Mortgage/Gen advice needed, logical brain has taken a jolly after birth, I think...

Lizbetty

Good afternoon folks!
I hope that you can help me...I used to be really on the ball with this kinda stuff having worked in mortgages/savings a few years ago, but since the birth of daughter 12 wks ago, I really don't have any energy for proper logical financial thought, which I could do with as I'm a stay-at-home-mum now and we're seriously skint. If I could give you the basics maybe you could help me to figure out what to do for the best? I don't like the thought of our money not working to it's full potential, and the more canny I am with it, the longer I can stay off work with Daisy! All good. But very confusing on so little sleep.

This is the story so far:

• £58500 repayment mortgage with 'Intelligent' Finance (yeeeuch) in my sole name, £355 per month - had to go with them following split with ex and needed increased income multiples, have it over (gulp) 30 years, about 28 years left
• £10k savings with Intelligent Finance offsetting against aforementioned mortgage (from sale of now husband's previous house)
• Standard 185 shares with HBOS (the dividends are always a nice surprise when I'm completely brassic, but prepared to shift em if needs be)
• £1200/1300 PEP with Jupiter (initally £1500, but hey..)
• Husband's salary of £16,500pa
• Tax credit of £1990pa
• Standard child benefit of £884 pa

I've only just gotten round to asking for R85's, not sure how beneficial these'll be with an offset mortgage, if at all, as I just can't get my brain into gear.
If we transferred our mortgage, we'd have to pay for a transfer of equity into joint names as it's still in my sole name, til then we're stuck with Intelligent Finance's 5.7% offset mortgage and they won't offer me anything better due to my lack of income cos it's in my sole name. Ideally I'd like to take a new mortgage with a decent firm over a shorter term. We're not into holidays and don't have any other loans at the mo.
If anyone can help me to sort out this mess that I can't seem to focus on I'd be soooo grateful. I hop ethat this is enough info...I'm typing this and rattling a Fisher Price arch at the same time to keep Daisy from crying...I hope this doesn't come across as lazy...I have tried but then the baby usually starts crying, etc, bless her, and that's the whole thing down the drain. Thanking you so much in advance! Luce.

Joe_Bloggs

The value of the property is useful fact to have when considering remortgage options. Having existing equity together with savings can get you a better deal. Request a redemption statement from I.F. You may be contacted by the loyalty department. They offered me 0.5% of SVR before I left. It cost me £140 to leave them.

If say £8000 is used as a deposit then you only need £50500 to remortgage.
This gives a worst case mortgage to income multiplier of 3.05 (single income only no tax credits etc). I'd say you can pick and choose from the entire market if your credit rating is good and debt is minimal.
Congratulations on the baby

J_B.

Lizbetty

Thanks for that - the house is worth about £130k-ish so it's good ltv, about 45%. Not sure whether it's worth sticking with an offset mortgage and transferring everything we have in savings over though - or to get a good fixed rate and leave the savings be..also not sure how to use my non-tax paying status to it's full potential. Any ideas? I'll definitely ask IF for a redemption statement, good thinking. Hopefully it'll get them wanting to keep our business, no credit problems in the past so hopefully we're worth buttering up???? Ta again, Luce.

Joe_Bloggs

It looks like you are in great shape. The x3 income multiplier is very conservative and old hat, the LTV is excellent. You may be able to keep more of your savings and borrow more. You might be able to save the 20% tax interest with the R85 given alternative mortgage/saving scheme. This would earn you only £100 more per annum on the 10K (@5%). You could each get 3K instant access cash ISAs regardless of tax.

Some lenders have quirks about the types of property they will lend on. Some ignore all debts yet count tax credits and state benefits. More strict lenders ignore tax credits and state benefits and make existing debt count against how much they will lend.

So many financial institutions rely on consumer inertia. If you have the get up an go you can go get the best for yourself.
J_B.