Mortgage broker - ask me anything

mowgliisaG

haras_n0sirrah said:

mowgliisaG said:

haras_n0sirrah said:

mowgliisaG said:

haras_n0sirrah said:

mowgliisaG said:

For all the MBs out there..how many self employed cases which are agreed at DIP are you seeing then declined given the current climate??

Honestly - not many but I am anal about checking the last 3 months business bank statements to ensure they reflect the income being declared

And what are you checking on the last 3 months bank statements? Are you comparing to pre Covid turnover or this time last year turnover..

We want to see that the income is healthy and roughly supporting of the declared tax returns. 

How about for directors of an ltd? More turnover than tax returns..

I think they mainly want to see that you are trading again at a healthy level. I had one to look at today - took £30 last month and clients are on uc. Tax assessments show turnover of £120k - this clearly isn't trading again so I had to tell them sorry.

My pre Covid turnover was 318k equating to roughly 26.5k a month, over the last 3 months I have averaged around 23k a month...would that give you confidence to say it’s resumed at healthy levels?

haras_n0sirrah

mowgliisaG said:

haras_n0sirrah said:

mowgliisaG said:

haras_n0sirrah said:

mowgliisaG said:

haras_n0sirrah said:

mowgliisaG said:

For all the MBs out there..how many self employed cases which are agreed at DIP are you seeing then declined given the current climate??

Honestly - not many but I am anal about checking the last 3 months business bank statements to ensure they reflect the income being declared

And what are you checking on the last 3 months bank statements? Are you comparing to pre Covid turnover or this time last year turnover..

We want to see that the income is healthy and roughly supporting of the declared tax returns. 

How about for directors of an ltd? More turnover than tax returns..

I think they mainly want to see that you are trading again at a healthy level. I had one to look at today - took £30 last month and clients are on uc. Tax assessments show turnover of £120k - this clearly isn't trading again so I had to tell them sorry.

My pre Covid turnover was 318k equating to roughly 26.5k a month, over the last 3 months I have averaged around 23k a month...would that give you confidence to say it’s resumed at healthy levels?

Yes I would expect that to be fine.

haras_n0sirrah

yousnorkmaiden said:

Any experience with reasonably high credit utilisation and Santander? I'm at 75% (£15k), with a 'fair' credit score - I had a few late payments (1s) 38 months ago. My husband's is good - low credit utilisation. 
We have DIP from them through a broker who seems quite good - we've good salaries (£150k between us), not affected by Covid in any way. 83.1% LTV - we're borrowing less than half of our affordability. 

If you have an aip you should be fine

GrahamsHill

haras_n0sirrah said:

GrahamsHill said:

I’ve been reviewing my credit report ahead of a mortgage application next year and I’ve got a couple of issues that I’d like to get some advice on.
We had mortgage arrears on our mortgage in January 2017 which we paid off by March 2018 meaning when we come to apply for a mortgage in May or June next year the arrears will be overs 3 years old (4 plus years since the original missed payments). It was down to me suffering from depression following the sudden death of my dad. 
In March 2017, I got a default on a Vanquis credit card for £631 for the same reason. This was paid off in full in September 2019 and is showing as satisfied on my report. What impact will the missed payments / default have on our mortgage application given the length of time 3 – 4 years since missed payments / default? 
Our income is good (combined £80k+) and we have had no missed payments on anything since the mortgage arrears were paid off. 
We're looking at a new build priced at around £260k with a £45k deposit (approx 17%) but have quite high debts in term of loans (around £20k between us). Other than that we have credit cards with £0 balances and our credit utilisation is good. 
Would we have a good chance of obtaining a mortgage in your opinion? 

