Remortgage conundrum!

poddy21

I've also posted this in the Redundancy forum.

I'm about to be made redundant at the end of Feb, and my fixed rate mortgage ends in March!
I do have unemployment insurance but am wondering what to do.
Is it likely I may get a new fixed rate deal? (The insurance company woul probably want me to because it means they will pay out less money)
The mortgage company will probably not offer me a new deal because I'll be unemployed?!

I will be getting a payment equivalent to a years salary after tax, but currently don't have a job to go to - although I may be able to pick up some contracting work.

If I stick to the SVR its likely to be something silly like 5.5%

Anyone ever been in a similar situation?

Wh05apk

You have an interesting situation, if your insurance provides the mortgage payment + x% then keeping the mortgage higher will give you a greater surplus.


Whether you would want to tie yourself in for a further period is upto you, is there a chance you may need to sell up to downsize or move nearer to a new job?


Your existing lender would switch you to a new rate as they would not re-underwrite, however a new lender would need to underwrite, so would need to be made aware of the impending redundancy, so unless there is sufficient other income it would result in a decline.

poddy21

Thanks for the reply.
My insurance covers the mortgage interest, so I guess I need to decide whether to call the mortgage company first to try to remortgage (Obviously I will have to tell them I'm being made redundant) or should I call the insurance company first?!

Hopefully I will be able to find work nearby, but its likely to be contract work which of course won't be guaranteed money every month

pjread

Personally I'd grab the best fix (or even variable if better than SVR and no tie in) I could from the current lender, as I don't think they'd check anything and being reasonable I can't see a payment problem for 12 months anyway as you've got the same cash you would get if you were still working.

I'd be amazed if any other lender would touch you though, no offense!

poddy21

None taken

I'm thinking along the same lines, although if I am still without a job after 12 months :eek::eek: I'm not sure the insurance would then payout

I'm also annoyed that I've been paying out for the insurance and now I might need it I may be snookered!!

pjread

The way I see it, few people have guarantees 12m+ into the future, and I know a few guys who used redundancy as an opportunity to move to contracting and probably have most of their mortgage paid by now!

if you can get a fair rate, a 3-5 year fix would probably be sensible, as by then you'll hopefully have either a couple of years at a new employer or a decent contract history if you need to re-mortgage again.

Yorkie1

poddy21 wrote: »

Thanks for the reply.
My insurance covers the mortgage interest, so I guess I need to decide whether to call the mortgage company first to try to remortgage (Obviously I will have to tell them I'm being made redundant) or should I call the insurance company first?!

Hopefully I will be able to find work nearby, but its likely to be contract work which of course won't be guaranteed money every month

Not sure you've quite picked up on this point.

If you stay with your present lender then they don't need to know about the redundancy and you simply move onto a new product with them. It isn't a "remortgage" - this is when you change lender and, as others have said, you're not going to manage to move lender for a remortgage because of the redundancy situation.

kingstreet

What is the actual monthly benefit provided by your insurance cover?

What is the "follow-on rate" of your current mortgage?

How much do you owe and what is the remaining mortgage term?