HTB Equity Loan application
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samsam89
Posts: 214 Forumite
Hi all.
Looking to purchase property at £280,000 with £55k deposit, £56k equity loan and £169,000 mortgage (4.49 x our income).
Nationwide will lend us up to £190,000 including £266 a month car payment, but the £266 puts us over on the HTB calculator. It also only takes 50% of our annual bonuses and doesn’t accept child benefit as income.
We are happy to pay the car off if needs be but wondered if we can apply for the HTB and list the debt as zero on the proviso that it’s paid off or do we have to pay it off then apply. Our previous mortgage allowed us to apply on the basis that we paid off the loan on or before completion (old car). I ask as I know some lenders insist any debt is paid before they’ll consider your application and they obviously check your credit file to ensure. Does HTB check your credit in th same way etc?
Thanks in advance.
Looking to purchase property at £280,000 with £55k deposit, £56k equity loan and £169,000 mortgage (4.49 x our income).
Nationwide will lend us up to £190,000 including £266 a month car payment, but the £266 puts us over on the HTB calculator. It also only takes 50% of our annual bonuses and doesn’t accept child benefit as income.
We are happy to pay the car off if needs be but wondered if we can apply for the HTB and list the debt as zero on the proviso that it’s paid off or do we have to pay it off then apply. Our previous mortgage allowed us to apply on the basis that we paid off the loan on or before completion (old car). I ask as I know some lenders insist any debt is paid before they’ll consider your application and they obviously check your credit file to ensure. Does HTB check your credit in th same way etc?
Thanks in advance.
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Comments
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Yes, tell them you are repaying before completion.
If you want to keep the car you can also try extending the loan term to 30 years ( remember to match the mortgage term)I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Nationwide won't let you take h2b equity loans for longer than 25 years. That's the max term for the equity loans so they cap the mortgage. Sensible approach but reduces flexibility to an extent. Most other lenders don't need them matchingI am a Mortgage Adviser
You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Just to confirm here.
Half asleep today!
The H2B loan is max 25 years, or the Mortgage term if shorter. I should have simply said in the post, extend the Mortgage term.
Nationwide will do a Mortgage term of 30 years with H2B. (Unless they have changed policy in recent weeks)
Extending the Mortgage term improves the H2B affordability calculation.
The H2B loan is max 25 years, or the Mortgage term if shorter.
If 30 years still does not fit it is worth knowing that we have also done 35 year mortgages with other lenders.I am a Mortgage Broker
You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
Just to confirm here.
Half asleep today!
The H2B loan is max 25 years, or the Mortgage term if shorter. I should have simply said in the post, extend the Mortgage term.
Nationwide will do a Mortgage term of 30 years with H2B. (Unless they have changed policy in recent weeks)
Extending the Mortgage term improves the H2B affordability calculation.
The H2B loan is max 25 years, or the Mortgage term if shorter.
If 30 years still does not fit it is worth knowing that we have also done 35 year mortgages with other lenders.
Many thanks for the reply.
Just to confirm, 4.49 x our income is £169,000 (without car, plus we literally have no other deductions as neither of us have student loans and both receive final salary pension so don't have to make contributions). Our deposit £55k, and HTB loan £56k. All totals £280,000 which is purchase price.
I have input it all into calculator on gov.uk site and seems pretty spot on. Though chatted it through with habito broker earlier who said it didn't quite fit.
Am I missing something here? Our debt to income would be 34% (below 45% max figure) and our mortgage multiple would be 4.49 x annual income (within 4.5 limit).0 -
Any ground rent and/or service charges?I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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kingstreet wrote: »Any ground rent and/or service charges?
None, as it will be freehold and won't incur any form of service charge as all is mains supplied utlities and no communal areas.
It isn't a large development - 10 houses built by local builder.0 -
Haven't submitted application yet as just running calculation to make sure it all looks ok first.0
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Was the broker talking about HTB affordability, or about lender mortgage affordability?
Sometimes, the HTB affordability calculator is okay, but a lender won't lend as much due to things like maintenance payments, childcare, school fees, which don't feature on the HTB AC.I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
Definitely HTB affordbility as we have come up fine on all the various calculators to borrow way more than £169,000 even with the car. Our max borrowing looks like it'll be £210,000 including car.
We have no childcare costs, maintenance payments or any other costs to factor in.
I know equity loan reduces borrowing as they factor the repayment in but surely not by that much that it takes it down sub £169,000.
Puzzled.0 -
Unless you are putting stuff in the wrong boxes?
You aren't putting child benefit or child tax credits in working tax credit, or bonus/overtime/commission in basic income boxes?I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0
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