Remortgaging

lucie_1985

We have a combined income of £150k and are 28 and 29, with £383k equity. Whilst I may not have £4,500 to hand right now I don't see why that precludes borrowing for home improvements? Whilst I did mention belt tightening that's simply in relation to the speed of the repayment.

kingstreet

Right.

So, it's additional borrowing and a customer retention product from your existing lender. Two separate transactions.

Or you remortgage to a new lender for the full amount you need to repay your existing mortgage and pay for your improvements. On completion, the solicitor handling the transaction hands over the surplus funds to you after the old mortgage is repaid.

Run your details through your lender's affordability calculator, or have a broker do it for you.

lucie_1985

Thank you Kingstreet, yes, that's what Im getting at! The affordability calculator seems fine and I've modeled it myself (I'm an actuary) in terms of stress testing and affordability which is also fine. The credit relates to repaid training fees after moving jobs for a higher salary - I don't use credit otherwise, the idea has always been to repay it, I simply don't want the bank to see it as a regualr payment and affect affordability should rates increase.

kingstreet

Lenders usually take 5% of a card debt as a monthly payment regardless of the rate. If you enter the balance, it works out what it wants to deduct from what you can borrow.

If it will be repaid, or the balance reduced before completion of the new mortgage, you don't enter anything, or you enter the lower "post completion" balance.

getmore4less

£7.5k-£8.4k net per month.

£267k even over 10years is only £2.6k per month. (20y £1.5kpm)

You must be hemorrhaging money if £4.7k over 7 month needs belt tightening.



Even with healthy pension contributions there should be plenty of surplus cash.

lucie_1985

As I said, belt tightening was hyperbolic. Indeed you have made a number of assumptions with regard to the net value of earnings.

Thank you for your calculations though - it really is otherwise beyond me!

getmore4less

Look at what you said
I also have about £4,500 on a credit card which I can (with some very tight belt squeezing) pay off in full by 1 September. The credit card is still in the 0% rate period until 1 July so it's still "free money".

Now, under the tighter lending rules and stress testing I am concerned that if they look at my bank statements for the 3 months prior to remortgage and see a huge credit card repayment each month leaving little else left will I be automatically refused?


£780pm for 6months is a piddly amount in the bigger picture if you are using earnings of £150k on the application.