Trouble Remortgaging

xsussax

My husband has a steady job and earns £44,500 a year.  I am a full-time NHS based student who brings in £7,250 in student loans and £5000 which is an NHS Training Grant.  I also earn some money on a zero hours contract here and there to help to-up my earnings. 

I have an unsecured loan, which ends in 2 years, as well as a credit card.  My husband has an unsecured loan that ends in 11 months.

Our mortgage deal is due to come to an end in August.  We owe £87k on it, we have never missed a payment and we have good credit ratings overall.   Our house is worth £141,000.

We spoke to a mortgage adviser about remortgaging but he essentially said because I am a student what I bring in cannot be counted, not even my Training Grant which is non-repayable.  

He then went on to say because of this, my husband would look like he is paying all my debt and no lenders will give us a deal because of it.

Our current lender, Norwich and Peterborough, who we have been with since we bought our house, no longer does mortgages.  We called YBS, who took over N&P, to discuss the deal that they had sent us.  Apparently, they offer a 'streamlined' service to N&P customers and we are booked in on Friday to see if they can help us.  I do not know what 'streamlined' means?

I am really starting to panic.  If we are left on interest-only, it will make life very difficult and I fear how much it will get to once interest rates have reached a maximum.  I am starting to regret returning to university to upskill.  I have 2 years left of being a student, but I do not know how feasible this will be if no lender will secure us on to a deal as I will have to return to work.  

Does anybody have any advice?

Thank you.

ACG

Your income probably cant be used, at least not for the majority of lenders. 
But an income of £44k should be able to support an £87k mortgage. 

Although you have not said how much the credit cards/loans are and how many children you have but unless it is a lot of debt and/or a football team worth of children I would be surprised if it does not pass affordability anywhere.

I reckon you will be fine with YBS but there would be no harm speaking to another broker as the one you have spoken to atleast regarding your debts is talking rubbish. 

sammyjammy

What do you mean by "on interest only"?  If your mortgage is a repayment one currently it will remain that way, if you cannot remortgage with another lender and your current lender no longer  offers mortgages your only option would be to remain with your current mortgage and pay their standard variable rate, do you know what that is?

K_S

@xsussax I would echo what ACG said above. With 44k PAYE income and an 87k mortgage, I can't imagine it would be too difficult to remortgage at 60-65% LTV.

If you are currently on an I/O mortgage, you may have to switch to repayment as it's unlikely that you'll qualify for an I/O mortgage as per current rules given the limited info in your post.

YBS rates are usually competitive so you won't be missing out by much, but while you're waiting for your appointment, it might be worth speaking to a whole of market broker to see what your options are.

xsussax

Hi 

We have no children and my loan is £9000, credit card around £5k.  Husband's loan is about £3000.  

If we move on to a SVR, it will be about £100 extra a month, which is significant with the cost of living rise.

ACG

Ah, so you are paying around £700 a month on loans? 
I have not done the figures but I suppose that could be having an effect. It should be possible to place the mortgage, but you "might" need to wrap up some of that debt into the mortgage.

Speak to a broker. 

xsussax

Thank you @ACG, you have been most helpful. Yes, we pay around that every month I am afraid, but we can more than afford it on my student earnings.

We're not really wanting to consolidate any debt on our mortgage seen as it is short-term debt that we have.  I had calculated that if we kept chipping away at our loans, we would be debt-free by the time I finished uni then we could be nice and ready to upsize our house once I'm settled in my career.  However, we will take on board what you say and if it stops us from going on to the SVR, which is worst case scenario, we'll consider it.  I wasn't even aware mortgage companies would lend for this reason.

Do you have any knowledge about how mortgage companies who take on other companies' mortgages might be with coming up with a new deal for us? I'm unsure about the meaning of being told in that the application process with YBS would be 'streamlined for us'.  Hopefully that means it'll be easier to get some kind of a deal!

fergie_

How did you get on with YBS?

If that route doesn't work, you definitely need to speak to a whole of market broker. There are mainstream lenders who take into account other forms of guaranteed income, but they tend to treat that element at a much lower ratio (potentially even 1:1) in regards to the amount they are willing to lend.