is it worth me applying for this mortgage

iammumtoone

I originally took out an interest only mortgage and endowment. When there was the big scare about endowments I changed my mortgage to re-payment (just had to pay a transfer fee) and started again at 25 years. I have kept the endowment on at the same rate as it includes life assurance and critical illness cover.

When I transferred over I was told I could go back at anytime and just have to pay the transfer fee again. I now want to go back to interest only but unfortunately the rules have changed and I need to reapply (although I will be keeping the same mortgage terms)

My question is, it is worth me applying? I know I would not get a new mortgage my credit rating isn't good enough, but this isn't a new mortgage as such, just a transfer where I will be paying less not more (I have never missed or made a late mortgage payment). I can prove I have the endowment which even if it falls short will still more than cover the outstanding mortgage as the capital is now less due to paying 10 years on re-payment.

I could apply just to see what happens but if I am refused how long do I have to wait until I can reapply?

Thrugelmir

Does your lender still offer interest only mortgages. Some don't.

iammumtoone

Thrugelmir wrote: »

Does your lender still offer interest only mortgages. Some don't.

I don't know if they offer new ones but yes they still do my mortgage at interest only, only I need to apply, I am scared I will be declined. They did say I need proof of means to pay at the end (they never asked for that first time round :eek:) but I can provide this.

Does anyone know if the applying process will be as rigorous as if I was after a new mortgage or will it be less as it a transfer of current one?

iammumtoone

Does anyone have any other suggestions what I can do in my situation. I need the money I am currently paying an endowment and re-payment mortgage. I can no longer afford both.

I don't really want to cash in my endowment as I don't know if I would even get back what I paid in. I never intended to cash it in, I always relied on the option if money was tight I could just go back to interest only mortgage.

I am actually really annoyed with the bank and don't know whether it is worth putting in a complaint? I was lied to when I changed from interest only to re-payment I was told to go back all I needed to do was pay the transfer fee (think I might even have this in writing). My mortgage is a flexible one. I had the choice to transfer to re-payment or overpay each month effectively making my mortgage re-payment only officially interest-only. I decided to swap purely to take away any temptation to take out the money spend on over payments. If I had been told at the time to change back I would need to re-apply I would have taken the option of keeping interest only and overpaid every month. I always wanted to keep my options open to go back as you never know how your finances are going to be in the future. it was never a guarantee I could afford re-payment and endowment for the whole term.

AnotherJoe

Since an IO mortgage would be less than a repayment you'd seem to have a good chance of being granted, why not try that first before getting into complaints ?

iammumtoone

AnotherJoe wrote: »

Since an IO mortgage would be less than a repayment you'd seem to have a good chance of being granted, why not try that first before getting into complaints ?

Yes true I wouldn't ever raise a complaint until I was actually refused, just wondering if I would have a case if the worst happens and I am refused. I am very worried about being refused my credit record is not good. I know I would never get a mortgage if I had to apply for one. I also do not earn very much these days.

I understand that until I actually apply I wont know for sure but if they base the transfer criteria as they would on it being a new mortgage I have no chance. If I apply and am refused does that effect my credit record even more. I am currently trying to work on improving it.