3 years is the magic number with most high street lenders. As long as things don't change too much criteria wise in the meantime then you should be ok

Awesome, thank you. Gives me a lot more confidence about getting a mortgage. I’ll be going through a broker anyway to make sure we get the best deal available to us. Out of interest, how many months bank statements etc do lenders generally ask for? I want to make sure that we’re squeaky clean in every way so when we come to applying we’re in the best position possible. 

haras_n0sirrah

GrahamsHill said:

haras_n0sirrah said:

GrahamsHill said:

I’ve been reviewing my credit report ahead of a mortgage application next year and I’ve got a couple of issues that I’d like to get some advice on.
We had mortgage arrears on our mortgage in January 2017 which we paid off by March 2018 meaning when we come to apply for a mortgage in May or June next year the arrears will be overs 3 years old (4 plus years since the original missed payments). It was down to me suffering from depression following the sudden death of my dad. 
In March 2017, I got a default on a Vanquis credit card for £631 for the same reason. This was paid off in full in September 2019 and is showing as satisfied on my report. What impact will the missed payments / default have on our mortgage application given the length of time 3 – 4 years since missed payments / default? 
Our income is good (combined £80k+) and we have had no missed payments on anything since the mortgage arrears were paid off. 
We're looking at a new build priced at around £260k with a £45k deposit (approx 17%) but have quite high debts in term of loans (around £20k between us). Other than that we have credit cards with £0 balances and our credit utilisation is good. 
Would we have a good chance of obtaining a mortgage in your opinion? 

3 years is the magic number with most high street lenders. As long as things don't change too much criteria wise in the meantime then you should be ok

Awesome, thank you. Gives me a lot more confidence about getting a mortgage. I’ll be going through a broker anyway to make sure we get the best deal available to us. Out of interest, how many months bank statements etc do lenders generally ask for? I want to make sure that we’re squeaky clean in every way so when we come to applying we’re in the best position possible. 

As a broker we always ask for latest 3 payslips and latest 3 bank statements

GrahamsHill

haras_n0sirrah said:

GrahamsHill said:

haras_n0sirrah said:

GrahamsHill said:

I’ve been reviewing my credit report ahead of a mortgage application next year and I’ve got a couple of issues that I’d like to get some advice on.
We had mortgage arrears on our mortgage in January 2017 which we paid off by March 2018 meaning when we come to apply for a mortgage in May or June next year the arrears will be overs 3 years old (4 plus years since the original missed payments). It was down to me suffering from depression following the sudden death of my dad. 
In March 2017, I got a default on a Vanquis credit card for £631 for the same reason. This was paid off in full in September 2019 and is showing as satisfied on my report. What impact will the missed payments / default have on our mortgage application given the length of time 3 – 4 years since missed payments / default? 
Our income is good (combined £80k+) and we have had no missed payments on anything since the mortgage arrears were paid off. 
We're looking at a new build priced at around £260k with a £45k deposit (approx 17%) but have quite high debts in term of loans (around £20k between us). Other than that we have credit cards with £0 balances and our credit utilisation is good. 
Would we have a good chance of obtaining a mortgage in your opinion? 

3 years is the magic number with most high street lenders. As long as things don't change too much criteria wise in the meantime then you should be ok

Awesome, thank you. Gives me a lot more confidence about getting a mortgage. I’ll be going through a broker anyway to make sure we get the best deal available to us. Out of interest, how many months bank statements etc do lenders generally ask for? I want to make sure that we’re squeaky clean in every way so when we come to applying we’re in the best position possible. 

As a broker we always ask for latest 3 payslips and latest 3 bank statements

Legend! Thanks for taking the time to respond, Haras. Much appreciated 

mowgliisaG

haras_n0sirrah said:

mowgliisaG said:

haras_n0sirrah said:

mowgliisaG said:

haras_n0sirrah said:

mowgliisaG said:

haras_n0sirrah said:

mowgliisaG said:

For all the MBs out there..how many self employed cases which are agreed at DIP are you seeing then declined given the current climate??

Honestly - not many but I am anal about checking the last 3 months business bank statements to ensure they reflect the income being declared

And what are you checking on the last 3 months bank statements? Are you comparing to pre Covid turnover or this time last year turnover..

We want to see that the income is healthy and roughly supporting of the declared tax returns. 

How about for directors of an ltd? More turnover than tax returns..

I think they mainly want to see that you are trading again at a healthy level. I had one to look at today - took £30 last month and clients are on uc. Tax assessments show turnover of £120k - this clearly isn't trading again so I had to tell them sorry.

