Mortgage / loan advice needed

llh189

Have been reading lots of posts over the last couple of months and have reorganised quite a lot of my finances / outgoings but I now need some more specfic advice.

My partner and I are at a crossroads and thinking about going our seperate ways.

I earn £28k per year have an experian credit rating of "excellent" have £700 on 1 CC and £17000 ( car loan and some consolidation ) pay £635 per month with is more than payable if I continue to live with my partner, this has 2 year ish to run and an interest rate of 4.9%.

If we break up I want to finally put down some roots and get a small house / flat, which would equal a mortgage of £120,000. We are currently in rented. I have 8k in savings for fees etc

My question is would I get a mortgage offer based on my salary less my commitment to my loan or should get a new loan over a longer preriod to free up more cash to make it better for a lender to give me a mortgage.

A few months a go when got a joint mortgage offer through L and C based on our joint application for £175,000 but the house fell through after survey and searches ( that's when all the trouble started )

Have done a new spreadsheet of income / verses out goings and know that that level of mortgage is payable based on an average interest rate even with my loan repayment if a budget and I am not concerned about either repayments but don't know if I could secure a mortgage offer on my own with that level of debt. I have never defaulted on any payments hence my excellent credit rating. Feel a bit embrassed phoning L and C and they did the application for us jointly and breaking up is bad enough without having to explain yourself to strangers etc and it is my partners decision not mine.

Also unsure about contacting my current lender to see if they would spread my payments over a longer period but I don't want to affect my credit rating.

Any advice would be much appreciated.

Joe_Bloggs

Buying a house is so stressful as is living in rented accomodation that could be put on the market. Hopes can be built up only to be dashed. It is a pity that the majority of the fees could not added to the mortgage on completion. There is possibly a vendors pack scheme being introduced, in the future, where only on survey is done per property. I could be wrong.

You are paying the equivalent of a £120K 25 year mortgage on your car loan/consolidation debt. This seems a lot but the rate is good and the rate of payment is very rapid. This is probably good financial tactics but it may well be hurting you in the eyes of some mortgage lenders.
J_B.

MortgageMamma

Hi There

Not possible to be specific without having more details from you but you will be stretching to over 4 x your salary without deducting the debts you have so there are only a llimited number of lenders who would do this for starters.

Northern rock would lend you up to 4.8 x your salary on their 2 & 3 year fixed together products, or 5.3 x salary if you fixed for 5 years or more. The way this works is you have 95% mortgage on the property with an additional 30% of the property value tagged on as an unsecured loan. You could then pay your debts with the additional borrowing. The rates for these products are about 5.99% with a £699 application fee plus valuation costs so they are not the most competitive but they do the job.

I'm not recommending this is definately the route you should take, but its worth considering and comparing along with other options.

MortgageMamma

Oh. BTW, remember to take professional advice before doing anything!

llh189

Thanks MortgageMamma,

Would you advise if worse comes to the worse that I go direct to Northern Rock or through a broker such as London and County.

Would the interest rate be applicable for both the mortgage and the unsecured loan and what term could the loan or pay back over, as I said in my post I have 2 year ish to pay on the loan, could this be extended or kept the same, or would it run side by side of the mortgage term.

I take it Northern Rock sort out mortgages over the phone are the people able to give advice / best products for me as opposed to just taking my instructions.

Again, thank you very much for the advice.

Lisa

MortgageMamma

Hi There

As a broker I would never recommend a client goes direct to any lender if I can help it. If you can get someone to look at the whole mortgage market for you without it costing you anything it doesnt make good financial sense to go direct.

There benefits of using a broker, particularly a fee's free one is that you get solid sound financial advice and you are indemnified against a mis sale. That is to say, if in future it emerges you have been sold the wrong product that you would be eligible for compensation. if you go to NR or any lender directly then you do not have this advantage.

Obviously you mention L & C in your post. There are lots of mixed comments flying about on here regarding L & C at the moment, its hard to tell what kind of service you would get from them. Some people say they are excellent and some people say they have had rubbish service/no callbacks etc. I personally feel that due to increased business demands that they are cherry picking.

I dont have anything against recommending you do your business over the phone, but as a first time buyer you need an understanding whole of market mortgage advisor who will take the time to give you a good service and explain every stage of the process clearly to you. most clients prefer to see who they are dealing with.

As for the product particulars regarding nothern rocks together deal, again you need to speak to an advisor who can get you a key facts illustration and go through it with you.

There may be other options for you to take also, so don't do anyhting until a broker has looked at your situation in detail and advised accordingly.

If you let me know where you live I might be able to recommend someone.

herbiesjp

You should have a word with a whole of market adviser and indeed let them guide you through the scenario.

Hopefully you will not feel that they are being too intrusive with the questions they ask, but they really do not need to build a picture of your currnet circumstances in order to be able to advise you on the best mortgage product available to you from the whole market place.

As for face-to-face advice or telephone/internet advice that really does depend on what you are comfortable with and how savvy/comfortable you are with each method. You may even feel comfortable enough to go direct, however take the above warnings by MM, as you do give up a lot of protection that is given to consumers over such transactions

HTH

MortgageMamma

Herbs,

you have exceed your PM quota so I cannot put this on PM to you. Makes good humour anyway


What does hopefukky mean?

Are you hoping for fukky tonight?!!! :rotfl:

HAR HAR

Get it changed!! LMAO :rotfl:

herbiesjp

MortgageMamma wrote:

Herbs,

you have exceed your PM quota so I cannot put this on PM to you. Makes good humour anyway


What does hopefukky mean?

Are you hoping for fukky tonight?!!! :rotfl:

HAR HAR

Get it changed!! LMAO :rotfl:

OMG !

I know my typing is bad when i'm rushing but that takes the biscuit!

Thats what happens when you are on the phone with a client and typing on here at the same time! :rotfl:

lol

Thanks for the warning :beer:

llh189

Dear MM and herbiesjp

I currently live in Biggleswade ( just between Cambridgre and Bedford ). I did all the previous arrangements via the phone with L and C, but if either of you could recommend somebody for me go over it face to face that would be great.

I am of course hoping that it won't come to that and my BF will stop getting cold feet / having a mid life crisis but if it does, I would appreciate any recommendations.

Thanks

Guys

MortgageMamma

Hi There you have a PM with a recommendation