Preparing to remortgage for house move

mrsbubbles

Hi, I’ve seen some great advice given to people on this forum so I wonder if you could help me please? We are looking to move house soon and we’d like to have our finances “in order” so that we’re in the best position possible when we do remortgage. Could you please advise what we need to do/know?

My partner is the main earner, income approx 80k no current loans although has taken out loans in the past for car purchases (latest one was paid off about a year ago and he won’t be taking out another before we move house). He has a credit card which he rarely uses, but always pays off in full. No unauthorised overdraft use or payday loans taken out.

I work very part time (and have done for a number of years now), income only 5k per year, no loans or credit cards.

We have no childcare fees to pay.

We currently have a mortgage and are looking to move house and increase our mortgage to approx 300k.

What info do mortgage providers require these days? 6 months worth of pay slips and bank statements? P60? What kind of scrutiny is made of spending on the bank accounts? Is there anything we should do to make it look as best it can? We’ve occasionally gone into the overdraft (less than £100) but only by accident and funds are then moved around between bank accounts to take it back out of the overdraft.

Does the fact I don’t have any credit card/loans effect my credit history/rating? I have 2 monthly contracts in my name only (one is a phone contract) plus I’m on all the usual household bills (council tax, gas etc) so has this built my credit history enough for lenders? Is it worth taking out a credit card (and paying it off in full each month) to boost my credit rating? This is something someone has suggested to me but I don’t know if I’d even get a credit card on my minimal income.

Anything else I need to know or do? It’s been a long time since we first took out our mortgage so I don’t know what lenders require now!

Thank you very much in advance

getmore4less

A good indicator of healthy finances is how much are you saving each month.

With £80k gross there should be healthy pension contributions but still leaving around £4k to live off

What is the current mortgage, size, rate, payment, term
What is the new house LTV

Already got the savings to move and add to the deposit?

What does your budget say you can afford?

mrsbubbles

We have about 25k in savings for the move to cover stamp duty, estate agent, solicitors etc. We do save a regular amount each month which then go towards large spends like holiday, new car, house renovations, although we do dip into our savings and could have saved more (or overpaid the mortgage) if we had been stricter. Our current accounts possibly look a bit erratic as we spend a bit on purchases and we transfer money between our current accounts through the month. Does transferring between accounts look bad to lenders? Or do they look at our balance as a whole and not worry how it moves between us?

The LTV on the new house will be around 58% depending how much we can get for the sale of our current house (the equity is our only deposit).

I have tried those online mortgage calculators and we seem to comfortably be able to be lent the 300k (if the calculators are to be believed?) and the monthly payments will be affordable, we will just have to reduce our savings contributions accordingly.

getmore4less

Sounds like you need to do some proper budgeting with a longer term plan say 5-10 years) for the cash flow to be sure what you will have left.

For example holidays should be in the spend part of the budget not the savings part.

how much did you really save a month over the last 2 years after you dipped in?

That's a better indicator of how much you have to play with and keep the lifestyle you have.

Sounds like this move could clear you out of a lot of your savings and reduce the ability to rebuild.
emergency fund for loss of job got one of those?


£300k should not be a problem but a way to check is start pretending you are already paying the bigger mortgage and bills if a bigger house, put that extra amount to one side and don't touch it for anything.