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  • FIRST POST
    • samsam89
    • By samsam89 12th Nov 17, 4:36 PM
    • 132Posts
    • 39Thanks
    samsam89
    HTB Equity Loan application
    • #1
    • 12th Nov 17, 4:36 PM
    HTB Equity Loan application 12th Nov 17 at 4:36 PM
    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.
Page 1
    • amnblog
    • By amnblog 12th Nov 17, 5:32 PM
    • 10,070 Posts
    • 3,925 Thanks
    amnblog
    • #2
    • 12th Nov 17, 5:32 PM
    • #2
    • 12th Nov 17, 5:32 PM
    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.
    • FungalCow
    • By FungalCow 12th Nov 17, 5:51 PM
    • 26 Posts
    • 8 Thanks
    FungalCow
    • #3
    • 12th Nov 17, 5:51 PM
    • #3
    • 12th Nov 17, 5:51 PM
    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 matching
    I 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.
    • amnblog
    • By amnblog 12th Nov 17, 6:12 PM
    • 10,070 Posts
    • 3,925 Thanks
    amnblog
    • #4
    • 12th Nov 17, 6:12 PM
    • #4
    • 12th Nov 17, 6:12 PM
    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.
    • samsam89
    • By samsam89 22nd Nov 17, 2:41 PM
    • 132 Posts
    • 39 Thanks
    samsam89
    • #5
    • 22nd Nov 17, 2:41 PM
    • #5
    • 22nd Nov 17, 2:41 PM
    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.
    Originally posted by amnblog
    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).
    • kingstreet
    • By kingstreet 22nd Nov 17, 2:45 PM
    • 32,366 Posts
    • 17,376 Thanks
    kingstreet
    • #6
    • 22nd Nov 17, 2:45 PM
    • #6
    • 22nd Nov 17, 2:45 PM
    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.
    • samsam89
    • By samsam89 22nd Nov 17, 2:48 PM
    • 132 Posts
    • 39 Thanks
    samsam89
    • #7
    • 22nd Nov 17, 2:48 PM
    • #7
    • 22nd Nov 17, 2:48 PM
    Any ground rent and/or service charges?
    Originally posted by kingstreet
    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.
    • samsam89
    • By samsam89 22nd Nov 17, 2:51 PM
    • 132 Posts
    • 39 Thanks
    samsam89
    • #8
    • 22nd Nov 17, 2:51 PM
    • #8
    • 22nd Nov 17, 2:51 PM
    Haven't submitted application yet as just running calculation to make sure it all looks ok first.
    • kingstreet
    • By kingstreet 22nd Nov 17, 2:52 PM
    • 32,366 Posts
    • 17,376 Thanks
    kingstreet
    • #9
    • 22nd Nov 17, 2:52 PM
    • #9
    • 22nd Nov 17, 2:52 PM
    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.
    • samsam89
    • By samsam89 22nd Nov 17, 3:02 PM
    • 132 Posts
    • 39 Thanks
    samsam89
    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.
    • kingstreet
    • By kingstreet 22nd Nov 17, 3:07 PM
    • 32,366 Posts
    • 17,376 Thanks
    kingstreet
    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.
    • samsam89
    • By samsam89 22nd Nov 17, 3:45 PM
    • 132 Posts
    • 39 Thanks
    samsam89
    Nope. All in the correct boxes.

    We get child benefit but that's in the right box and doesn't count towards income. Plus I've put our annual bonuses in the right box and it takes 50% which still works out fine.

    Perhaps the habito guy was doing something wrong :/
    • samsam89
    • By samsam89 23rd Nov 17, 2:34 PM
    • 132 Posts
    • 39 Thanks
    samsam89
    Can any brokers on here confirm if this looks accurate? The details are all input correctly.

    https://ibb.co/gVErQ6
    • kingstreet
    • By kingstreet 23rd Nov 17, 3:24 PM
    • 32,366 Posts
    • 17,376 Thanks
    kingstreet
    Looks fine to me.

    We email a copy of the calculator to the HTB Agent with the PIF & Res to demonstrate we've already calculated affordability.
    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.
    • samsam89
    • By samsam89 24th Nov 17, 12:25 PM
    • 132 Posts
    • 39 Thanks
    samsam89
    Thanks for taking the time to look

    Habito guy has come back and reckons it's "likely" we would need to clear car before applying. I know some lenders apply this rule but as per my original question, I was under the assumption that they will allow an application with the car finance listed as long as we agree to pay it off on or before completion (as amnblog confirmed further up).

    Anyone had any experience dealing with this sort of situation and is this right? Not sure we'll be able to clear it before we apply for the HTB.
    • YHM
    • By YHM 24th Nov 17, 12:30 PM
    • 300 Posts
    • 97 Thanks
    YHM
    Depends on the lender.

    Some will provide an offer document with conditions on (ie repay the loan before completion), some will want to see it gone before application.
    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
    • samsam89
    • By samsam89 29th Nov 17, 11:21 AM
    • 132 Posts
    • 39 Thanks
    samsam89
    Depends on the lender.

    Some will provide an offer document with conditions on (ie repay the loan before completion), some will want to see it gone before application.
    Originally posted by YHM
    Yes, this is what I imagined would happen. Are we able to inform the HTB agent that we intend to repay the car before completion?

    The habito guy has suggested we are high risk as using HTB. In my eyes we just need a lender who will allow applications on the basis of clearing the car on or before completion.

    So to double check, I can apply for HTB EL and inform the HTB Agent of our intention to repay car upon completion?

    Also just out of pure interest, does the agent run a credit check as well as the mortgage provider?
    • kingstreet
    • By kingstreet 29th Nov 17, 11:26 AM
    • 32,366 Posts
    • 17,376 Thanks
    kingstreet
    Yes, this is what I imagined would happen. Are we able to inform the HTB agent that we intend to repay the car before completion?

    The habito guy has suggested we are high risk as using HTB. In my eyes we just need a lender who will allow applications on the basis of clearing the car on or before completion.

    So to double check, I can apply for HTB EL and inform the HTB Agent of our intention to repay car upon completion?

    Also just out of pure interest, does the agent run a credit check as well as the mortgage provider?
    Originally posted by samsam89
    If it will be repaid on or before completion, leave it off the HTB AC and PIF.

    No. No credit checks.
    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.
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