I would like to switch in 2017. Advice needed please.

Showmethemoney

Registered User
Messages
24
Hi everyone,

I would appreciate any advice from AAM members about switching my mortgage. I would like to get the best deal possible and I don’t mind the hassle or hard word involved in switching.


My details

Mortgage for 250,000 with EBS taken out in 2012, currently fixed @3.5% until the summer, and then it reverts back to 3.7%

LTI Ratio = very poor

My salary = 35,000(most years receive a bonus of another 5000 but not guaranteed)

Spouse salary = is normally 30000 but is currently out sick from work since March 2016 and is on Illness Benefit.

Children = First child due in spring.

Saving = None

LTV = not sure. Similar houses in the area houses have sold for 300,000 and our site is larger than normal(4.5 acres site)


Dilemmas

No money available, I could stretch to a valuer's fee but could not find 1500 for solicitors fees. I’m assuming any cash back offers that might be available for switchers would only be paid at the end of the mortgage application process?


Questions

  1. Should I just fix again with EBS for another year due to our poor LTI ratio and hope by the summer of 2018 my spouse may be back at work and our financial situation will have improved a little. And then I can look to switch. This is the option that seems most sensible to me at the moment.

  2. Should I get the site valued to see what my LTV is and then apply to the various banks to see what deal I can get.

Thank you for reading and hopefully someone might have some advice for me.
 
how likely are you to get a mortgage at the levels you require from anyone else given your current circumstances?

if you only have your income i cant see how anyone will approve you for a mortgage at the level you currently have.

probably best wait until your spouse is back working in my opinion, but open to be corrected
 
@Showmethemoney It is relatively easy to walk into a bank (or make an appointment) and ask them whether they would consider you for mortgage. Chances are they would not, but you can do this without getting a valuation done. I am guessing you would roughly know the valuation at this stage so you could 'guestimate' the rate charged if you were approved.

If I am being honest though, at 40k salary and mortgage of 250k, the LTI is 6.25 times. The general CB rule is 3.5, and although it may not apply to you fully, it is a good indication of affordability for a bank. Add the pending childcare costs into this, and it really is unlikely that you would be considered for a mortgage by another bank at the moment.

If I was you, I would fix with EBS for 1 or 2 years, and then make the decision once your finances improve somewhat. If you partner is likely to be out of work for some of 2017, or you are jointly impacted by maternity leave salary reductions, its likely your P60's from 2017 will not show a great picture. It may be 2018/19 before you are in a position to consider switching again. This is why I suggest maybe considering fixing for 2 years - although others will disagree with me here.

But try do it as quickly as you can once the fixed period ends, and focus on the new family unit once the baby arrives later in the spring.
 
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