need some help advice on fixed rate mortgage

stolt

I've posted a few thread son here lately and its been suggested that I go to a mortgage broker for some help, i've been to three now and the lowest fixed rate they can get me is 5.34 (think it was nationwide) however there aren't many compnaies out there that will lend me 5.25 times my salary.


I can borrow 25k from a family member and then the rest from a bank, am i better doing that, i would ideally like a rate like derbyshire was doing for 5.10 5 yr fixed, i want lower monthly payments, my wife is at home looking after the children but once the youngest goes to school, she hopes to go back to work so we can start overpaying the mortgage.

is 5.10% too much to ask, most lenders seem to be around the 5.4% mark.

MortgageMamma

If you are looking at 5.25 x salary derbyshire won't do it. As you are asking to borrow more than the 4.5 x single income norm, the rate will be slightly higher, but you do have options on lowering the payments.

1, if its a capital repayment mortgage, extend the mortgage term
2. Switch part of it to interest only to reduce monthly costs, then when wife returns to work switch it back to repayment
3. Switch all mortgage to interest only until wife returns to work
4. if mortgage is currently interest only you are solely reliant upon the rate you get to reduce your costs.

Much of whether you will be able to borrow 5.25% your salary depends on the following:

How much you earn
Which lender you go to
What your monthly credit liabilities are
How many children you have got (used with affordability based lenders)
Your loan to value (amount borrowed as opposed to property valuation)
your credit history

You see, in taking all these factors into account and finding a lender that matches it is not easy for an untrained individual to always get the best deal - you have obviously done the right thing approaching brokers, but approaching lots of different brokers can sometimes be counterproductive

How many credit searches have you had carried out on you in the past weeks? Too many credit searches can damage your credit score and make it less likely you will be accepted by a lender

Pick the broker with the best market access, who doesnt charge a fee and who you feel most confident in - ask them if they can source you a mortgage from ANY lender on the UK market, if they don't say yes they can then look for someone who does or you may not have covered all your options.

Another tip is to get information from non broker paying companies such as HSBC, EGG, ING, Brittannia and Yorkshire Bank - to name a few - ask your broker if these are included in the research.

Hope this helps you out a bit. if you post some more information I will try and help some more

MortgageMamma

stolt

MortgageMamma wrote: »

If you are looking at 5.25 x salary derbyshire won't do it. As you are asking to borrow more than the 4.5 x single income norm, the rate will be slightly higher, but you do have options on lowering the payments.

1, if its a capital repayment mortgage, extend the mortgage term
2. Switch part of it to interest only to reduce monthly costs, then when wife returns to work switch it back to repayment
3. Switch all mortgage to interest only until wife returns to work
4. if mortgage is currently interest only you are solely reliant upon the rate you get to reduce your costs.

Much of whether you will be able to borrow 5.25% your salary depends on the following:

How much you earn
Which lender you go to
What your monthly credit liabilities are
How many children you have got (used with affordability based lenders)
Your loan to value (amount borrowed as opposed to property valuation)
your credit history

You see, in taking all these factors into account and finding a lender that matches it is not easy for an untrained individual to always get the best deal - you have obviously done the right thing approaching brokers, but approaching lots of different brokers can sometimes be counterproductive

How many credit searches have you had carried out on you in the past weeks? Too many credit searches can damage your credit score and make it less likely you will be accepted by a lender

Pick the broker with the best market access, who doesnt charge a fee and who you feel most confident in - ask them if they can source you a mortgage from ANY lender on the UK market, if they don't say yes they can then look for someone who does or you may not have covered all your options.

Another tip is to get information from non broker paying companies such as HSBC, EGG, ING, Brittannia and Yorkshire Bank - to name a few - ask your broker if these are included in the research.

Hope this helps you out a bit. if you post some more information I will try and help some more

MortgageMamma

Hi mortgagemamma, many thansk for the detailed reply, your right in that going to to many people is counterproduction, i think i have some many rates, arrangement fess floating around in my head that it's got to the point where I'm likely to go with whoever the first one to lend me the full amount.

I don't mind taking a interest only mortgage (I thought I had to had a endowment running alongside it, or is that not the case)

I currently earn 35768K I do get bonus each year of appx 3k but its not gauranteed but I have had this same bonus for 3 years now. I get an extra 1800 for travel aswell.

we currently owe 66400k on our mortgage, were selling our house for 295k, and the hosue were buying is 414k. So I need to borrow 185400k.

I have three young children (is it any good telling a white lie on this and saying I have none, will it make a big difference to the outcome)

I've only had one credit search done by one broker so far and they would lend me just under what i wanted.

