Shocked by mortgage appointment - is this right?!

silvercup

bradders1983 said:

se2020 said:

I wonder if the best they are offering is 20% deposit. Hence your 15k will only let you borrow 70k?

No, they are offering the 90% "Springboard" to FTBs. Plus they are certainly offering 85% mortgages. I have evidence of that in the mortgage offer from Barclays I got in the post today 😉

I haven't spoken to Barclays, I did an online calculator. The 70K figure was given to us by a mortgage advisor. She said there were only 4 lenders who would consider a 90% mortgage, 2 of which I believe were HSBC and Nationwide. 

bradders1983

An independent mortgage advisor? Hmm.

You could attempt an AIP direct with one of those firms offering 90% mortgages and see what it comes back with?

MalMonroe

I'm worried about that credit card debt. And you've only paid £1k since March? I'd definitely want to get rid of that before taking on more. Stat. That's the harsh lesson I learned from almost becoming bankrupt 7 years ago and being diverted to a DRO instead.

Obtaining a mortgage is only the beginning of financial woes, in my experience. You have to make sure that you can keep up the payments and now with only one salary coming in, will you struggle?

Also, will you be getting any redundancy payment? That could go to clearing the credit card. 

Thrugelmir

silvercup said:

bradders1983 said:

se2020 said:

I wonder if the best they are offering is 20% deposit. Hence your 15k will only let you borrow 70k?

No, they are offering the 90% "Springboard" to FTBs. Plus they are certainly offering 85% mortgages. I have evidence of that in the mortgage offer from Barclays I got in the post today 😉

I haven't spoken to Barclays, I did an online calculator. The 70K figure was given to us by a mortgage advisor. She said there were only 4 lenders who would consider a 90% mortgage, 2 of which I believe were HSBC and Nationwide. 

Over what mortgage term? As this greater influences the monthly payments. Nationwide currently limit 90% LTV to 25 years. 

[Deleted User]

bradders1983 said:

silvercup said:

Deleted_User said:

Barclays 10% is only for springboard mortgages.  This is when a friend or relative puts 10% of the purchase price in to a barclays savings account for 5 years.

They aren't doing normal 10% deals at the moment

You could always give your deposit to mum and have her put it in the savings account if you wanted to find a way to make that work

Thank you, that could be something to look into

Looking at their website it looks like this is in essence an 100% mortgage and the payments will reflect this: the 10% "deposit" is returned to the family member after 5 years with interest. But given they arent prepared to lend you anywhere near the amount you need anyway perhaps its a non starter.

I would seek an independent broker out. To be perfectly blunt, your deposit is now far too small to have a wide choice of rates and lenders. 

The barclays deal is indeed a 100% mortgage but the rates are for 90% mortgages. The rates are actually better than most lenders offering 'pure' 90% deals.  

There are only a handful of lenders lending at 90% at the moment. Nationwide is out of the question given the fact the deposit is fully gifted.  Metro, Bank of Ireland, Post Office and Platform have pretty poor rates.   The barclays options has a good rate but is fiddly and there are a few extra fees to consider.  

Given the numbers you have posted I cant see why the borrowing limit is coming out so low.  I would find a new broker and get a 2nd opinion

silvercup

MalMonroe said:

I'm worried about that credit card debt. And you've only paid £1k since March? I'd definitely want to get rid of that before taking on more. Stat. That's the harsh lesson I learned from almost becoming bankrupt 7 years ago and being diverted to a DRO instead.

Obtaining a mortgage is only the beginning of financial woes, in my experience. You have to make sure that you can keep up the payments and now with only one salary coming in, will you struggle?

Also, will you be getting any redundancy payment? That could go to clearing the credit card. 

We're not concerned about keeping up with payments. The figures we were given back in March suggested our mortgage would be over £200 cheaper a month than our current rent (although I appreciate the interest rates won't be as good now, but mortgage will still be less) also we will have my salary coming in - they just can't take it into account because I'll be newly self employed. 

My redundancy payment is only about 1K but yes it will go towards the credit card.

silvercup

Deleted_User said:

bradders1983 said:

silvercup said:

Deleted_User said:

Barclays 10% is only for springboard mortgages.  This is when a friend or relative puts 10% of the purchase price in to a barclays savings account for 5 years.

They aren't doing normal 10% deals at the moment

You could always give your deposit to mum and have her put it in the savings account if you wanted to find a way to make that work

Thank you, that could be something to look into

Looking at their website it looks like this is in essence an 100% mortgage and the payments will reflect this: the 10% "deposit" is returned to the family member after 5 years with interest. But given they arent prepared to lend you anywhere near the amount you need anyway perhaps its a non starter.

I would seek an independent broker out. To be perfectly blunt, your deposit is now far too small to have a wide choice of rates and lenders. 

The barclays deal is indeed a 100% mortgage but the rates are for 90% mortgages. The rates are actually better than most lenders offering 'pure' 90% deals.  

There are only a handful of lenders lending at 90% at the moment. Nationwide is out of the question given the fact the deposit is fully gifted.  Metro, Bank of Ireland, Post Office and Platform have pretty poor rates.   The barclays options has a good rate but is fiddly and there are a few extra fees to consider.  

Given the numbers you have posted I cant see why the borrowing limit is coming out so low.  I would find a new broker and get a 2nd opinion

Thanks. We are definitely going to find somebody else. Alarm bells are also ringing that she was talking about Nationwide to us today - she knows our deposit is gifted. 

[Deleted User]

silvercup said:

MalMonroe said:

I'm worried about that credit card debt. And you've only paid £1k since March? I'd definitely want to get rid of that before taking on more. Stat. That's the harsh lesson I learned from almost becoming bankrupt 7 years ago and being diverted to a DRO instead.

Obtaining a mortgage is only the beginning of financial woes, in my experience. You have to make sure that you can keep up the payments and now with only one salary coming in, will you struggle?

Also, will you be getting any redundancy payment? That could go to clearing the credit card. 

We're not concerned about keeping up with payments. The figures we were given back in March suggested our mortgage would be over £200 cheaper a month than our current rent (although I appreciate the interest rates won't be as good now, but mortgage will still be less) also we will have my salary coming in - they just can't take it into account because I'll be newly self employed. 

My redundancy payment is only about 1K but yes it will go towards the credit card.

Re-word that bit ........ you should be thinking this all the time.

silvercup

[Deleted User] said:

silvercup said:

MalMonroe said:

I'm worried about that credit card debt. And you've only paid £1k since March? I'd definitely want to get rid of that before taking on more. Stat. That's the harsh lesson I learned from almost becoming bankrupt 7 years ago and being diverted to a DRO instead.

Obtaining a mortgage is only the beginning of financial woes, in my experience. You have to make sure that you can keep up the payments and now with only one salary coming in, will you struggle?

Also, will you be getting any redundancy payment? That could go to clearing the credit card. 

We're not concerned about keeping up with payments. The figures we were given back in March suggested our mortgage would be over £200 cheaper a month than our current rent (although I appreciate the interest rates won't be as good now, but mortgage will still be less) also we will have my salary coming in - they just can't take it into account because I'll be newly self employed. 

My redundancy payment is only about 1K but yes it will go towards the credit card.

Re-word that bit ........ you should be thinking this all the time.

Ok, I'll reword it. We're CONFIDENT we can keep up with payments. We've rented for 10 years at a higher rate than a mortgage would be and we've never been late. Anybody who's not confident about being able to make payments really shouldn't be taking on a mortgage. 

Brock_and_Roll

The elephant in the room here for me (as an old school banker) is "newly self employed" - from a lending perspective this should be a big fat zero until at least 18 months of trading under the belt.