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Re-mortgaging when Partner is Retired
Options
tv21
Posts: 38 Forumite
Here’s my situation. Have a sum to pay on an interest-only mortgage, which is also offset. We’re paying it back over 8 years at too much per month. Our rate’s a bit higher than average, as usually happens with an offset apparently. Our equity’s high, over 60% of the house value.
Since taking the mortgage out, my OH’s retired and drawing her pension. I’m still employed FT but our combined income would be tight for a loan from our current lender, should they check it. In a year, we’d have paid off a bit more of the loan and it would be more likely to fit their criteria. My goal is to re-mortgage at a lower rate, saving us £hundreds per month. We’ve money sitting in the offset account but would like to keep that separate for as long as possible to cope with roof falling in or similar.
Our options might be
1) asking to remortgage with current lender over same time period at lower interest rate as a repayment mortgage. Would they check our income has changed?
2) going with a cheaper rate with a new lender, using a credit check, but possibly with high fees. Very limited range of choices as our loan is many multiples of our income (and would pension count as income)
3) getting an IFA to check our options and find us a lender.
So any suggestions please which of these would be the most hassle-free and speediest route to a cheaper rate of loan?
Since taking the mortgage out, my OH’s retired and drawing her pension. I’m still employed FT but our combined income would be tight for a loan from our current lender, should they check it. In a year, we’d have paid off a bit more of the loan and it would be more likely to fit their criteria. My goal is to re-mortgage at a lower rate, saving us £hundreds per month. We’ve money sitting in the offset account but would like to keep that separate for as long as possible to cope with roof falling in or similar.
Our options might be
1) asking to remortgage with current lender over same time period at lower interest rate as a repayment mortgage. Would they check our income has changed?
2) going with a cheaper rate with a new lender, using a credit check, but possibly with high fees. Very limited range of choices as our loan is many multiples of our income (and would pension count as income)
3) getting an IFA to check our options and find us a lender.
So any suggestions please which of these would be the most hassle-free and speediest route to a cheaper rate of loan?
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Comments
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Have you considered retention products with your current lender where you don't need a credit check, usually can do this online"It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
G_M/ Bowlhead99 RIP0 -
Amending the term would result in a review of your circumstances. That's the rule these days. Likewise so would switching to a repayment basis. Reducing the balance significantly would aid your cause though. Would result in sacrificing some savings. Though these could be replenished with a reduced monthly outgoing on the mortgage.
If the new mortgage extends into retirement for both of you. Then you are going to need evidence of your forecast pension income.
No harm in running your circumstances past a mortgage broker. Then you would at least know the full range of options available to you.0 -
Have you considered retention products with your current lender where you don't need a credit check, usually can do this online
Interesting, but with our bank we have to talk to someone online and we’d be worried they’d try to uncover our change of income.
We’re no longer eligible for the offset took out with them, but would be within limits for a repayment, especially if OH’s pension counts.
Would they agree to us switching to a lifetime tracker and paying them thousands less in interest when they’ve already got us on their books paying a higher rate? And could they call in our loan as our circumstances have changed?0 -
Interesting, but with FD we have to talk to someone online and we’d be worried they’d try to uncover our change of income.
We’re no longer eligible for the offset took out with them, but would be within limits for a repayment, especially if OH’s pension counts.
Would they agree to us switching to a lifetime tracker and paying them thousands less in interest when they’ve already got us on their books paying a higher rate? And could they call in our loan as our circumstances have changed?
As above poster mentioned, a broker may be the most sensible option, retention products may not be available if you have an interest only option"It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
G_M/ Bowlhead99 RIP0 -
Thrugelmir wrote: »Amending the term would result in a review of your circumstances. That's the rule these days. Likewise so would switching to a repayment basis. Reducing the balance significantly would aid your cause though. Would result in sacrificing some savings. Though these could be replenished with a reduced monthly outgoing on the mortgage.
If the new mortgage extends into retirement for both of you. Then you are going to need evidence of your forecast pension income.
No harm in running your circumstances past a mortgage broker. Then you would at least know the full range of options available to you.
That’s a bit worrying. We’ve been paying the mortgage on a repayment basis for a few years now, although technically it’s interest-only, transferring money from our bank and offset savings account at a rate which will pay t all off by the end of the full term.
One advantage of switching to a new lender would be we could keep the savings outside the mortgage, where we could access it in an emergency. We are aware that offset savings probably count against us should we need benefits but we’re not concerned about that at the moment.
The new mortgage will not be extending into my retirement.0 -
Would they agree to us switching to a lifetime tracker and paying them thousands less in interest when they’ve already got us on their books paying a higher rate? And could they call in our loan as our circumstances have changed?
Switching product is an option. Your loan won't be called in. As you've not broken any terms and conditions.
What multiple is your income to loan. You mentioned in your opening post that it was high.0 -
Thrugelmir wrote: »Switching product is an option. Your loan won't be called in. As you've not broken any terms and conditions.
What multiple is your income to loan. You mentioned in your opening post that it was high.
The loan is less than 4x my income. It’s also less than 3x our joint income, if they accept pension as income.
The loan is small compared to the value of the house - about 25%.0 -
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OK, looked into this and Coventry’s seven-year fix at 1.99% looks interesting but has fees.
FDs lifetime tracker is at 2.24% but no fees. Either would knock about £300 off the monthly payments for all or most of the remaining term. Plenty of food for thought.0 -
if your moving lender don't forget solicitor fees, survey's mortgage fees e.t.c"It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
G_M/ Bowlhead99 RIP0
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