Removing Person from Mortgage

BikingBud

Brie said:

claaire3 said:

Yes luckily I have a trust fund that my dad set up when I was younger so I should just have enough - I've already proved to them I have the money but no budging to a lower amount they say - I would find this all a lot easier to process if they talked it through properly on the phone, but their phone operators just repeat the same things to you with no context.

It's just a shame that all my savings would then be gone and nothing to fall back on but that's life I guess!!

Well the savings won't actually have gone, they'll just be elsewhere.  Sitting in your house saving your %% every day which is great. Sounds like a good use of the fund dad set up in my opinion.  

This absolutely. 

See what you might be able to achieve not only to get into the affordability bracket but also to trade capital now  against that horrendous interest burden.

If you could get the loan down to £75k, investing £35k of your capital,  5.65% for 300 mths @£467 could save you ~£19k in interest.

Other interest rates, figures and values will obviously lead to other outcomes.

Although the money might appear to work better, ie get more interest elsewhere, the direct benefit of you keeping your home makes this definitely worth discussing and considering. 

claaire3

This absolutely. 

See what you might be able to achieve not only to get into the affordability bracket but also to trade capital now  against that horrendous interest burden.

If you could get the loan down to £75k, investing £35k of your capital,  5.65% for 300 mths @£467 could save you ~£19k in interest.

Other interest rates, figures and values will obviously lead to other outcomes.

Although the money might appear to work better, ie get more interest elsewhere, the direct benefit of you keeping your home makes this definitely worth discussing and considering. 

Thank you for your help. Although I wouldn’t be able to get the loan down that low, my monthly payments will be much lower now which should allow me to make overpayments in the future and get the term back down to a reasonable number I hope! 

claaire3

They are stress testing you on the variable rate rather the rate you are paying now. If you took out a mortgage 3 years ago you are probably paying 2.x% where are now it would be closer to double that and the stress testing rate higher still. 

The £13k does not have to come from you, it could be a gift. They are not saying you can afford a £13k lump sum, they are just telling you what they can do. That is all they can do. 

Sorry, I am reading my posts back and I sound like I am being a bit of a (use any word you like here). Its not supposed to. I can imagine its frustrating. But its not Virgin being awkward, it would be the same for all leners pretty much. 

Funnily enough, I had something similar with Skipton building society for a customer a couple of years ago and they have a rule that says if you can show you have paid the mortgage on your own for 6 months they can have some flexibility on affordability. The lady I did it for was not passing affordability as they were only using some of her benefit income, but had they used all of her benefit income it would have passed. They bent their own rules, but as far as I am aware they are the only lender with that flexibility. 

Yes you’re right, it is based on my current rate of 2.6% and I understand they will be basing it on higher interest rates. I took all that into consideration when I put my figures into their online calculator, trying higher numbers etc and it still said I’d be able to borrow more than £100,000,
Don’t worry, I respect your honesty and help. I just needed some clarity from other people that Virgin aren’t completely ripping me off as it’s been quite frustrating getting my head round it all, at what’s already been a stressful time!
That sounds like Skipton are doing a good thing being flexible with that, if only it was that easy with Virgin!

ACG

claaire3 said:

They are stress testing you on the variable rate rather the rate you are paying now. If you took out a mortgage 3 years ago you are probably paying 2.x% where are now it would be closer to double that and the stress testing rate higher still. 

The £13k does not have to come from you, it could be a gift. They are not saying you can afford a £13k lump sum, they are just telling you what they can do. That is all they can do. 

Sorry, I am reading my posts back and I sound like I am being a bit of a (use any word you like here). Its not supposed to. I can imagine its frustrating. But its not Virgin being awkward, it would be the same for all leners pretty much. 

Funnily enough, I had something similar with Skipton building society for a customer a couple of years ago and they have a rule that says if you can show you have paid the mortgage on your own for 6 months they can have some flexibility on affordability. The lady I did it for was not passing affordability as they were only using some of her benefit income, but had they used all of her benefit income it would have passed. They bent their own rules, but as far as I am aware they are the only lender with that flexibility. 

Yes you’re right, it is based on my current rate of 2.6% and I understand they will be basing it on higher interest rates. I took all that into consideration when I put my figures into their online calculator, trying higher numbers etc and it still said I’d be able to borrow more than £100,000,
Don’t worry, I respect your honesty and help. I just needed some clarity from other people that Virgin aren’t completely ripping me off as it’s been quite frustrating getting my head round it all, at what’s already been a stressful time!
That sounds like Skipton are doing a good thing being flexible with that, if only it was that easy with Virgin!

Every lender has their pros and cons. I am with Virgin money as I am self employed. I leave some of my income in the business and just take out what I need. That means it does not show on my self assessment and so most lenders would not include it (Skipton included). Virgin would though. 

Every lender has things they are good at and things they are not so good at. Not that that helps you. 

It sounds like you can make it work. You can also overpay on your mortgage keeping the payments as they are so your not stuck paying your mortgage off until you need a zimmerframe. Its probably also worth overpaying whilst the rate is low. You might not have that flexibitliy in a couple of years. 

born_again

Maybe have a word with a local broker, as they will have access to the whole market & find a deal that suits you better. 

Hoenir

claaire3 said:

Brie said:

Do you have the £13k?  Is there a friendly family member who would front it for you if you don't have the cash?  (if so you might want to refer to it as a gift if asked about it by the bank)

Your salary is just a gnat's whisker short on the 4x for eligibility.  If you have a way to get the £13k in your back pocket but speak to a manager rather than just an agent about the overpayment and could present a proposal of £7k instead so that you are at the 4x mark maybe that would swing it?  

Banks can be such &^&%$&^%$ at times.  

Brie - 40 years in finance.....

Yes luckily I have a trust fund that my dad set up when I was younger so I should just have enough - I've already proved to them I have the money but no budging to a lower amount they say - I would find this all a lot easier to process if they talked it through properly on the phone, but their phone operators just repeat the same things to you with no context.
It's just a shame that all my savings would then be gone and nothing to fall back on but that's life I guess!!

Phone operators have zero authority. They are not the underwriters. There's no negotiation.  Lenders set the terms on which they'll conduct business. You haven't been singled out either. Policy is set at a much higher level. What you regard as affordable and the lenders does will be from very different viewpoints. 

secla

Is your ex happy with walking away with nothing or is he expecting a share of the equity ?

claaire3

secla said:

Is your ex happy with walking away with nothing or is he expecting a share of the equity ?

He just wants back what he put towards the deposit as I put more money towards it in the first place and we only lived there a year before he moved out, I've taken this into consideration when calculating how much of my savings I need to use.