Big drop in salary - Remortgage or downsize?

MrsCheeso

Can anyone explain what our options are when our current mortgage deal with Accord comes to an end given our income is significantly less than it was when we originally applied for the mortgage & we are both now SE with less than 3 years worth of accounts.

House value c. £460k mortgage £160k remaining. Family income now £30k - me £12k & husband £18k separate businesses. Good credit history for both except satisfied CCJ for husband 10+years ago.

Will we be able to stay in our current house & remortgage or will we have to sell up & downsize? As this might be preferred option anyway (house too big & expensive) what mortgage would we get on our current SE income using £250k of our £300k as deposit.

Many thanks

kingstreet

When your current mortgage product ends, you should ask your lender what customer retention products it has available. These are often possible without further evidence of income.

You may be able to remortgage to a new lender, but being able to establish that requires far more information than you've provided, so consult an independent broker.

Selling up and downsizing would likewise be covered with a broker.

Normally, two years' accounts or HMRC SA302s are required, with an average of the net profit being taken as your mortgage income.

neneromanova

If you do have a problem with your current mortgage provider, we have just been to Barclays and are both self employed with £30k between us, and they have said 2 years trading accounts and we managed to get a remortgage for £150k. so that could be an option for you

TrickyDicky101

Is it your mortgage term that is ending (eg at the end of 25 years) or your mortgage product (eg fixed rate of 5.99% for 5 years) that is ending?

If the latter, you could do nothing and simply revert to your lender's SVR until the end of the term.

MrsCheeso

Thank you both. The more we ponder our situation the more down-sizing makes sense as we could get a perfectly good (albeit smaller) house for c.£375k & even taking into account cost of buying, selling, moving etc this would reduce our mortgage by a good £50k not to mention cheaper c/tax, water rates etc.

Possibly a new thread, but if we look to move ASAP & port our current mortgage presumably we wouldn't need proof of income? Will reducing the mortgage be an issue or will we have to pay early repayment fees on some of it?

Gizmo247

When downsizing make sure it is really worthwhile. People tend to chip small amounts off the mortgage and just end up with a smaller house with all the same cash flow issues. From my perspective, a £50 mortgage reduction just sounds too small to me but I suppose maybe big to you.

TrickyDicky101

Porting involves a whole new mortgage application and affordability testing. It will be as complex a process as getting a mortgage through a new lender.

dimbo61

Can you afford the current mortgage payments on your Income?
How is the local housing market?
How long before your current deal ends?
Age,Income and long term plans must all be taken into account.
So many factors that sitting down with a mortgage broker should be your first port of call after finding out your options with Accord.
Why are you with ACCORD? will you go onto the SVR of 5.99% or does it drop onto some form of tracker deal ??? Check this first.
Long term planning for retirement ( Bungalow) and mortgage free !

Thrugelmir

Gizmo247 wrote: »

From my perspective, a £50 mortgage reduction just sounds too small to me but I suppose maybe big to you.

£50,000 of debt reduction is a worthy consideration.

There's far more to life than servicing a mortgage.

shortchanged_2

Are you on a repayment mortgage?

MrsCheeso

dimbo61 wrote: »

Can you afford the current mortgage payments on your Income?
How is the local housing market?
How long before your current deal ends?
Age,Income and long term plans must all be taken into account.
So many factors that sitting down with a mortgage broker should be your first port of call after finding out your options with Accord.
Why are you with ACCORD? will you go onto the SVR of 5.99% or does it drop onto some form of tracker deal ??? Check this first.
Long term planning for retirement ( Bungalow) and mortgage free !

Local housing market currently very buoyant but who knows where/when that will change & we're both early 40's expecting to work until normal retirement age. We are on a repayment mortgage & went with Accord because they had a deal that was attractive to us (3 year fixed & it's this deal that will end & revert to 5.99%). Mortgage repayments are being made no question but we're often dipping into our overdraft & mindful of the fact we won't get a fixed rate of 1.99% again hence the desire to reduce our mortgage & general living costs before our deal ends next year.