Shared ownership mortgage - family mosaic rules - further advance possible? Ideas?

SaintLethal

Hi,

My outgoings are increasing considerably as of next Summer (+£1500/ month) with our 2nd baby starting nursery, central London based, and so I'm hoping to temporarily (for 2 years) reduce my monthly mortgage and debt repayments to cover the cost of nursery (until my eldest starts primary in 2020).

I've a shared ownership property and my 4 year, 4.59%, £975/month fixed deal is coming to an end in March. With Nationwide. We also pay approx. £400/ month to debt repayments (0% interest, 1% minimum payments on 5 cc's - £40,000 total - deals coming to an end in 2018 and 2019).

Mortgage is currently £158,000. Share value £260,000 (using Nationwide house price index).

My thoughts to free up max money per month (currently 975 mortgage + 400 debt = £1375 total) include:

1) fix to a new mortgage rate asap e.g. Nationwide offer for 1.99% for 5 years (feel I need 5 year stability) leading to £200/ month saving - £800 - on mortgage
2) Extend term of mortgage from 21 years to 40 years (I'm 33), leading to further £300/month saving - £500/ month over 40 years

Then... question: will family mosaic let me borrow more for debt consolidation? If so,

3) further advance the £40,000 to reduce £400/ month payment to £125 - saving further £275 - (Nationwide 5 year fix @ 2.25%)

So in total I'll reduce my current £1375/ month payment to approx. £625 - saving £750.

The next 2 years are going to be fairly unmanageable without this, hence why I'm prepared to pay interest on the debt - lower monthly cost, and I'm nervous I won't be able to shift debt on cards to 1% minimum balance lenders.

I'm confident I can overpay mortgages in 2 years time by minimum £1000/ month. I just need to get to 2020 in one piece.

I guess my questions in order of priority are.

1) Will family mosaic let me borrow more/ further advance to consolidate the debt?
2) Can family mosaic use the new house price value the lender shares to increase my rent costs for the share I don't own?
3) Are there better rates, should I switch lender or go through a broker?
4) Any other ideas on how I can reduce the cost of my mortgage and debt?
5) Is this crazy?

Apologies, needed to get off chest.
Hope it's clear and that someone can advise.

Many thanks!

haras_nosirrah

the only way to know for sure is to ask family mosaic

the housing association I work with don't allow debt consolidation as additional borrowing but a different housing association may have different rules

one other thing to be aware of is if you wish to change the term of your mortgage and borrow additional money your lender will do a full underwrite of your circumstances wheras if you keep the term the same there is no underwriting involved.

Lunchbox

As above, check with Family Mosaic with regard to whether you can borrow more without staircasing to 100% as a few of the housing associations won’t allow this.

Also look into what mortgage products are available to you, 1.99% on a 5 year fix may be ambitious. We’re currently remortgaging and with our block having 10 storeys and not paying a huge arrangement fee, the best rate we can get is 2.44% on a 3 year at 75% LTV when looking on paper we thought we’d be able to get around 1.6%.

SaintLethal

Thanks both. Will do. I'm currently with Nationwide and so since I'm simply signing up to a new deal (not remortgaging) I'm hoping the 1.99% deal shouldn't be an issue - since it's what it currently offers on the nw website (I know this can change if the rates go up), and based on 65% ltv.

I will prob apply to 'borrow more' in April once the main mortgage deal has started.

Re underwriting if change of term. This shouldn't be an issue if it's required, but again... looking on the nw website it states that as long as the term is extended within normal retirement age for at least one of the applicants no affordability check/ underwriting is required. Hoping this the case - for speed and ease more than anything.

Thanks again.

haras_nosirrah

if you change anything about your mortgage - term or loan amount you will be subject to a full underwrite.

Lunchbox

Nationwide won’t allow you to borrow more for debt consolidation: http://www.nationwide-intermediary.co.uk/lendingcriteria/schemes/shared_ownership