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  • FIRST POST
    • Axieros
    • By Axieros 8th Sep 17, 11:13 AM
    • 9Posts
    • 0Thanks
    Axieros
    the *perfect* remortgage lender
    • #1
    • 8th Sep 17, 11:13 AM
    the *perfect* remortgage lender 8th Sep 17 at 11:13 AM
    I'm looking to remortgage soon to do some renovations and to pay off existing credit card debt. My credit history is impeccable; no missed payments or other funny stuff, and no dipping in overdraft. However, I made 2 credit card applications a few months ago, to shift older debt to 0% transfer cards. With existing level of debt I don't think I can borrow extra so I need to add the credit card debt to the new mortgage.

    The new mortgage LTV would still be less than 60%. I don't want to stay with my current lender, as I could get lower rates elsewhere.

    Are there any lenders who satisfy all the following?

    * 5-yr fix rate less than 2%
    * low set-up fees (less than £1000?) and free legals and valuation
    * allows remortgage for debt consolidation
    * takes into account annual bonus (~ 15% of base salary) and child support for affordability. I can show 3+ yrs regular bank history for both.
    * allows regular monthly overpayments. I'm planning on overpaying a couple of hundreds every month, basically overpay by the amount that I'm now paying to my credit cards.
    * follow on variable rate less than 4%. This is not as important as other criteria.

    Happy to go through a broker to do the legwork, but it would help if I had some lender names in mind before I went and talked to them.

    On that, how much should I expect to pay in broker fees? My situation isn't very complicated or tough, is it?

    Thank you.
Page 2
    • amnblog
    • By amnblog 8th Sep 17, 3:50 PM
    • 10,041 Posts
    • 3,906 Thanks
    amnblog
    The thing is, going to a middleman with no knowledge whatsoever about what you might obtain going to the market directly exposes you to a greater risk that the middleman might recommend a product that is in his best interest, rather than yours. This could be any combination of him getting paid more and/or him having to do more work. This risk applies to any service in any sector, not just mortgages. The risk will of course be greater or lower depending on a number of factors, like the regulation in the sector, competition, how transparent the sector is, etc.
    Originally posted by SouthLondonUser
    Regulated sector.

    A Broker has a responsibility to recommend a more suitable product where it is available. A Lender does not.
    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.
    • SouthLondonUser
    • By SouthLondonUser 8th Sep 17, 4:04 PM
    • 336 Posts
    • 49 Thanks
    SouthLondonUser
    Yes, sure, brokers are regulated, but… there is always a certain degree of subjectivity in determining which product is more suitable and why, right? One could always argue that a given mortgage was slightly more expensive but had a greater chance of being approved, or maybe had lower prepayment penalties so greater flexibility, or whatever.

    Don’t get me wrong, I am not suggesting there is an epidemic of brokers lining their pockets recommending unsuitable products. I am simply suggesting that approaching a middleman, any middleman, with a modicum of information about the sector never hurts.
    • SouthLondonUser
    • By SouthLondonUser 8th Sep 17, 4:06 PM
    • 336 Posts
    • 49 Thanks
    SouthLondonUser
    PS But maybe it’s just me being paranoid After all, I do my MOTs in shops that don’t service my specific brand, so I know they have no incentive in finding non-existent faults to fix!
    • kingstreet
    • By kingstreet 8th Sep 17, 4:30 PM
    • 32,271 Posts
    • 17,301 Thanks
    kingstreet
    Yes, sure, brokers are regulated, but… there is always a certain degree of subjectivity in determining which product is more suitable and why, right? One could always argue that a given mortgage was slightly more expensive but had a greater chance of being approved, or maybe had lower prepayment penalties so greater flexibility, or whatever
    Originally posted by SouthLondonUser
    But there is no absolute. We are objective. Our clients impose their subjectivity on us and rightly so.

    How we determine the best deal is by discussion with the potential client. I can tell you what I think is the best deal and give the reasons why I think that. However, if you as the client have different priorities you will probably not agree.

    Let's say the lowest rate for a five year fix is 2%. This product allows you to overpay by upto 10% of the outstanding balance each year. Another is 2.2% but it allows overpayments of 10% of the initial loan each year. Finally, the third deal is 2.3% but it allows 20% of the outstanding balance.

    The absolute is deal one is best because it has the lowest rate. On discussion with the client, deal three suits him better. It's the best deal for him because he wants to be able to overpay more without penalty.

    Then we have lender service and in my sector the need to exchange contracts in 28 days. Then we have fees to consider, criteria and so on.

    Only by communicating with the client can we establish what is the right route and therefore there can never be 'a one size fits all' conclusion.

    As a consequence it's virtually impossible to select a lender for commission reasons and it would be extremely dangerous because as we've already identified there is so much information and competition. Most of us would rather have 100% of something by offering the best overall deal, than nothing by favouring a particular lender which pays more where the client can find an obviously better alternative himself.

