Help: reduced income, huge mortgage, end of deal

Spendless

dccarm wrote:

My apologies. I'm still living in the distant past where I studied tax. Things have changed since then...

Did you used to be able to then? There is a member who has written a complaint to his MP about this and the way the tax credit system works. Sure he would be interested to know if you used to be able to do it. He has a thread on marriage/relationship board about government doesn't want mums to stop at home if you would like to post on there.

dccarm

I think I'm getting confused with Ireland ( I lived there for 5 years) where joint election is possible. From this article here it certainly seems like a much more favourable system for maried couples.

dwsjarcmcd

I guess one of the questions you need to ask is can you afford the mortgage now and until the end of the discount period. If you can, I would go back to the Derbyshire and see what their product range is at the time. Personally I think you will need to accept whatever they have available. One final thing, I would (personally) change to interest only, if you are paying Capital and Interest until things improve. Good luck!

gingerdad

dccarm wrote:

I think I'm getting confused with Ireland ( I lived there for 5 years) where joint election is possible. From this article here it certainly seems like a much more favourable system for maried couples.

You can also still combine tax allowances on the isle of man, and also claim back your loan/mortage interest against your tax as well. we could earn 24K before we paid any tax

but hey i moved back to the uk.

the_weasel

We're not in a position to sell: good schools, local ties with the nipper (only one so far BTW), fantastic neighbours and simply liking where we live, although of course looking for a better paid job.

Only one car (cheap one), as one of my benefits is a company car
No-one's actually answered the question about third-party guarantees though....?

jonesMUFCforever

the_weasel wrote:

We're not in a position to sell: good schools, local ties with the nipper (only one so far BTW), fantastic neighbours and simply liking where we live, although of course looking for a better paid job.

Only one car (cheap one), as one of my benefits is a company car
No-one's actually answered the question about third-party guarantees though....?

If you can't make the repayments then the decision to sell or not will not be yours to make!
The question of third party guarantees can only be answered by your building society.Just remember a guarantee is just a piece of paper unless backed by security. They may want to put a charge on the third party's property to safeguard this or have to lodge a cash sum equal to the amount of the guarantee.
You, I think also have not answered the question about whether your wife is likely to start working again or provide us with a breakdown of outgoings as per my posting 7 in this thread.
Eric

MarkyMarkD

I think it will be very difficult to get a competitive product given the huge income multiple you want. On that basis, it will almost definitely be better to stick with your existing lender who won't ask you anything at all about income, or credit score you again, on a product switch.

There's no reason why anyone should ever pay SVR, so whilst it's good regulatory advice to consider the repayments on SVR, it's actually academic for most people. That said, you need to consider what would happen if rates (surprisingly, at the moment) rose - going for a longer fixed rate might be more prudent than a discount/tracker. BUT if you are looking for a new job, which might entail moving, you need to ensure that the mortgage is portable (which most are).

Guarantors are a complicating factor and will, once again, restrict the choice of lenders meaning that you won't get the most competitive deal. So I'd suggest the same lender, product switch, option above all others unless the existing lender offer you a ridiculously bad deal.

Fairdo_2

abc wrote:

Have you asked your existing lender what will happen when the discount period ends? Will they offer you another discounted rate without having to make a full application again.

I recall just before my discount period ended my lender wrote to me saying it was about to end and inviting me to switch to another discount rate. It tied me in for another 2 years redemption penalty wise and I had to pay a fee of around £200 but as I didn't expect to move within the 2 years and it saves around £100 per month in mortgage payments I thought it was worth it.

I didn't have to fill in any application form, just sign a form to amend my terms and conditions. From what I recall they didn't enquire or ask me anything about my employment or salary at all.

Well done abc for your practical suggestion. It is well worth speaking to the Derbyshire and asking what product(s) they can offer at the end of the deal.

As they are a Building Society, there are good prospects of them treating you reasonably well in this matter.

However, nearer the time, 3 to 4 months from the end of the charge period, it would be worth you looking around (maybe visa a broker to fight your case for you) and see what rates are doing comparably, as you may have some options then.

For instance, I have mentioned this on other threads, but some Lenders would be prepared to take a view on an affordability basis. This means that if you have been managing on a slightly higher rate and have not gone into debt by doing so, they can justify that they have provided a responsible attitude to lending, as you proved you could cope on higher payments.

In answer to your Guarantor question, yes it can, dependent on that guarantors income and commitments.

I will disagree with a previous OP that they would not expect to take a charge over any of their security, but they would expect to call on that person if you did not make your payments.

jonesMUFCforever

I will disagree with a previous OP that they would not expect to take a charge over any of their security, but they would expect to call on that person if you did not make your payments.


If the guarantor were called upon and was unable to pay please advise, what the building society's next plan of action would be??
Eric

Fairdo_2

ejones999 wrote:

I will disagree with a previous OP that they would not expect to take a charge over any of their security, but they would expect to call on that person if you did not make your payments.


If the guarantor were called upon and was unable to pay please advise, what the building society's next plan of action would be??
Eric

The security the lender takes is on the property being bought, NOT the Guarantors assets.