Remortgage problems - wont lend anywhere near as much as 5 years ago?

jammie*dodger

I am currently trying to remortgage and the most that I am being offered is £105k. I currently have £122k outstanding on the mortgage and have another £10k of creditcard debt I want to add onto the mortgage. I fixed 5 years ago at just over 4% and the monthly payment on the mortgage is £855 there's another £200 DD going out every month to service the Credit Card. My annual wage is £36500 and while my wife works part time the amount cannot be counted by the firms I've talked to so far because she has been employed for less than 1 year. Her annual wage is approximately £3500.

Calculations for mortgage means I want to borrow £134k to cover the fees + CC debt + outstanding mortgage. I also want to switch it back to 25 years so we can further reduce the monthly outgoings. I see interest rates that should be bring the monthly payments down to less than £600 but am being told I can't borrow as it is unaffordable?

Can anyone recommend a lender with decent rates that will lend £134k on an annual wage of £36500?

Value of house is £250k so we have good equity in the house.

Thanks for any advice, JD.

Senior_Paper_Monitor

None of that makes any sense - if there are no other issues the wife should be allowable, but you shouldn't have any difficulty at the multiples you indicate (unless you are old ?) without her.

I suggest you get your credit reports and discuss with a broker - certainly should be doable unless I'm missing something.

jammie*dodger

Yep, currently discussing with London and Country but they are off for the weekend now. They also cant show me offers from the cheapest lenders (I assume because they are Building Society) which is why I had a go at applying myself.

I was told it was due to affordability? 2 dependents and we are both under 40 so the 25 year term should be OK I would have thought.

Could be the credit report but we've never missed a payment and the only debt we have is the mortgage and the credit card.

Like you say, doesn't seem to make much sense. I just got off the phone with the HSBC and they said they plugged all the numbers into the computer and they could only offer me £70k.

Is the old 3x salary still used? If so is there anyone else I can look at as I guess I'll need 4x Salary.

Senior_Paper_Monitor

Be careful about building up lots of credit checks - a decent broker should place that without too much difficulty (and be working on Saturday ) with a first time hit.

kingstreet

With the income given;-

£36,500 (all basic salary?)
£3,500
£1,756 child benefit (any tax credits?)

A 25 year repayment mortgage sees one lender's affordability calculator return £184,740, if that income is all basic, so there must be more to this.

Do you have high childcare costs, maintenance payments, other continuing credit? What reason is being given for this low amount?

Your wife's income should be fine if she is permanent PAYE even if she is in a probationary period.

ACG

Your income should cover easily what you need.
Your partners income should be taken into account with most lenders unless she has only been employed for 2-3 months.

I cant understand how this is even a problem.

L&C should (i would hope) come back to you with a decent deal. As to whether the lender is a building society, bank or private banking group makes no odds - L&C are whole of market so they should be able to help.

jammie*dodger

Thanks all, London and Country will be able to get this sorted I;m sure. They are the professionals after all. I'll bide my time till Monday and get on the phone with them first thing.

Thanks everyone, was beginning to feel like I was going to be stuck paying over £1000 every month rather than under £600.

Fixing when base rate was 4% seemed sensible at the time but I've been kicking myself ever since.

jammie*dodger

kingstreet wrote: »

With the income given;-

£36,500 (all basic salary?)
£3,500
£1,756 child benefit (any tax credits?)

A 25 year repayment mortgage sees one lender's affordability calculator return £184,740, if that income is all basic, so there must be more to this.

Do you have high childcare costs, maintenance payments, other continuing credit? What reason is being given for this low amount?

Your wife's income should be fine if she is permanent PAYE even if she is in a probationary period.

Annual income is all Basic. We have very few opportunities for overtime.
Wives income is part time - so that may explain that.
Childcare costs are zero (hence wives low wage)
HSBC were over the phone and the nice lady I spoke to rather reminded me of little Britain, "Computer says no!" She clearly couldn't wait to get off the phone once she'd realised she couldn't get me the deal I wanted.

I'll speak to L&C on Monday and get them moving. The haven't done so yet as I was sure I could get a better deal myself. :rotfl:

Thrugelmir

jammie*dodger wrote: »

but am being told I can't borrow as it is unaffordable?

The concern for any underwriter is that you are consolidating debt and extending the mortgage term. So not addressing the reason for your apparent budgetry overspend. The future only ultimately bring higher interest rates. So financial institutions are mindful of the new lending responsibly rules. None wants a repeat of the PPI payout issues. Furthermore lenders are looking to derisk. With limited funds to advance they have no reason to take any risk when shifting through applications.

jammie*dodger

Understood. I agree my poor money management may well be the root of the issue. I could always leave the mortgage as it is and move the CC debt to 0% card after the mortgage is organised I guess. Would that help do you think?

Thrugelmir

jammie*dodger wrote: »

Understood. I agree my poor money management may well be the root of the issue. I could always leave the mortgage as it is and move the CC debt to 0% card after the mortgage is organised I guess. Would that help do you think?

Balance transfers are increasingly harder to obtain. If it's a new card you intend applying for.