Halifax online product switch help - interest only

Lady-T

My fixed rate of 2.69% is due to end in Jan 2017. I've looked online at the new rates but it says you can't switch online if your interest only. You need to call or go in branch.

Will they run the full affordability checks if I call? I know we will fail as we have huge childcare cost and some debts which will be gone in 2018 and the childcare cost will drop a lot by then to.

We are currently overpaying and I think our new ltv should now be 60% which would be a rate of 2.19 which is great. Also when we went onto our current rate we had to complete a declaration of intent of how we planned to pay the capital of. We said overpayments and we have been overpaying. Will this go in our favour.

Has anyone here successfully got a new interest only deal? Or will we be stuck on the high Svr?

Mortgage balance currently approx £190,000. House value around £320,000 - £330,000.

I will call them but just wanted to check with you lovely people first.

Thanks

Thrugelmir

Each case will be dealt with on it's own merits and circumstances. While you are making over payments now while interest rates are low is a positive. Are these are at a sufficiently high level to make real inroads into your mortgage debt. Every month there's a shortfall between what you pay on a repayment mortgage basis and the amount you are in total. The mountain to climb grows potentially ever larger. Interest rates are going to normalise over time to higher levels.

Lenders aren't being intentionally awkward. They have to cover their own backsides (regulatory governance) while making a genuine attempt to assist you. In addition to which they'll have commercial policy considerations to factor into any decision.

Is rescheduling your mortgage over a longer term on a repayment basis a feasible option for you?

Lady-T

I hope it is done on merit.

Yes we want to go on to repayment, we wanted to 2 years ago but was told they would need to run the full checks as we would be changing the mortage.

We only have 15 years left so would have to extend the term. My youngest will start school in less than 2 years which will give us £670 per month to play with and debt should be gone which will give another £400 per month.

If they will let us switch to 2.19 it will bring our interest payment down to approx £350 ish from £452 and we are paying £900. I know our payments are quite short of a full repayment mortgage but come 2 years time we'all be in a much better financial position.

amnblog

If you are on interest only Halifax will run a full affordability check before allowing you to switch product.

Although you may not meet underwriting criteria based on today's position, that does not mean they will agree to switch your rate.

It is a good idea to let a mortgage broker manage this for you.

Lady-T

If they run a full check I know we will fail.
Do I really need a broker if I'm sticking with the same lender?

Is there anyone else on here in the same situation?

glosoli

I know the lender I work for would not accept over payment of capital as a valid repayment strategy for an existing interest only mortgage product switch. They would either push you onto full / partial capital and interest, and then the question is how would the remaining balance be repaid if there's still an element of interest only. We only do a "short" application with no full credit check, if after the outcome of our advice your term etc remain the same, however if the term reduces or if anything else changes other than the product it would be a full credit check with income proofs etc required.

Lady-T

Thank you.

When we switched in 2014 the declaration of intent form had the option of putting "other" on the form if the mortgage started in 2011. Ours started in 2006 and they accepted overpayments.

So if we fail which I think we will, will they make us stay on their high svr? This doesn't make sense!

glosoli

Lady-T wrote: »

Thank you.

When we switched in 2014 the declaration of intent form had the option of putting "other" on the form if the mortgage started in 2011. Ours started in 2006 and they accepted overpayments.

So if we fail which I think we will, will they make us stay on their high svr? This doesn't make sense!

I believe if worse comes to worse, and the mortgage adviser you deal with is unable to make a recommendation, you should be able to proceed with self selection, waiving the protection of an advised process, and just choose the product you want.

Lady-T

Ok well I'll have to see what happens when I call next week.

amnblog

Lady-T wrote: »

Do I really need a broker if I'm sticking with the same lender?

Only if you want the best result and the avoidance of further complications.

minimike2

It depends on when the mortgage started.

I am with Halifax and last time I swapped they first asked me for evidence of my repayment vehicle, which I duly supplied. Then they said they asked me for the wrong thing and they just needed me to sign a declaration that I had a repayment vehicle and what it was.

Essentially, before X date (I don't know off the top of my head what the date is as I do not personally deal with this kind of business) they will allow it with a signed declaration, after X date they will want evidence and an assessment.

Are you saying that you do not have a repayment vehicle if you said "overpayments"? How many overpayments have you made since your mortgage started? How much are you overpaying now? Before asking yourself if you think you should be able to continue with an interest only mortgage, answer those two questions and then see it from the outside looking in on if you would lend someone the money based on the answer.

I know it might not seem fair, but the purpose of these reviews is to try and get you out of a tough situation further down the line. The preposterousness of it all is that a lot of the time the lender shouldn't have granted the mortgage in the first place. But that's another story.