Mortgage Prisoner HELP

paulamarie76

Hi, so background. I bought my house on my own 12 years ago. Mortgage with Northern Rock, I have never once missed a payment or even been late on a payment on any bill for that matter. I got married last year and since have been trying to remortgage. We have paid off all our debt (credit cards) which was negligible to be fair. I am self employed and my husband is a HGV lorry driver. We have 2 car loans both which end on July 2020, we also own a static caravan which has a loan on it, the rental income from the static pays the loan. (The loan ends in 5 years) We tried to remortgage yesterday and even though the payments on a fixed rate for 5 years are less than we pay now, they deemed us unable to afford it, despite the fact we have been paying more than that and for a large number of years I paid it on my own as a single mum. They said on the stress test we would be unable to afford the new mortgage, (the stress test was a teeny bit above the rate we are on already) but won't take into account the fact that we are trying to get a 5 year fixed rate so the stress test in 5 years when the caravan loan is paid off means we are in a much better financial position. (We can afford it now as we are paying more already) I am so stressed with all of this and just don't know which way to go now. Advice would be welcome.

BoGoF

They are not interested in your financial position in 5 years, they look at now. Have you spoken to a broker?

paulamarie76

Waiting for a call back, how can they deem we cant afford something that's less than we pay now though? Makes absolutely no sense at all.

csgohan4

it's regulations to ensure affordability and when interest rates go + 5% on top of your current.


Lender's have to show that you can afford rates if they go up which they will, otherwise they risk having their license removed.




You can't blame them really, people with self declared mortgages previously are now struggling because they fudged figures to afford high mortgages.

paulamarie76

Its not a high mortgage I didn't borrow high, I had a £20K deposit and my mortgage is £144K. I also didn't fudge my figures either, it was just the mortgage rate was the best one on offer.

BoGoF

With 2 car loans and another loan to service that must be a decent proportion of your monthly income.....you don't say what your level of income is.

paulamarie76

The caravan loan is covered by the caravan rental income. My car loan goes through my business. All bills, loans etc including food and fuel come to £2200 approx a month. I am self employed so my income can fluctuate each month. My husband is PAYE employed £28K a year I am self employed gross £25K (Nett £16K) (based on last year) So we have about £1-2K left each month depending on the month. This is why i cannot fathom why we have been knocked back. Believe me when I say we are not living outside our means whatsoever. We have no other debt, our wedding cost £12K which we paid last year. Both our credit scores are high. Neither of us have defaulted in the past.

kingstreet

Caravan rental income, eh?

Being declared to HMRC? Have SA302s/Tax Calcs to confirm this?

paulamarie76

kingstreet wrote: »

Caravan rental income, eh?

Being declared to HMRC? Have SA302s/Tax Calcs to confirm this?

yes actually I have them for the past 2 years for the caravan, unsure of your comment to be quite honest???? Being self employed for the past 15 years I pretty much know how SA works but thanks for your comment. Which is unhelpful to be quite honest.

getmore4less

What the current house worth and mortgage size?

kingstreet

paulamarie76 wrote: »

yes actually I have them for the past 2 years for the caravan, unsure of your comment to be quite honest???? Being self employed for the past 15 years I pretty much know how SA works but thanks for your comment. Which is unhelpful to be quite honest.

Ah, okay.

I'll keep my suggestion to myself then, seeing as I'm so unhelpful.

I'm sure another broker knowing this might now have the same thought.

All the best.