loans and cards (I know this is generally not recommended but we would be struggling to keep up our cards and loan payments while I am on half salary). A search on moneysupermarket.com has brought up a few good rates on 2 year fixed mortgages 3.09% with Leek United BS, 3.25% Leeds BS, 3.29% Post Office and Tesco Bank, 3.35% with Natwest, RBS and Coventry BS. All have monthly payments of roughly £530 per month.

My credit score is quite low but only because of the amount of credit I have outstanding against my name. I have no late payemtns or defaults on my file. My husband has a couple of late payments on his file although he had these 2 years ago when we remortgaged and it ddint seem to be a problem at the time.

A few questions I would like help with:

1) Would our application be more likely to be accepted going through an IFA?
2) Do I have to mention I am going on maternity leave during the application process?
3) Would it raise any 'red flags' going from a 15 year mortgage term to a 25 year term?
4) Are there any particularly fussy lenders that I should avoid applying with?
5) How would you view our chances of being able to add the additional £20k to our mortgage?
6) Would I be best reapplying with my current lender RBS?

Apologies again for the essay, but any help would be most appreciated.
Thanks in advance.

amnblog

1. Yes
2. You probably will not be asked
3. Not really - but not a smart move for you
4. Definately, you have listed a few of them
5. Possible but perhaps not sensible
6. Probably not

Spend some time looking a things, get some advice, and sort yourself out so that when baby comes you are confident your finances will take it.

Congratulations and good luck.

JamboGilly

Thanks amnblog.

So do you think it best for me to avoid re-applying with RBS even though we have our current mortgage with them and had similar level of debt when we last remortgaged with them 2 years ago? The payments would be about £75 less a month than my current mortgage payment.

Are there any lenders that you consider to be less fussy and more likely to accept us? I don't want to make multiple applications and damage my credit score further.

I thought it would be best to apply through an IFA therefore I will make an appointment and see what we can get.

Let_Us_See

Personally, I would recommend you seek a good mortgage adviser rather than an IFA, as the adviser will tend to be "mortgage focussed" every single day and well versed with lenders' trends.



I cannot see any reason why you should not approach your current lender and inquire about your options to transfer to another scheme. It may be quite straightforward, but if documentation/debt burden becomes difficult then simply withdraw your request.