Likely to be declined remortgage due to childcare costs. Any other options?
Taucher
Posts: 78 Forumite
Two years ago my wife and I applied and were accepted for a mortgage. We were advised at the time that only one or two lenders did not take childcare costs into account at all when assessing affordability. The mortgage, fixed for 2 years on our three bedroom house, was cheaper than our rent on our two bedroom flat so we were happy. For info, our childcare costs at the time were about £1100 per month.
Now, when trying to remortgage ahead of the end of our 2 year fixed term, I have been told that now ALL mortgage lenders take into account childcare costs. As our son is now 3, our monthly childcare cost is about £500 (almost totally covered by childcare vouchers) but I have been told that affordability is now not sufficient for a new fixed rate. So now we will go on the SVR and pay £200 per month extra because we can’t afford to be fixed at a lower rate.
Are there any other options in my situation? It feels like a weird one.
Now, when trying to remortgage ahead of the end of our 2 year fixed term, I have been told that now ALL mortgage lenders take into account childcare costs. As our son is now 3, our monthly childcare cost is about £500 (almost totally covered by childcare vouchers) but I have been told that affordability is now not sufficient for a new fixed rate. So now we will go on the SVR and pay £200 per month extra because we can’t afford to be fixed at a lower rate.
Are there any other options in my situation? It feels like a weird one.
Januray 2015
CC - £2100 NOW £1222
CC - £1006 NOW £890
LOAN - £2100 NOW £0.00
OD £810 NOW £0.00
CC - £2100 NOW £1222
CC - £1006 NOW £890
LOAN - £2100 NOW £0.00
OD £810 NOW £0.00
0
Comments
-
As long as you’re up to date with your mortgage payments, your current lender should be able to offer you a product transfer or client retention product.
These are usually available to be chosen on line without any further affordability or credit checks.
I’m guessing your current lender might be Nat West?I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
LRmortgage wrote: »As long as you’re up to date with your mortgage payments, your current lender should be able to offer you a product transfer or client retention product.
These are usually available to be chosen on line without any further affordability or credit checks.
I’m guessing your current lender might be Nat West?
Thanks very much for your reply. Yes, my lender is NatWest! You definitely know what you are talking about.
My mortgage advisor was keen for us to try and apply for a new mortgage with a different bank (our affordability is borderline according to her, but worth applying for) but she didn’t mention staying with NatWest as an option at all and in fact suggested we would fail their affordability. Maybe naive of me but have I been badly advised as they hope for a fee for fixing a new mortgage with a new lender?
Our current mortgage is very affordable for us and we’d probably chose to pay more and fix for five years. We have certainly not missed any repayments.
Will definitely call NatWest tomorrow.
Thanks again I really appreciate it!Januray 2015
CC - £2100 NOW £1222
CC - £1006 NOW £890
LOAN - £2100 NOW £0.00
OD £810 NOW £0.000 -
Don't call. Apply online.0
-
Nat West won't check you for affordability if you are already with them. You are not applying for a new mortgage, just a product transfer. Apply online. Not sure why you went to a broker.I’m a Forum Ambassador and I support the Forum Team on the Debt free Wannabe, Budgeting and Banking and Savings and Investment boards. If you need any help on these boards, do let me know. Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing forumteam@moneysavingexpert.com. All views are my own and not the official line of MoneySavingExpert.0
-
Did your old broker contact you as they knew you were coming to the end of your fixed term?
Did you find them through the estate agent? Sounds to me as though they are looking for a new lender and the associated commissions which feels a bit naughty to me.....
As others have said - switch product online to a new fixed deal and you will be fine.1 -
I don't understand if your childcare costs are covered by vouchers why this is an issue - but that is a bit of a red herring and as the other posters say you should be able to get what you want directly with NatWest
I remortgaged and it was a bit of a hassle because I wanted to bring the term down by 2 years. I should (and you should) leave as much the same as possible - if not you may get reassessed
depending on the size of your mrotgage you may find the product fees for changing each 2 years may be taking away a lot of the benefit so do consider longer fixes - not entirely a bad idea anyway with current interst rates and brexit uncertaintyI think I saw you in an ice cream parlour
Drinking milk shakes, cold and long
Smiling and waving and looking so fine0 -
... because the cost is deducted from salary, hence affecting mortgage affordability?I don't understand if your childcare costs are covered by vouchers why this is an issueI am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Ah OK - sorry I thought it was some government scheme not benefits options. Been a while since my little cost centres were in pre school.
I can assure you that when they go to primary you will notice the benefit but maybe not quite as much as you expectI think I saw you in an ice cream parlour
Drinking milk shakes, cold and long
Smiling and waving and looking so fine0 -
There was only Natwest as far as I was aware but they started to include it 4-5 months ago I think.
Why not just log on to natwest website and choose a new product?
Its a doddle to do. You choose a new product and they post out some paperwork for you to sign and thats it. Depending on the balance of your mortgage, you may even find a broker prepared to do it for nothing.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
My pleasure.
Just do it online with Nat West and you should be all fine and dandy.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
This discussion has been closed.
Categories
- All Categories
- 343.2K Banking & Borrowing
- 250.1K Reduce Debt & Boost Income
- 449.7K Spending & Discounts
- 235.3K Work, Benefits & Business
- 608K Mortgages, Homes & Bills
- 173K Life & Family
- 247.9K Travel & Transport
- 1.5M Hobbies & Leisure
- 15.9K Discuss & Feedback
- 15.1K Coronavirus Support Boards