Advice on Remortgaging With a Lower Income

TestingCold · 10 April 2018 at 2:58PM

Hi all, newbie here :beer:

I am looking for advice on our situation which is this:

Bought a house with £51k help to buy and £176,500 mortgage in 2016 on 5 year fix.
Currently overpaying by £220 per month with current overpayment sat at around £4,500.
We had our first child in 2017 and planning on another in 2019.
Partner has decided to drop from full time to part time work in order to bring up the children herself in the early years.
This means our income has dropped by roughly £18k/year.
When we come to remortgage we need to borrow roughly £180k to incorporate the help 2 buy (taking into consideration current overpayments for the rest of the term).
If the lenders will only lend 4x salary when we come to remortgage and I haven't had a promotion/pay rise, we are looking at a figure of £150,000 max.

So my question is, if this is the case when we come to remortgage will we have trouble incorporating the help 2 buy portion of the borrowing into the new mortgage? Even if we have demonstrated we can afford to overpay every month on our current mortgage, and we have never missed a payment?

Of course I can only theorise on future circumstances. If you need any more info just ask.

Thanks for any help/advice.

astal · 10 April 2018 at 3:32PM

Not expert and not had any experience with help to buy, but my view is that if you don't change mortgage provider, you don't need to re-apply, hence to resubmit income details. The current lender would be happy that you won't have missed any payments at the time (and credit score fine), and will accept re-mortgage.

TestingCold · 11 April 2018 at 9:36AM

Thanks for your reply. I thought that because we would need to increase the borrowing it would need to be a remortgage and not just a rate switch.

Does anyone know more?

getmore4less · 11 April 2018 at 10:07AM

£51k HTB means in 5 years you need to be at £129k to remortgage back up to £180k

To get your mortgage down to that your mortgage payment will be in the range
@ 1.0% £920
@ 2.5% £1110

With overpayment of £220 that suggest a term of around 22-24 years when you took it out.

Depending on any HPI your LTV may go up as well which means higher rates.

You may need to extend the term to make the new borrowings affordable.

Advice on Remortgaging With a Lower Income

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