Remortgage Confusion RE Furlough & Estimated Value

RealBobbyDazzler

Hi,
Just had our remortgage letter from Nationwide, end of our 1.64% fixed rate is 30/09/21 so have a while, but thinking of taking the switch now.

They’re offering us 1.29% fixed for 2 years, but with a £999 setup fee.  

However, I can get a better rate through switching to Barclays at 1.18% and £35 product fee, so already a decent saving just on the fee alone which would make it worthwhile.

Here’s where my problems come in, I’m currently furloughed and have been since April last year.  I’m on full pay & work have confirmed we will all be back, but we work in the airline testing industry hence work currently furloughing us.  I presume this will be a safer bet with Nationwide with us already being their customer rather than applying direct through Barclays.

The second hurdle, Nationwide IMO have overvalued our property but it’s putting us at 68.9% LTV opening up better rates, if I copied this figure into the Barclays application do they tend to use the same valuation, or am I going to come stuck here with them rejecting us for that rate and offering us products in the above 70% LTV range.

And lastly, if I were to apply for Barclays and got rejected.. could I then accept the Nationwide offer or would this now be null & void.  I haven’t actually told Nationwide I’m furloughed as haven’t had to change our payments with me still being paid & my partner still in full time employment.

Just a little concerned as although I’m confident in my job & works promises, a lender might not be….

Would really appreciate any help & advice as I don’t want to be greedy trying for a better deal in the position I’m in on paper.

Thanks all!

K_S

@RealBobbyDazzler Assuming no change in borrowing or term, what Nationwide has offered you is a retention/product-switch/product-transfer/rate-switch (different from a remortgage which involves moving lenders) and normally this will not involve any income checks, credit checks, etc. So your furlough should not come into the picture.

Barclays is actually one of the very few lenders that may consider people on furlough and take into account the income being received. Irrespective of what value you put on the application (the Nationwide one is a reasonable one to start off with), Barclays will do their own valuation.

Personally, as a borrower on furlough, I would need a very good reason to go through all the bother of a remortgage (with an outcome that could well result in a decline) and would seriously consider staying with Nationwide on a rate-switch.

RealBobbyDazzler

K_S said:

@RealBobbyDazzler Assuming no change in borrowing or term, what Nationwide has offered you is a retention/product-switch/product-transfer/rate-switch (different from a remortgage which involves moving lenders) and normally this will not involve any income checks, credit checks, etc. So your furlough should not come into the picture.

Barclays is actually one of the very few lenders that may consider people on furlough and take into account the income being received. Irrespective of what value you put on the application (the Nationwide one is a reasonable one to start off with), Barclays will do their own valuation.

Personally, as a borrower on furlough, I would need a very good reason to go through all the bother of a remortgage (with an outcome that could well result in a decline) and would seriously consider staying with Nationwide on a rate-switch.

Thankyou, I didn’t realise it was a rate switch rather than a remortgage as such, thanks for clearing that up.. I just presumed they used your previous details unless notified of a change.

I think I’ll take your advice, plus the fact of if Barclays valuation differs putting me into the 70%+ LTV, I know house prices are on a temporary up but the valuation they’ve given seems abnormally high, it’s up 60k from 2 years ago….