Remortgaging or Switching Rates

Shelly987

Hi there, long time reader, first time poster!

I have a few questions/ queries, which overlap...

Firstly, I am on a 2 year fix with Nationwide. During this two years, my partner and I have had a baby and she has returned to work on less hours. So overall our net income is down vs when we took the mortgage. Looking at the rates we are likely to be offered at remortgage, the payment won't have decreased massively after so I'm worried that we may fail affordability for the remortgage. Not sure if I'm worrying too much about this - it must be a fairly common scenario for a couple to get a mortgage, have babies and then have less income (not to mention more outgoings). Has anyone got an experience of this? For what it's worth, we have no concern about us being able to actually afford the payments.

This led me to looking at switching mortgage with Nationwide because I understand at switching there are less affordability checks (if any). This actually isn't a bad option because their rates would be amongst the best.

However, (and aware I'm possibly being greedy now!) I would like to get below 75% LTV. A few options to achieve this; one, the house price has increased enough to put us in that band (unlikely). Two, the house price increases a bit and we put in savings to cover the rest (could be a stretch). The key dependency here is the valuation. Those savings I mentioned could be used instead to make home improvements to help push up the valuation. However, this then brings me back to switching to avoid affordability - from what I have read this is all automated and it will give an automatic valuation. If I want to dispute that and inform them about home improvements etc. then I'm worried I'll take it off the 'automated' path and bring in human involvement and therefore potentially open myself up to affordability etc.

Any experience/ recommendations/ words of wisdom welcome! Thanks.

amnblog

Yes, a drop in income after a purchase a family builds is common.

Do Lender's make allowances for it - no.

Will Nationwide offer a competitive rate without worrying about affordability - yes.

Are you likely to get an improved valuation on re-mortgage - no.

Re-mortgage valuations are conservative as a pattern and 'improvements' do not improve the valuation in the way that 'extensions/conversions' might.

Shelly987

Thanks amnblog. Thought that might be the case but I would imagine lots of young families must get trapped based on affordability, however I don't seem to be able to find many articles about it, which surprises me. However I suppose if their lender remains competitive-ish then it's not the end of the world.

Appreciate your comments on re-mortgage valuations. Looks like I'll have to find out what their valuation is and whether it is realistic to put down cash to reach the next LTV.