I do have the option of taking a 25k loan from my parents (will pay them 1% under the base rate as interest) do you think this would be better idea because i'm more likely to get a better lender to offer me a cheaper rate if i need to borrow less (160400k), because it seems i'm limited to a few when i need the 185400k.


oh yeah credit history very good, i dont ahve any other loans, or even credit cards etc.

Would appreciate your advice on this as I say i just seem to be going round in circles now .

thankyou

stolt

I had a quick look on the britannia website and they ahve a decent fixed 5yr at 5.24 % however I'm not sure whether to complete the online details because it mentions a credit search will be carried out, how many credit searches do they allow before people/companies start to think your untrustworthy. will they look at it and think the guy is after a mortgage therefore I expect him to have had a few searches over the last few weeks.

Rick62

If you borrow £185k that would be about 4.75 x salary (including travel and 50% bonus) which will severely limit your choice. If you borrow £25k from your parents that will take you to just over 4 x and you will be a lot more attractive to lenders.

A broker could do this for you. Otherwise dont apply (and get credit searches) but call the lender and ask them if they would be prepared to lend you the required amount subject to credit score etc.

The banks will always assume the worst, so if you have several recent rearches will startt to think the lenders have been rejecting your application. After all, you don't need to apply to decide which mortgage you want.

Mr_helpful

You dont seem to have any calculation for the cost of moving and stamp duty. but nether the less the loan from parents would be good as its a cheap loan. Also as your Loant to value is below 50% I would have thought a good broker could push it through a few lenders

herbiesjp

Unless you are sure about a lenders criteria, the do not do the on-line application/checks, as you could be applying for a deal that you would not get anyway.

GIve Britannia a call first and ask them if they coul ppotentially agree the amount you are looking for based on the figures, if they say yes, then you may want to proceed, but otherwise you may end up with a wasted credit search as it were.

Alternatively as has been stated, a good adviser will be able to approach lenders who are more flexible, and look to get the mortgage agreed for you at the outset.

HTH

stolt

many thansk for all the replies, I phoned britannia, ING, derbyshire and they wont lend me that much. I did speak to Woolwich and they have contacted some uderwriters and they have given me an agreement in principle but the guy will call me back on friday with some details on rates and things.

I do have some savings that I was using for stamp duty, moving costs, legal fees etc.

CyberMonkeyBoy

If you are thinking about using Woolwich this may help.

Woolwich are now owned by Barclays and a little know thing about Barclays customers when applying for a mortgage with Woolwich/Barclays are they can have a thing called a PAML. This is a Pre Approved Lending Limit based on the handling, the amount of money going through a Barclays bank account and other specific factors. This can actually on many accounts give you a higher amount to borrow than on working on basis lending formula and criteria. You will have had to have a Barclays bank account for a minimum of 6 months and meet other points such as being over 18 but I am sure you will meet them.

It may be worth contacting Barclays and finding out if you are available for a PAML and finding out the PAML limit. It also overrides bad credit, income multiples etc. In Woolwich and Barclays circles PAML is GOD lol. I know this as I used to underwrite mortgages for them before christmas. Of course this is only relevant IF you have a Barclays bank account. If not then never mind but I thought I would let you know just in case and if anyone else reading this is in the same situation and DOES have one then it may help them

toonfish

CyberMonkeyBoy wrote: »

If you are thinking about using Woolwich this may help.

Woolwich are now owned by Barclays and a little know thing about Barclays customers when applying for a mortgage with Woolwich/Barclays are they can have a thing called a PAML. This is a Pre Approved Lending Limit based on the handling, the amount of money going through a Barclays bank account and other specific factors. This can actually on many accounts give you a higher amount to borrow than on working on basis lending formula and criteria. You will have had to have a Barclays bank account for a minimum of 6 months and meet other points such as being over 18 but I am sure you will meet them.

It may be worth contacting Barclays and finding out if you are available for a PAML and finding out the PAML limit. It also overrides bad credit, income multiples etc. In Woolwich and Barclays circles PAML is GOD lol. I know this as I used to underwrite mortgages for them before christmas. Of course this is only relevant IF you have a Barclays bank account. If not then never mind but I thought I would let you know just in case and if anyone else reading this is in the same situation and DOES have one then it may help them

this is excellent advice, some of the PAML limits can be incredibly high compared to "usual" borrowing criteria

Worried

That's interesting about Barclays PAML. I have a Barclays account. Woolwich fixed rate mortgages are 80% LTV. Would this still apply? We are looking at 90% LTV.