    When all is said and done, we have to justify what we have recommended and at any time in the future, the client can complain and we have to shell out £550 for someone to determine if what we did was correct.
    Last edited by kingstreet; 08-09-2017 at 4:33 PM.
    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.
    • getmore4less
    • By getmore4less 8th Sep 17, 5:50 PM
    • 30,307 Posts
    • 18,124 Thanks
    getmore4less
    @getmore4less:

    42K salary, 6.3K annual bonus, 7.2K child support

    I'm trying to get £215K for the new mortgage; property value £400K+ based on recent sales

    monthly outgoings:
    £290 childcare costs (using the new tax free childcare program), one child. This will reduce to £0 by the end of this school year (secondary school age)
    £200 pension contributions; these are optional - I can temporarily stop them if needed
    £124 oyster card
    £102 council tax
    £76 service charge and ground rent

    £10.9K cc debt @ 0%, no other loans or debt. This will drop to less than £10K by the time I actually re-mortgage; I pay £400 at the moment towards the CC debt, more than min payments which are 2.25% of the balance.

    @kingstreet: thanks. Your post reassures me that it's worth going through a broker

    @NinaSwiss: thank you. Just an idea of the fees helps, I genuinely don't know what to expect, I haven't been in the market in a while...
    Originally posted by Axieros
    What's the current mortgage key information?

    You say the debt is old going down slowly why?
    One year of bonus would have nailed most of it.

    Where is all your money going.

    You want to borrow more and consolidate.

    You can probably get this wrapped up to look attractive but there is a lot of money going somewhere not on your limited list.

    ........
    edit: to add some numbers

    base net £2600pm with bonus less the pension as that's at 40% £2,800pm
    add the child support £3,200/£3,400

    £215k @ 2% over 20y £1090pm, 25y £915pm

    your mortgage is currently smaller by at least £10k + your extra borrowing

    if we say £1k now and the £500pm from above costs, another £400pm to feed and pay the bills + the £400pm on the current £10k CC that's still £900-£1,100pm to account for.

    Should be doable but if you really are spending all your money with the smaller mortgage where do you cut back?
    Last edited by getmore4less; 09-09-2017 at 9:14 AM.
    • glosoli
    • By glosoli 8th Sep 17, 6:03 PM
    • 673 Posts
    • 387 Thanks
    glosoli
    Regulated sector.

    A Broker has a responsibility to recommend a more suitable product where it is available. A Lender does not.
    Originally posted by amnblog
    If a bank does not have a product which is suitable for the customers circumstances then the mortgage advisor cannot make a recommendation.
    • copperclock
    • By copperclock 8th Sep 17, 6:05 PM
    • 217 Posts
    • 242 Thanks
    copperclock
    Have you got any scope for holding off on the extension for a year or two while you pay off the debt? Doesn't seem like a great idea to turn 0% unsecured debt into long term debt on your home carrying interest.

    Even if you got half of it paid back it might open your options for the mortgage/extension money in the not-too-distant future.

    Good luck whatever you decide.
    • amnblog
    • By amnblog 8th Sep 17, 8:59 PM
    • 10,041 Posts
    • 3,906 Thanks
    amnblog
    If a bank does not have a product which is suitable for the customers circumstances then the mortgage advisor cannot make a recommendation.
    Originally posted by glosoli
    The Lender can quite legitimately 'sell' a product that costs 50% more than a competitor's product. A Broker has to 'advise' the client of the better rate.

    For example we have clients who had adverse credit when we placed them two years ago. Now the credit has cleared out and the current lender has legitimately offered them 3.79% going forward. We will place them closer to 1.79% now that they qualify for a wider range of 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.
    • jim2334
    • By jim2334 9th Sep 17, 8:51 AM
    • 4 Posts
    • 1 Thanks
    jim2334
    We are just waiting on the offer for a five year fixed (1.83%), £995 fee with Tesco. We went direct to the lender and its been fairly simple.

    Filled out initial application online, got an agreement in principle. Then got a hard copy printed off and witnessed signed, ID verified (post office) - sent in payslips and one months bank statements. The next week the valuation came through and the underwriter gave us a green tick for affordability. Now just need to sign the offer and send to the surveyor (which was provided by Tesco) and it will all be done.

    I don't think a broker is needed unless you're in a difficult position credit wise, or found you already had a a failure, or are just to unsure of the process. We used a broker as first time buyers, and they were very helpful, but for the remortgage we did it ourselves.

    If you have a decent credit score and your finances show you can afford repayments, its a pretty simple process to go through if you know how to use search comparison sites and interpret the different deal variables (fees, APR etc)
    Last edited by jim2334; 09-09-2017 at 8:57 AM.
    • robatwork
    • By robatwork 9th Sep 17, 10:04 AM
    • 3,998 Posts
    • 4,346 Thanks
    robatwork
    If the perfect one existed there wouldn't be others.

    Here's some names:
    HSBC
    Coventry
    Yorkshire BS
    First Direct

    Although the best rates for long fixes have steep fees ie. > £1000

    What you're asking this forum is to do your research - you need to put in the legwork or.... use a broker.

    I'm not a broker.
    • Axieros
    • By Axieros 10th Sep 17, 6:09 PM
    • 9 Posts
    • 0 Thanks
    Axieros
    @getmore4less: the old debt is because of family issues, I don't need to go into details, not relevant here. It was much higher, it's been decreasing steadily for the past 2 years, and I don't have new debt.

