Halifax declaration of intent form

Lady-T

Hi guys

I haven't posted in ages but you are all so helpful so wondered if anyone can help me please.

We currently have an interest only mortgage with Halifax. We've been on the SVR of 3.99%% since May this year.

We owe £199,900 with a LTV of 77% as told by Halifax. Are current payments are approx £675 but we are paying a fixed amount of £900.

We have been offered a 2 yr fix of 2.69% or 4 yrs of 3.79%.

We are going for the 2 yr fix as the payment will drop down to £452 but we will keep paying £900 per month to get our mortgage down ASAP, btw we have 17 years remaining.

I do want to switch to repayment but Halifax have said they will need to check affordability. I do not think we will pass as I'm currently on maternity leave and my partner is in sales so his salary changes every month with commission / bonuses etc and we have some debt, noting serious though, but we can afford to pay the £900 per month.

I have been sent a declaration of intent form but I do not know what to put as our repayment plan. The options are ISA, savings, endowments etc. Our plan at the moment is to overpay and we are currently doing this but I do not think I can put this down as an option. There is an other box that says we can tick if the mortgage has been taken out prior to Jan 2011. It has we've had it since 2006. So can I put overpayment?

If I put ISA will they actually check and ask for a statement of some sort? I do not want to lie but if they will not let us switch to repayment what else can I do. I do not want to be stuck on the SVR.

My plan is to overpay over the next 2 yrs and hopefully our LTV will be even lower. I know the interest rates will more than likely have risen by then but if we are used to paying £900 it shouldn't effect us (fingers crossed).

Has anyone had to complete one of these forms? If so did Halifax asked to see proof?

Thanks for your help.

Lokolo

You are interest only. How do you plan on paying back the original capital amount?

Lady-T

By overpaying as much as possible. As I said I do want to switch to repayment but due to the new rules I don't think it is possible at present until we clear our debts.

antrobus

Lokolo wrote: »

You are interest only. How do you plan on paying back the original capital amount?

Wasn't this a clue?:)

Lady-T wrote: »

...... current payments are approx £675 but we are paying a fixed amount of £900.....

Contemptuous

In your situation, you would tick the "other" box and state you're using regular overpayments. If you have nothing else in place that is all you can do - anything else would be dishonest.
As your mortgage started before the date in 2011 the form quotes then you won't be penalised for not having an "acceptable" repayment vehicle.

getmore4less

£199900 over 17 years @

3.99% £1351
2.69% £1222

if you pay £900 for 2 years at 3.69 the new payment over 15years @ 3.99 will be £1396

you are seriously short on your overpayments.

If you want to switch to repayment you will be committing to £1300pm if you can't pay that now you can't go repayment and the longer you leave it the higher the payments will go.

amnblog

Contemptuous wrote: »

In your situation, you would tick the "other" box and state you're using regular overpayments.

This is correct - the other box is designed to pick up capital repayment methods that were acceptable to Halifax in previous years (and at the time of application) but would not be so today.

Lady-T

I know we are short with our overpayments at present getmore4less the figures you have quoted are similar to what Halifax have told me. Both figures are currently unaffordable at present, due to debts and childcare costs etc. Surely continuing to pay £900 will help.

This is why we want to pay as much as we can now to get us into a better position. A few years ago we were in negative equity so to actually have 77% LTV is a big improvement we started off with a 95% mortgage.

We are both 35 we can extend the mortgage if need be but hopefully once we have more cash we'll be able to make up the shortfall, this is my plan anyway!

Thank you for your help and I will tick the "other" box.

kingstreet

AIUI if you cannot afford a change from interest only to repayment, they should offer you a move to part & part, moving part of your mortgage to repayment, leaving part on interest-only but still allowing you the new product.

Was this offered, or was even part & part not considered affordable?

Lady-T

No part and part wasn't offered. I literally called up to ask what deals were available to me.

I said I was interested in switching to repayment and they said they would have to go through an affordability check because I would be changing the mortgage.

I'm the one who is assuming we wouldn't pass due to debt and childcare etc. Our circumstances have changed a lot since we took out the mortgage.

We definitely cannot afford a full switch on the existing term but maybe able to if we extend the term. But even extending the term will require a check. So I thought it would be best to keep the term as it is and overpay for now.

Maybe we can do part and part after the 2 years if we can't afford full repayment.

Thank you.

Thrugelmir

If the "other" debt is at a higher rate of interest you'd be better off tackling this first.