The last time I checked in I was in the process of ripping my hair out because my mortgage broker and mortgage lender had decided to act like a pair of fools. My broker cut down on communication and left me hanging like a little bitch, while my lender Northern Rock Refused My Mortgage Application.
It’s a great feeling when your fate is in the hands of other people, isn’t it?
After a lot of arse scratching and twiddling of thumbs, my mortgage broker, Lee, eventually got back to me with some news. To my relief, he had found out why Northern Rock wouldn’t offer me the mortgage. Apparently it wasn’t such a big deal after all. It’s not that Northern Rock wouldn’t give me the loan; it was just a case of them needing more documentation from me. There’s quite a contrast between them requiring more documentation and straight out refusing my application, right? Naturally, I’m wondering where the breakdown in communication actually occurred. Was my broker originally misinformed by the stupid lender, or was my broker just an idiot? I guess I’ll never know.
When I initially applied for the mortgage, Northern Rock required just ONE payslip, which showed how much I earned in a month. Now, they have decided they require THREE months history of my payslips. Yeah, so for that very reason, I had to wait around for weeks. Now the truth has come to light, the wait almost seemed worth it. No, really!
After receiving the news I quickly gave my broker the additional payslips, which he photocopied and sharply sent off to Northern Rock. It felt kind of good to actually do something for a change, as menial and brain numblingly boring the task may be. I was just happy I was doing something to progress the purchase.
Low and behold, eventually the mortgage offer came through the post.
Switching from Repayment to Interest-only
After close inspection of the policy, I wasn’t too pleased with the offer on the table. Point the blame towards my personal indecisive nature. Basically, I got an offer for a 5.59% interest rate policy, with a repayment payment plan, which is what I initially wanted. However, after crunching through the numbers again, It worked out that I would need to pay approximately £880 per month to cover my mortgage payments. I was only expecting to get £775 from rent, which meant I would be paying £105 out of my own pocket. The terms were all explained to me by my broker, but for some reason I didn’t think of it as a big deal before. But seeing the agreement on paper made me think a little deeper, then I asked myself the question, “do I really want to pay that much out of my own pocket?” The answer was obvious…”FUCK NO”.
I made a conscious decision to change my mortgage offer to an Interest only policy. This would cause a drastic decrease of my monthly mortgage payments as I was no longer going to be paying off the capital of my loan; I would just be paying the interest. I really didn’t want an interest-only mortgage; the plan was to reduce my loan. But the good thing about the policy is that I can make overpayments without being penalised, which will enable me to reduce the debt in my own time.
I called my broker and told him the situation, and he said changing to Interest only would be fine. Basically, when you get an offer through, that’s all it is, “an offer”- you’re not committed to the policy at all. Moreover, changing your agreement to internet only is easily done- you’ll also still be entitled to your initial agreement, and the interest rates you were given initially will remain the same.
So, that’s all sorted. Mortgage, TICK.