My pre Covid turnover was 318k equating to roughly 26.5k a month, over the last 3 months I have averaged around 23k a month...would that give you confidence to say it’s resumed at healthy levels?

Yes I would expect that to be fine.

As always thank you so much Sarah, your truly amazing for what you do on these forums and the help you give people. 

cfw1994

Here's one for you!
We are lucky to own our home and a "holiday home", both mortgage free: last mortgage ended a year ago with HSBC.
We are considering extending/reworking the holiday home at some point.   I hesitate to put a timeframe: we may start in the next 2-5 years.   It is only a "maybe", but bear with me..... oh yes, to add complexity, it is grade 2 listed, so would not be a fast job to get planning/builders anyway.
I plan to step down from the reasonably well paid day job next May, into a vague "early semi-retirement, assume no regular income"....

How hard is it for people with only DC pots & savings but a decent credit history to get a home-loan or mortgage?  We may not want to directly cash things in up front.   I suspect we might want to get up to 25% LTV on the second home.  Might only be 15-20% against our primary home, but I doubt that would be allowed?

Would we be wise to look into possibilities of offset mortgages (not even sure who offers those these days)? 
The reality is that I would expect any savings to grow more from our investments than the mortgage would cost, so I don't think it makes sense, but it might make it easier to access funds "as & when needed"?

Welcome any thoughts (clearly I am mad to give up the day job with these vague plans, but hey.....)

haras_n0sirrah

cfw1994 said:

Here's one for you!
We are lucky to own our home and a "holiday home", both mortgage free: last mortgage ended a year ago with HSBC.
We are considering extending/reworking the holiday home at some point.   I hesitate to put a timeframe: we may start in the next 2-5 years.   It is only a "maybe", but bear with me..... oh yes, to add complexity, it is grade 2 listed, so would not be a fast job to get planning/builders anyway.
I plan to step down from the reasonably well paid day job next May, into a vague "early semi-retirement, assume no regular income"....

How hard is it for people with only DC pots & savings but a decent credit history to get a home-loan or mortgage?  We may not want to directly cash things in up front.   I suspect we might want to get up to 25% LTV on the second home.  Might only be 15-20% against our primary home, but I doubt that would be allowed?

Would we be wise to look into possibilities of offset mortgages (not even sure who offers those these days)? 
The reality is that I would expect any savings to grow more from our investments than the mortgage would cost, so I don't think it makes sense, but it might make it easier to access funds "as & when needed"?

Welcome any thoughts (clearly I am mad to give up the day job with these vague plans, but hey.....)

I would do an offset now while in employment. Pay it back in and then you can draw it down when you need it. 

cfw1994

haras_n0sirrah said:

cfw1994 said:

Here's one for you!
We are lucky to own our home and a "holiday home", both mortgage free: last mortgage ended a year ago with HSBC.
We are considering extending/reworking the holiday home at some point.   I hesitate to put a timeframe: we may start in the next 2-5 years.   It is only a "maybe", but bear with me..... oh yes, to add complexity, it is grade 2 listed, so would not be a fast job to get planning/builders anyway.
I plan to step down from the reasonably well paid day job next May, into a vague "early semi-retirement, assume no regular income"....

How hard is it for people with only DC pots & savings but a decent credit history to get a home-loan or mortgage?  We may not want to directly cash things in up front.   I suspect we might want to get up to 25% LTV on the second home.  Might only be 15-20% against our primary home, but I doubt that would be allowed?

Would we be wise to look into possibilities of offset mortgages (not even sure who offers those these days)? 
The reality is that I would expect any savings to grow more from our investments than the mortgage would cost, so I don't think it makes sense, but it might make it easier to access funds "as & when needed"?

Welcome any thoughts (clearly I am mad to give up the day job with these vague plans, but hey.....)

I would do an offset now while in employment. Pay it back in and then you can draw it down when you need it. 

Any recommended banks?   MSE didn't seem to have a category for "offset offers" when I skimmed it!
thanks