Change of Circumstances

Mum_2_Zak

Wondered if any one could give me any advice on my situation.

My husband and I bought our house 3 yrs ago when we were both working and currently owe about £205,000 on a fixed rate mortgage (Nationwide) which runs until June 08. I took voluntary redundancy in Dec 06 and also found out I was pregnant so I decided not to work again until our son was 1 year old (Aug 08). We are currently paying our mortgage from my redundancy pay and my husband covers everything else. We can't cover all our bills on one wage once the redundancy pay runs out.

We would like to relocate back to the north to be closer to family etc, preferably spring time next year. This would also give us the opportunity to release the equity on our house with the intention being to buy something similar but reduce our mortgage. Ideally I would like to become a full time Mum and stay at home as we'd like to have another child soon(ish!).

Generally our finances are not too bad. We have no loans and nothing on credit cards. We have £12,000 in ISA's and £11,000 in a general savings account that we are using to pay our mortgage whilst I'm not working.

So ultimately our goals are
1. To move back north
2. Hopefully reduce our mortgage in the process
3. For me to stay at home and not work if 1 and 2 are achieved.

My questions are:

1. should we have told the lenders of our change in circumstances or are they not bothered as long as we keep paying our mortgage?

2. When is our best time to move baring in mind our fixed rate ends June 08?

If we want to move before the fixed rate ends in June what happens? Do they re-assess our financial situation or do they just transfer what we owe to the new property?

If we wait until after the fixed rate ends, would we end up on Nationwide's standard variable rate mortgage in our current property because our income is much less than it was when we bought the house and therefore we wouldn't be able to remortgage with anyone else?

3. My husband would be looking for a new job and not relocating within the same company, how do we then stand with applying for a new mortgage? I think before they have always wanted three payslips. Are we better off transferring our current mortgage if we can?

Is there a better way to do this based on our goals?

Any help much appreciated

17Dave

Answers:
1. Only if it does or will affect your ability to pay your mortgage. Talking to your lender BEFORE the problem arises is always advisable.

2. If there are penalties then moving after June 08 seems logical. Check your last mortgage statement - it should give details of the penalties that apply. You may move sooner if the mortgage is "portable" i.e. you can transfer the fixed rate terms (still ends June 08) to your new property. However, if you borrow less a penalty may still apply. Also you will need to reapply for a mortgage so your circumstances will need to be disclosed.

3. The simplest answer is to relocate initially - length of service is not a major issue but some lenders do want 3 months in current position (may be Ok if the new job is in the same industry and similar position)

2 options - move before June 2008 - stay at Nationwide and transfer the remainder of the fixed rate.
Or move after June 2008 - use a broker and get the best deal at the time.

Mum_2_Zak

Thanks 17Dave.
Our mortgage is portable, so I guess what I was unsure about is if we try to transfer it (lets say we want to keep the amount the same) to a new property based on our current circumstances we would not now be able to borrow such a large amount. How do Nationwide view it? Do they say no you can't borrow that much for a new property but if we stayed put it wouldn't be an issue as long as we keep paying. If you see what I mean!

MortgageMamma

how much does your husband earn?