Help Needed please

Rem0rtg4ge

Help Needed please

TheAble

Didn't NatWest say back in 2018 they couldn't lend you any more for 5 years? May be unlikely therefore they can do much for now but you can always ring up and ask.

You could also have a chat with a mortgage broker. They may be able to offer some insight.

katsu

You might not be able to remortgage with the DMP in place. Are you able to pay everything right now because you are on a DMP?  If so, is it so bad to keep going, other than how you feel about the 7% interest rate? 

If you look at the sticky thread and see the template SOA then post it in this thread having selected format for MSE, that will help people to help you with advice. 

I'm sure there's something you can do and good luck! 

Rem0rtg4ge

TheAble said:

Didn't NatWest say back in 2018 they couldn't lend you any more for 5 years? May be unlikely therefore they can do much for now but you can always ring up and ask.

You could also have a chat with a mortgage broker. They may be able to offer some insight.

Hi, yes that’s right. It’s still the same. I guess my query is around how realistically we would be able to get a new deal with all of the above.  From responses I’ve had, it seems pretty unlikely.

Rem0rtg4ge

katsu said:

You might not be able to remortgage with the DMP in place. Are you able to pay everything right now because you are on a DMP?  If so, is it so bad to keep going, other than how you feel about the 7% interest rate? 

If you look at the sticky thread and see the template SOA then post it in this thread having selected format for MSE, that will help people to help you with advice. 

I'm sure there's something you can do and good luck! 

Hi, thanks for your reply.  Yes we are getting through ok at the moment. We were advised to make the DMP payments quite small in comparison to our disposable income as paying £600 P/M to the DMP would hamper our remortgage chances. 

The main worry is that if the interest rates jump when the 7.99% second mortgage reverts to the SVR, then we could be stuck. I guess it’s the unknown of knowing what interest rates will do that’s worrying us!

TheAble

Have you anything spare in the budget with which to make overpayments on the second mortgage (and are these allowed?) If so I'd just throw anything extra you can at that mortgage to de-risk it as much as possible.

Rem0rtg4ge

TheAble said:

Have you anything spare in the budget with which to make overpayments on the second mortgage (and are these allowed?) If so I'd just throw anything extra you can at that mortgage to de-risk it as much as possible.

Great idea. Yes about £350 per month. Unlimited Overpayments allowed with no charge. 👍🏼 

EssexHebridean

First step here is most definitely the SOA. 

where is that £350 a month "spare" money going currently? Into savings? If so, then you will have an additional lump you can pay off the mortgage in the short term to improve the LTV (potentially to below the 50% mark? that might be a bit of a magic bullet, you never know...). Just make sure you maintain a bit of a lump behind you as an emergency fund, but with that amount spare it doesn't need to be huge. 

I'd be voting in favour of "if it ain't broke, don't fix it" right now - if you can manage things as they are, by all means start to look for options but don't be in too much of a hurry to change things. If it starts to become apparent that interest rates are going to be an issue change your savings/overpayments balance to ensure that you have enough to cover any mortgage fees etc then ramp up the efforts to find a new deal.  The current situation with unlimited OP's available to you on that second charge is helpful, too - that may change to 10% max if you combine the two to a fixed rate. (And if that DOES happen, continue to save anything above that then you have a lump ready to pay when that fix ends). 

Rem0rtg4ge

EssexHebridean said:

First step here is most definitely the SOA. 

where is that £350 a month "spare" money going currently? Into savings? If so, then you will have an additional lump you can pay off the mortgage in the short term to improve the LTV (potentially to below the 50% mark? that might be a bit of a magic bullet, you never know...). Just make sure you maintain a bit of a lump behind you as an emergency fund, but with that amount spare it doesn't need to be huge. 

I'd be voting in favour of "if it ain't broke, don't fix it" right now - if you can manage things as they are, by all means start to look for options but don't be in too much of a hurry to change things. If it starts to become apparent that interest rates are going to be an issue change your savings/overpayments balance to ensure that you have enough to cover any mortgage fees etc then ramp up the efforts to find a new deal.  The current situation with unlimited OP's available to you on that second charge is helpful, too - that may change to 10% max if you combine the two to a fixed rate. (And if that DOES happen, continue to save anything above that then you have a lump ready to pay when that fix ends). 

Thanks for the comment- we really appreciate it. The £350 per month has been for the last 2 months due to promotions. Currently being saved so have £700 as an emergency fund as previously had nothing. Starting from next month we will have options with overpayments. I’ll take a look at the SOA 👍🏼 

EssexHebridean

Nice work - and congrats on the promotions! 

Look at building to a sum of £1000 to start with for an emergency fund (EF) - that's the usual recommended amount for a homeowner. Means you can cover 2 appliances going bang at the same time without needing to reach for a credit card OR leave yourself with nothing. If you have a car or cars too, longer term I'd suggest bumping that to £1500 as a basic, but that can wait for a while. 

When you do the SOA make sure you budget for things like car maintenance etc - if you're not already setting aside money for things like that then it's a good idea to start as that covers the routine stuff without needing to dip into your EF.