Remortgaging Dilemma

[Fowlersrs]

Right, in June we are due to be out of our 2 year fixed rate...

We are currently on a 4.85% fixed rate, at the time we took this as we only had 5% deposit and it was more crucial we got on the ladder.

Now 2 years later we've been offered much better deals, our current lender will allow us to fix for another 2 years at 2.4% but I'm conscious I may be able to get a better deal elsewhere.... or can I?

HSBC are advertising 1.44% 2 year fixed rate for our relevant LTV. However and here's the crunch.. I'm not sure how they'll view our financial situation.

Originally we where both employed, with 60k combined income.

Now 2 years later our combined income is more like 80k but I'm self employed and have only been for 7/8 months, it'll be a year in June when I've been self employed for a year but would a new lender take my income into consideration because I only have 12 months books??

I've been reading you need 2/3 years books, so what do they do just ignore my income as it has no credibility? If that is the case we would just renew are 2.4% but I'm keen to get as best a deal as possible!

Anyone here been through something similar?

[defblade]

I've been through similar.

The mortgage company insisted that I had my accounts to that point checked and signed off by an independent accountant to say that they were (most likely) real and I would (most likely) make the money I was claiming to make. Basically a load of hassle and a couple of hundred quid to shift the liability off the mortgage company and onto the accountant's insurance... but it was all fine after that.
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[dydey90]

The only way you'll find out is by calling and asking.
When I was shopping last year it was First Direct and Barclays who worked out cheapest, looking with 90% LTV as a first time buyer.

At the difference in those interest rates it looks like you'll be laughing though, without knowing how big your mortgage is I can't put a figure on it but for me that would be a difference of around £200 per month off the top of my head.
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[stinkwheel]

Try asking an independant financial advisor.
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[Diggs]

Just been through the same thing. I am self-employed as well, and our combined declared income isn't enough to get a mortgage with another company according to the financial advisor so we have had to extend it with the same lender (Barclays) at a slightly higher interest rate than we are paying now. The advantage of doing this is that we haven't had to send off the last 3 years accounts and tax details and that we have the rate fixed for the next 5 years (2.8%), which will be the crucial 'brexplosion' period.

OP whatever you chose, get a fixed rate whilst the nation's finances teeter and the interest rate rises!!!
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[iooi]

[Pigeon]

Yep, not sure I'd want a 2yr fixed now......well, I didn't, so went 10yr fixed as of last month.
This may look like a terrible decision in 3 years time when interest rates are -2% trying to support the imploding economy.

[Polarbear]

My way of looking at it is that the last thing I would want is my present mortgage provider getting any sort of inkling that my situation had changed drastically when I was only 2 years into my mortgage.

I don't know how much different banks talk to each other or what data bases are available to them but me, personally, I would go with my present provider at the best rate they offer and by next time you will have enough accounts to prove your income.

Be aware though I am no financial advisor, just someone who plays the percentages
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[J4mes]

[Fowlersrs]

Well spoke with HSBC and they do indeed require 2 years books as would most lenders who carry out a full affordability check it seems.

Our current lender will allow us to take up a new deal at 2.39% for 2 years fixed which saves us £300 a month with no extra checks. We will simply overpay every month then providing we don't need the money for something else which saves you a staggering amount of money and time on your mortgage.

I'm not sure I agree with fixing for 10 years. Your right it could go well if things start going up but I honestly don't think the bank of England will increase things too much as the country is still far too delicate. Horses for courses, if you've only got 10 years left then probs a no brainer...

[dodsi]

[Matt B]

[natefz6]

Obliviously everyone is in a different situation but I have found my last couple of mortgage renewals a bit like my bike insurance. I am lazy.

I can spend loads of time jumping through the hoops to ensure 100% that I am selecting the cheapest deal, and then spend more time and stress to see if it gets approved or what other bullshit they want me to pull out my arse to approve me. Or I do as I did on the last one and just take the best deal with the current provider which worked out about £5 more a month more expensive. This time they did post me a form that I had to sign in one place but that was it. 1.99% for 5 years happy days.

Both times I have moved house and had to do the full new mortgage application it was a proper ball ache, admittedly the last one was just as they brought in the affordability checks so it seemed like no fucker knew what they were doing. It took about 2 months to get the approval back. I really cant be arsed with the stress of it.
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[Pigeon]

No one knows what will happen, or at least if they do are not saying

Interest rates in 1970 were around 6% and peaked at 17% in 1979.

https://www.tradingeconomics.com/united-kingdom/interest-rate


Rates could return to an average around 4-5%, but what would cause this?

Wage inflation. Not likely for various reasons.
Price inflation. Potentially not as significant as people might think. Energy costs may well fall due to renewables, a glut of oil that could take 5 years to shift, with peak oil required possibly highlighted in 10 years and a predicted fall in demand.
Commodities are still priced in dollars and the FED is raising rates, again causing commodity prices to cool.
Brexit and a run on sterling. Possibly.

Central banks seem to have colluded heavily to support asset prices at all costs. If rates went to even 2% in the UK, what impact would that have on peoples abilities to pay? As rates fell, prices rose and not in line with wages. So there is significant leverage in the system.
The whole thing is super sensitive to even small increases in interest rates. Banks themselves can only tolerate a 10% fall in asset prices before being bankrupt.

America is 12 trillion in debt. China is a bunch of lies waiting to out. The ECB is printing money like crazy (currently owning 10% of all European corporate bonds too).

It's 99% lies, smoke & mirrors and BS. Everyone is fecked, but who blinks first and when.


Could Brexit cause a run on sterling so significant as to cause rates to rocket. Possibly.
But in my tiny mind, it's just as possible that rates could turn negative. UK and European countries signed this into law in the last 5 years.

What does this mean. I have no idea what I'm talking about. And neither do most people. Everyone just tries to do their best and it's luck and timing as to whether you are on the right side of history of course.

EDIT:
I should say, when looking to re-mortgage, I also look at the USA 30 year mortgage rate to give maybe a clue as to the direction.
3.5% a year ago, 4% now.

[Pigeon]