Posted on 24 March 2016 by Helen
You arranged our mortgage a couple of years ago. We are now looking at switching to interest only joint application basis. Are lenders doing this based on above certain levels of incomes? If so what are you costs ? We both have excellent Experian credit scores.
It may be possible to amend your repayment method with your existing Lender, subject to their current interest policy and they should be your first port of call. If they agree, you can expect to pay them a fee to cover their administration costs.
In the event that your existing lender does not agree to your request, it may be possible to remortgage to another lender on an interest only basis. Most lenders now restrict Interest only lending to a maximum of 75% Loan to Value and stipulate a minimum earned income and equity of at least £150,000k in the property. It is most certainly possible to obtain an interest only mortgage, as you have joint income excess of £130,000 and property LTV of less than 50% (subject to valuation) which puts you in a very good position to proceed with this type of transaction.
You will need to have a repayment plan in place for the eventual redemption of the mortgage, but there are still a few lenders who will allow you to use several strategies to repay your mortgage.
o enable me to provide you with a specific answer we would need your full financial details, for example full details of your income and financial commitments. On receipt of these details we can discuss the best options available for you. If you decide to go via the remortgage route, John Charcol charges are based on two considerations: the loan amount and the complexity of your individual circumstances. We will provide you with a free initial consultation and we will always explain exactly what you will be charged before you choose to proceed with an application.
As we offer a bespoke service our charges can vary. Our minimum fee is £495, (of which a non- refundable £150 is payable when you make a formal mortgage application). The remainder is payable upon completion. Additional costs that you may incur could include a valuation fee and or legal fees depending upon the choice of lender, although some lenders may offer a free valuation and or a free remortgage legal service as part of their offering.
I recommend that you contact with one of our advisers who would be able to recommend the most suitable lender based upon your individual circumstances.
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Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
We recommend you seek professional advice with regard to any of these topics where appropriate.