Remortgaging woes, is it just me?

Pixie5740

dojj wrote: »

The issue seems to be that removing my brother from the mortgage and adding my wife means that I can't now afford the lower repayments according to the computer, £700 a month in some cases vs the £930 I'm currently paying
I've put this to the current provider but it would seem to me that they don't want to be losing out on the extra income
Been on the phone to them just now and overpayments means that I've gone from having 15 years 1 month left to 13 years 7 months which I'd some good news I suppose as it's not only saved me 18 months but also £6,740 overall

It's more likely to do with the new MMR rules than computer-says-no.

Rather than a remortgage this sounds more like a new mortgage since it will be a joint mortgage with your wife which doesn't currently exist.

It's probably one for a broker rather than making multiple applications on your own.

kingstreet

Making overpayments and using them to reduce the term means you may also be trying to repay the loan in what now appears to be an unaffordable term.

dojj

after reading all that, it sounds a LOT more complicated than just putting some numbers into a computer

the capital gains thing has got me worried though, will i need to pay tax even if i don't sell the house?

and whats mmr?

i've got about £22k in savings that i was going to use to make a bigger dent in the amount, but if i spend that money, or even some of it, i won't have it left for that rainy day should it appear on the horizon which is why i want to make sure i'm doing the best thing before making any commitments (even though it doesn't look like i can right now)

thanks for all the advice folks, i'm glad i'm not being stupid

Thrugelmir

dojj wrote: »

after reading all that, it sounds a LOT more complicated than just putting some numbers into a computer

What's complicating matters may well be your brothers involvement.
Is none of the equity in the property his.

dojj

His name was just there to get the mortgage accepted. I've paid for it from day one but it's seemingly impossible to remove his name and add my wife's now

getmore4less

Did you documented his beneficial interest?

Removing him from the mortgage/deeds will be a disposal for CGT,

If he did not live there he will not have any relevent releaf if it is deemed he had a beneficial interest.

Pixie5740

dojj wrote: »

His name was just there to get the mortgage accepted. I've paid for it from day one but it's seemingly impossible to remove his name and add my wife's now

That is because you cannot swap names around on a mortgage. You and your wife will have to apply for a brand new mortgage in your own names.

Capital Gains Tax may or may not be something that your brother will have to pay as the property has never been his main residence. I don't know enough about it to advise one way or the other.

MMR is the Mortgage Market Review which was introduced in April 2014. You need to be able to demonstrate that you could still afford to pay the mortgage even if the BoE base rate was rise and your mortgage interest rate became 7% APR (or something like that).

dojj

That makes much more sense, thanks

I'm leaving more towards letting things stay as they are then, there is a but in my will that states my brother is only holding his 50% share in trust so that if anything happens to me he can't just walk away with half of it. That would be the legal side covered as it's signed and documented etcetc
Im not sure how much the 7% would mean so that's my next port of call

Thrugelmir

dojj wrote: »

His name was just there to get the mortgage accepted.

Hence my comment. Lenders aren't stupid.

getmore4less

dojj wrote: »

That makes much more sense, thanks

I'm leaving more towards letting things stay as they are then, there is a but in my will that states my brother is only holding his 50% share in trust so that if anything happens to me he can't just walk away with half of it. That would be the legal side covered as it's signed and documented etcetc
Im not sure how much the 7% would mean so that's my next port of call

How is the house held joint or tenants in common?

Documenting it in a will may not be enough.

(I could put in my will you are just holding the house on trust for me.)