    My query was more like - are there lenders who will take on this new mortgage, under the circumstances? Total net monthly income is ~ £3400 (bonus and chd support included). Current mortgage payments are less than a third of that, they're £1020 at 2.4% fix, which ends in 3 months time. 21 years left.

    The new mortgage payments would be lower even with debt increased, because rates are now <2% - if I can access them, that is. My plan was to overpay the new mortgage monthly (by the amount I'm now putting on credit cards anyway, which are £400+ at the moment).

    @robatwork: from your list, I believe none of those lenders are taking into account child maintenance when checking affordability, unless it's backed by a court order or CSA order, which I don't have. All I have is 3+ years of bank statements showing regular payments.

    @copperclock: I could wait but I've already waited and both the kitchen and the bathroom are in a sorry state, and I don't mean cosmetic, the bathroom tile is literally falling.
    • Inae
    • By Inae 11th Sep 17, 10:51 AM
    • 4 Posts
    • 0 Thanks
    Inae
    I'm a single parent in a similar situation. About one sixth of my income comes from child maintenance and I have an informal arrangement with my ex, no court order.

    Childcare costs and school fees severely reduce the amount banks will lend to parents. However, child support and child benefit received by single parents are ignored by many lenders when calculating affordability. Or they make it difficult... some require "sustainability over the term of the mortgage" for child support and child benefit, but then they don't do the same thing for childcare expenses, do they? Most parents stop paying those when children reach 11.

    Then, most banks ask to see a court order or a CSA letter to be able to consider child support. On the other hand, the government encourages parents to reach informal agreements and not go to court or to CSA. It's a catch 22 for many parents, especially for single mothers.

    Having said that, there are some lenders who are more flexible when it comes to these situations. I can't post links but if you Google "Is child support counted as income by mortgage lenders?" you'll come across a summary on savvywoman co uk. I'm posting an excerpt here.

    Don’t accept child support payments:

    – Coventry building society: doesn’t currently consider child support as income for a mortgage.
    – Post Office: Doesn’t take child support into account and has no plans to review its approach.

    Accept a percentage of child support payments

    Two lenders/lending groups will accept a percentage of child support payments as income if backed by a court order or CSA payment plan (some lenders also accept a statutory Child Maintenance Service plan as well).

    – Lloyds Banking Group: Takes 60% of the level of child support into account backed by a court order, CSA payment plan or three months’ bank statements showing payments have been made. SAVVY TIP: This group accounts for a large part of the mortgage market as it includes Lloyds bank, Halifax and Bank of Scotland.
    – Yorkshire building society: will take into account 50% of the value of any child maintenance payments, provided it is evidenced by a court order or consent order, a Child Support Agency or Statutory Child Maintenance Service payment order, or a solicitor’s letter confirming payments. We also require evidence from the most recent bank statement to show the payment had been made.

    Take child support into account with court/CSA order

    Several lenders will take all of the child support value into account when assessing income, but only if it’s being paid by a CSA or court order.

    – Cambridge building society: Takes child support into account if it is backed by a court order or CSA payment order, and would also want to know that payments are being maintained and are sustainable. They may make an exception to the above if there is a good track record of payments.
    – Clydesdale and Yorkshire Banks: Do not generally take child support into account as income when assessing someone’s application. However they will look at borrowers on a ‘case by case’ basis. Even where they will accept child support, it must be backed by a CSA payment order or court order.
    – Co-operative Banking Group: Will take 100% of child maintenance income into consideration, provided this is covered by a court order or CSA/Child Maintenance Service (CMS) documentation. We would also want to know that payments are being maintained and are sustainable.
    – Metro Bank: Takes child support into account if it is backed by a court order, and would also want to know that payments are being maintained and are sustainable.
    – Virgin Money: Takes child support into account if it is backed by a CSA payment or court order, if they have been in place for at least two years before the start date of the mortgage.
    – NatWest/RBS: Takes child support into account on a case-by-case basis. It doesn’t necessarily insist on a CSA or court order, but it would want to know that payments would be sustained. It may ask for evidence that payments have been received over the last six months.

    Take child support into account without CSA/court order

    Several lenders take a more flexible approach, including those listed below.

    – Santander: Takes child support into account and would want to know that it had been paid for at least three months (this would need to be by standing order or phone/online payment so it would show up on a bank statement).
    – Tesco Bank: Takes child support into account and would want to know that it had been paid for at least three months (this would need to be by standing order or phone/online payment so it would show up on a bank statement).
    – Barclays: Takes child support into account as long as it is accompanied by a court order or if payments have been received continuously for 12 months.
    • getmore4less
    • By getmore4less 11th Sep 17, 1:08 PM
    • 30,307 Posts
    • 18,124 Thanks
    getmore4less
    they're £1020 at 2.4% fix, which ends in 3 months time. 21 years left.
    That's around £200k if only looking for £215kthe £10K consolidation that will be around £5k for refurb, it be cheaper to just stick with 0% CC and fund with that and saving a bit more.

    you should have room to get a decent 0% purchase card to spread the costs by using that for regular spending.
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