We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
The Forum now has a brand new text editor, adding a bunch of handy features to use when creating posts. Read more in our how-to guide
"Stress testing" ???
stingebag
Posts: 36 Forumite
Good morning, quick question put out to the forum if I may.
11 years left on a virgin mortgage currently at £84k, 3 years through a five year fix at 4.09% so 2 years remaining. Joint salary of just shy of 60k, no outstanding loans, credit cards, finance etc. Stable employment of over 20 plus years each, 2 children with no child care costs.
House value £195k so pretty low LTV paying currently £798 per month. Would like to knock 2 years off mortgage reducing it to 9 years remaining. Virgin tell me that would take the contractual payment to £940 per month which I am ok with. What they did say was I would be "stress tested" to their current rate of 4.79% plus a further 2% which again I understand that rates will eventually go up and banks need to be sure customers can pay. What I don't know is if I don't pass their "stress test" will this go against me for future mortgage deals, credit ratings etc. Your comments would be most appreciated. Thanks.
11 years left on a virgin mortgage currently at £84k, 3 years through a five year fix at 4.09% so 2 years remaining. Joint salary of just shy of 60k, no outstanding loans, credit cards, finance etc. Stable employment of over 20 plus years each, 2 children with no child care costs.
House value £195k so pretty low LTV paying currently £798 per month. Would like to knock 2 years off mortgage reducing it to 9 years remaining. Virgin tell me that would take the contractual payment to £940 per month which I am ok with. What they did say was I would be "stress tested" to their current rate of 4.79% plus a further 2% which again I understand that rates will eventually go up and banks need to be sure customers can pay. What I don't know is if I don't pass their "stress test" will this go against me for future mortgage deals, credit ratings etc. Your comments would be most appreciated. Thanks.
0
Comments
-
Can you not just increase your payments to £940 a month and over pay?I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
-
Hi, yes technically I can just overpay, but the problem is I'm not too good at directing the money to the mortgage, it just gets side shifted elsewhere. This way I am sort of forcing myself to commit the money to the mortgage.0
-
You should just be able to ask them to change the direct debit amount, then it's done? That's how I've been overpaying for years.
d.0 -
The problem with reducing the term is that it is a contractual change and there is no guarantee that you could get the previous terms restored. If you have problems over financial discipline, reducing the term is the last thing you should be doing - hence the 'stress test'.Hi, yes technically I can just overpay, but the problem is I'm not too good at directing the money to the mortgage, it just gets side shifted elsewhere. This way I am sort of forcing myself to commit the money to the mortgage.
Don't do it. Overpay instead.You might as well ask the Wizard of Oz to give you a big number as pay a Credit Referencing Agency for a so-called 'credit-score'0 -
As above, just increase the direct debit and over pay. It's exactly the same as contractually changing the term.0
-
Thanks for your replies, increasing the direct debit is the way to go then. Cheers!0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 353.5K Banking & Borrowing
- 254.1K Reduce Debt & Boost Income
- 455K Spending & Discounts
- 246.5K Work, Benefits & Business
- 602.9K Mortgages, Homes & Bills
- 178K Life & Family
- 260.5K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards