Mortgage Advice Please.................

Nifty_Thrifty

Hi all, long time lurker but infrequent poster after some advice.

Our situation is that we are a family of 5 living in a 3 bedroom detached house in North Yorkshire.

The house is value is approx £215,000 with an outstanding mortgage of £170,000 giving us a LTV of just under 80%. My annual wage is £23k and my wife's part time (25 hours per week) is £19k although she does get unsocial hours on top, the last P60 was just over £23k.

We are currently with Halifax on their variable rate of 3.99% as we have an Interest only mortgage. This suited our needs as we could pay capital when we wanted but when my wife was on maternity leave we could hold of the overpayments.

Anyway, we contacted the Leeds building society and had a phone interview to check affordability. Our only outgoings are a car loan of £220 per month with 2 years remaining and a bed on interest free credit of £35 per month with approx 6 months remaining. We were told if he didn't have the outgoings we could borrow up to £190k. My inlaws offered to help pay the loan off so I went back to LBS and he said we could actually only borrow £165k with no loan commitments! I have since seen a very good rate on the Post Office website and was wondering if anyone had dealings with them and how likely we are to be accepted?

Thanks for reading :beer:

Thrugelmir

Affordability looks stretched to be honest using current guidance on lending criteria. If you are serious about moving you need to think about making inroads into your current debt first. As the new mortgage will most certainly be on a repayment basis rather than interest only.

Nifty_Thrifty

Thrugelmir wrote: »

Affordability looks stretched to be honest using current guidance on lending criteria. If you are serious about moving you need to think about making inroads into your current debt first. As the new mortgage will most certainly be on a repayment basis rather than interest only.

Thanks for the reply. We want to move to repayment rather than IO. We are currently paying £570 on interest only but if we moved to a low 2% fixed rate the payment would be around £720 and we feel we can easily afford the extra £150 per month. Is affordability stretched even with no monthly loan repayments?

Nifty_Thrifty

Did I see on the news last night that interest rates might drop further? I only caught the end and can't see anything online this morning?

I still think I may be best off getting a 2 year fix at the low 2% rate and then in 2 years I should have a better than 75% LTV which will give me more options at remortgaging time.

This just leaves the question of affordability then, I think I may need to book an appointment with the Post Office and see what they say.

Any more thoughts on the situation?

amnblog

You seem to have discounted your current lender, were then attracted by LBS, and now have seen a 'good rate from the Post Office'.


Against this background, there seems to be an issue on affordability.


Do you not think you would be better off getting some 1 to 1 advice?

Nifty_Thrifty

amnblog wrote: »

You seem to have discounted your current lender, were then attracted by LBS, and now have seen a 'good rate from the Post Office'.


Against this background, there seems to be an issue on affordability.


Do you not think you would be better off getting some 1 to 1 advice?

Thanks for the reply amnblog.

I haven't discounted my current lender, Halifax, I admit I am attracted by the low 2% rates at LBS & Post Office. The affordability surprised me with LBS because when we had the phone interview he definitely said we could borrow up to £190k with no loans yet when we come back to him he changes the goalposts to £165K?

Anyway, we're going to speak with the post office and see what they say and take it from there.

In the meantime we will continue to pay capital each month from our IO mortgage with the hope of getting the LTV down below 75%.

Thanks again for the replies.

dimbo61

each time you apply for a mortgage with another lender they do a credit search !
If you get turned down by the Post Office this could make it harder when applying to yet another lender ( Too many credit searches )
Have you looked at the deals your existing lender offers to existing customers ?
Check out the Halifax website

Nifty_Thrifty

dimbo61 wrote: »

each time you apply for a mortgage with another lender they do a credit search !
If you get turned down by the Post Office this could make it harder when applying to yet another lender ( Too many credit searches )
Have you looked at the deals your existing lender offers to existing customers ?
Check out the Halifax website

Thanks for the reply Dimbo.

We haven't been turned down by LBS we just had a phone interview to income and outgoings etc. We were just going to have the same phone interview with the Post Office to see what there thoughts were.

We've checked Halifax's rates but were drawn to the early 2% with the other two lenders, Halifax's rate is 2.69%.