What are my Remortgage Options

jcolls

Hi All, found this site after purchasing the Money Diet book. Which I am steadily working through.

I am looking to re-mortgage to save some money but have the following dilema.

Since Purchasing my house with my partner 3 years ago we have both been made redundant, have new lower paid jobs and now have a baby. Our Income has therefore dropped from Approx £36k to around £24.

We currently have a £95k Mortgage plus a 11K secured improvement loan. The house is valued at around £210k

What I want to do is merge the two together with a new lender in the hope to get a better rate and save money.

I have been to my current lender who has said that in order to merge the two I would need to take out a new mortgage (remortgage). But due to our lower income will not pass the initial 3x salary check and therefore not get a new mortgage.

We are on a discounted variable at the moment with no tie-ins so can move. But with our salaries being what they are we would need a lender to give us 5x our salary.

So my question to you experts are, what advice can you give us before I start going around the lenders and seeing what they can do?

payless

check out the penalties on finishing the secured loan!

Fairdo_2

After this, you would need to look at lenders that may take into account affordability.

Again, I am wary of naming particular lenders, but there are a few that might take affordability into account, subsequently may go to 5 x salary. It is a bit harder to get a lender to do so at the moment, as lenders are being scrutinised very thoroughly with the new mortgage regulation.

Not a position I particularly agree with, but some lenders allow a better borrowing facility to those who opt for a longer term Fixed Rate, along with the all important "Credit Score".

Basically, although lenders do not normally advertise their discretion, they often have instances where they can take other circumstances into account (Tax Credit, Maintenance receipts, car allowances etc)

Therefore, the door is not necessarily closed. I would beware of lenders credit scoring you until you are sure that is the lender you wish to proceed with. This is because each credit score provided in a short space of time starts to count against you.

However, some lenders will not give confirmation of borrowing until this has been carried out. Catch 22.

There is a website that may help you to get an idea of your credit rating. https://www.equifax.co.uk has an instant option (at a cost). Also, for fairness the other 2 major credit reference agencies are https://www.experian.co.uk and https://www.callcredit.co.uk

Some will also look at what you are currently paying and will take that into account to show current affordability.