Remortgaging after a reduced salary

Hannimal

zagubov said:

Changing the length of the term might be another trigger for a credit check. You might want to ask about that. We found that when we re-mortgaged they'd toughened up their criteria since the financial jitters of the late noughties.

Wouldn't it be the same term? I.e. started with a 35 y term, 5 years later renewed product with a 30 y term?

Hannimal

MFWannabe said:

Tbh 4 years is a long way off to be worrying about it now, a lot can happen in that time 
Take the job as that is what you want to do and think about all this in 4 years time when your current fix is due to end. 

If you can make any kind of overpayments in that time even better 
In 4 years time look what your current lenders offers are and take it from there. If you stay with current lender there are no checks. 

Also it’s not always the case that current lender is dearer, ours certainly wasn’t, we got a great deal 👍

Yeah 4 years is a long time but I am looking at going from a ~£45k salary to ~£30k. So whilst it is a long time, I think it is reasonable to think about this. Realistically if I stick with the role I am thinking of getting, in 5y time I might be on £36k max, compared to ~50k in current role. Big big difference.

bravotango

Just a side question...

At what point does the current lender "normally" notify the mortgagee about new deals (renewal or remortgage) before expiry? (assuming that is how it works?)

If the lender doesn't "normally" contact the lender, at what point should the mortgagee ask their current lender about new deals (renewal or remortgage) before expiry? (3 months?, 2 months?)

Thanks

MFWannabe

bravotango said:

Just a side question...

At what point does the current lender "normally" notify the mortgagee about new deals (renewal or remortgage) before expiry? (assuming that is how it works?)

If the lender doesn't "normally" contact the lender, at what point should the mortgagee ask their current lender about new deals (renewal or remortgage) before expiry? (3 months?, 2 months?)

Thanks

Think it depends on the lender; ours we could change 3 months before 👍 
If you can’t find the info on your lenders website call them to ask when you can change without incurring any ERC 

MFWannabe

Hannimal said:

MFWannabe said:

Tbh 4 years is a long way off to be worrying about it now, a lot can happen in that time 
Take the job as that is what you want to do and think about all this in 4 years time when your current fix is due to end. 

If you can make any kind of overpayments in that time even better 
In 4 years time look what your current lenders offers are and take it from there. If you stay with current lender there are no checks. 

Also it’s not always the case that current lender is dearer, ours certainly wasn’t, we got a great deal 👍

Yeah 4 years is a long time but I am looking at going from a ~£45k salary to ~£30k. So whilst it is a long time, I think it is reasonable to think about this. Realistically if I stick with the role I am thinking of getting, in 5y time I might be on £36k max, compared to ~50k in current role. Big big difference.

That’s more of a question if you can afford to take the new role though? 

Can you afford your current payments if you took new role? 

There’s too many unknowns to be thinking 4 years ahead:
what will your property be worth? Therefore what will ltv be? 

What will interest rates be? 

No way can anyone know this 🤷‍♀️

RelievedSheff

Tiglet2 said:

Re-mortgaging does come at a cost. 

After a 5 year fix, I re-mortgaged with a different lender.  I had a product fee, an exit fee and a valuation to pay for.  I also did not pay the mortgage broker.  I had free legals offered by the lender with Optima Legal (although they were representing the lender, not me).   The lender required full credit checks and I had to provide every piece of paperwork they required and then some, even though the LTV would have been around 20%. 

Optima also proved to be very slow...... so much so that I was on the standard variable rate with the original lender for several months before Optima completed the re-mortgage. 

My mortgage product is better for my circumstances now, but it did seem like a whole lot of faff.  Had I known what a long drawn out process it was going to be, I would have just switched to another fixed rate deal with the original lender where no additional checks would have been made.

We are in the process of remortgaging to a new lender at the moment. We know that any offers our current lender will give us are not going to be as good as the high street rates we can now get.

We have started the remortgage process this month even though our current fixed rate doesn't end until the end of April. We have the mortgage offer in place and the free legals offered by the mortgage company are through Optima. We are hoping that as they have over three months to go before our current mortgage product expires then they will have plenty of time to sort out the remortgage legals side. They seem to have been pretty on the ball so far and their online portal for following progress is very helpful. We have submitted any documents requested pretty much as soon as we can to avoid any delays from our side.

This is the first remortgage we have done and so far have to say that the process has been very straight forward. We have got free legals and free valuation with the mortgage product that we have chosen and the mortgage offer was issued three days after we submitted the full application. We opted not to use a broker as we have a relatively straight forward case.

There will be some costs involved. We have added the £995 product fee to the mortgage and we have a redemption fee of £145 and a deeds release fee of £45 from our current lender. But the much better interest rate we have got from our new lender far outweighs any minor costs involved with remortaging. 

We certainly will be looking to remortgage again rather than just switch products when we get to the end of the 5 years fixed rate to make sure that we get the best rates possible at the time.

caprikid1

theartfullodger said:

Find out the rates!

Your broker is still making money out of your remortgaging.

Good luck

Many lenders are now paying retention bonus's to brokers so it is not the advice minefield it use to be.

Niv

bravotango said:

Just a side question...

At what point does the current lender "normally" notify the mortgagee about new deals (renewal or remortgage) before expiry? (assuming that is how it works?)

If the lender doesn't "normally" contact the lender, at what point should the mortgagee ask their current lender about new deals (renewal or remortgage) before expiry? (3 months?, 2 months?)

Thanks

With nationwide you can switch to a new deal with them with 5 months to go.

zagubov

Hannimal said:

zagubov said:

Changing the length of the term might be another trigger for a credit check. You might want to ask about that. We found that when we re-mortgaged they'd toughened up their criteria since the financial jitters of the late noughties.

Wouldn't it be the same term? I.e. started with a 35 y term, 5 years later renewed product with a 30 y term?

Apologies, I misread your post. You're right!