Cutting salary before remortgage

Pete_J75

Hi I have a 3yr fixed term mortgage with Virgin Money due to come to the end of its term in October, however I am planning a drastic career change that involves cutting my hrs at work by half and my salary from £36k to £18k. I will still be able to cover the mortgage on this. However I am considering the risk of doing this when it comes to applying for new mortgage deals either with Virgin or other providers. I would rather go in to the application from a position of strength but i don't know if i can be bothered waiting another 7 months to make my career change.

Can anyone offer any tips please?

kingstreet

You will have zero remortgage options.

Best you can hope for are customer retention options from your existing lender. These can often be arranged online without further affordability or status checks.

Check with lender.

ACG

I believe you can switch products with virgin without the need for further underwriting.

If you want to switch lenders, then you would have to go through underwriting. There is no financial information so it is impossible to say whether or not you would pass affordability based on the lower income.

futurecut

I just went through this with virgin wanting to borrow 50k with 150k equity on a 2ooK house with 4 day week salary of 24880.

Declined.

I believe as virgin took over northern rock they have tight criteria.

Now having to pay 800 so wife can get onto deeds for joint application so i'd guess you've no hope.

fewcloudy

futurecut wrote: »

I just went through this with virgin wanting to borrow 50k with 150k equity on a 2ooK house with 4 day week salary of 24880.

Declined.

I believe as virgin took over northern rock they have tight criteria.

Now having to pay 800 so wife can get onto deeds for joint application so i'd guess you've no hope.

No hope of what? Depends on the amounts involved if making a new application, and might be perfectly OK if all the OP does is a retention product offer, if they can wait for those 7 months.

Pete_J75

Thanks for all your replies. My plan is basically to remortgage in June (the earliest I can do it) and cut my salary in July. If they ask "do you foresee any changes in your circumstances?" i guess i will tell a little white lie. Given that i know i can afford the payments even on the reduced salary, have savings and am living with a partner who is also contributing to living costs, I think any risk is minimal.

Thrugelmir

Pete_J75 wrote: »

If they ask "do you foresee any changes in your circumstances?" i guess i will tell a little white lie.

Entirely your decision. Akin to speeding. Everyday for somebody matters don't turn out well.

nicmyles

Entirely your decision. Akin to speeding. Everyday for somebody matters don't turn out well.

That's not really a very good analogy, though, is it? Speeding has an impact on people other than yourself. Your mortgage arrangements don't, as long as you meet your obligations.

There is also no way whatsoever the mortgage company would be able to prove you had planned the career change before the new mortgage deal kicked in. As long as you pay the mortgage on time for the duration of your new fixed rate, they won't know or care until you try to remortgage once again.