Mortgage broker - ask me anything

jules4485

What’s the interest rate on a 5 year fix? Normally they’re lower 

Personally I wouldn’t fix for ten as normally the rates higher and you will have early repayment charges for much longer which could be expensive should you manage to be able to pay it off earlier 

I understand that the 5 year fixed are a lower rate but i am thinking that longterm I will be onto a better thing. I am hoping the economy will start to recover and am thinking that if it does that I will not get a rate like this. I may be wrong but am hopeful.

Thanks

longtimelurker2020

How might lenders view an application where a current property is owned outright (mortgage free) and the owners are applying for a mortgage for a second property which would become their main residence? 

a) Would the lenders consider rental income from property 1? (particularly as the rent won’t be going towards a BTL mortgage) 

b) I’ve been told a higher than usual deposit would be expected for property 2; is this correct, if so why would that be?

PS: We’re aware of the additional SDLT for second homes in England. 

Many thanks 

K_S

@longtimelurker2020 Please correct me if I'm wrong. As I understand it, you currently live in Property 1 (mortgage free) and are looking to buy Property 2 (using a mortgage) which will then become your main residence. You will then let out Property 1.

a) There are lenders who will consider rental income, apply some standard deductions and arrive at a net disposable income figure to add to affordability for the mortgage for Property 2.

b) If the scenario is as outlined above, no, a "higher than usual" deposit will not be expected by all lenders. It is possible for one to have a BTL property with a 75% LTV mortgage and also a residential mortgage at 90% LTV.

longtimelurker2020

K_S said:

@longtimelurker2020 Please correct me if I'm wrong. As I understand it, you currently live in Property 1 (mortgage free) and are looking to buy Property 2 (using a mortgage) which will then become your main residence. You will then let out Property 1.

a) There are lenders who will consider rental income, apply some standard deductions and arrive at a net disposable income figure to add to affordability for the mortgage for Property 2.

b) If the scenario is as outlined above, no, a "higher than usual" deposit will not be expected by all lenders. It is possible for one to have a BTL property with a 75% LTV mortgage and also a residential mortgage at 90% LTV.

Yes that’s correct, thank you 

annetheman

Hi! I wondered if you knew what CRA Kent Reliance (shows up on my report as One Savings Bank Group Plc) use, or if there is any way to find out?

Thank you so much!

K_S

@annetheman I don't know unfortunately. Hopefully another broker on the thread will!

If I asked this question of the KR broker help-desk I suspect they'd just quote the standard T&Cs of "one or more CRAs".

Cymro22

I am 57 years old currently living in rented accommodation. I have a £120,000 joint mortgage on a property which my partner lives in, property value is approximately £180,000. I have excellent credit score with Experian and Equifax with no current debt or utilisation of my credit cards.

What are the possibilities of getting a mortgage in the next 12 months on a property costing around £160,00 with my new partner, over a maximum of 13 years? We would have around £40,000 to deposit between us. My current salary is £45K, while my partners is around £25K. I am currently paying £450 towards the mortgage with my ex partner.

Expected retirement age will be no sooner than 67, I also have a preserved military pension of around £250 a month when I reach 60.

K_S

@cymro22 The running costs of the property in the background will reduce your affordability, and for that purpose usually 100% of the commitment will normally be taken into consideration.

Based on the limited info in your post, you should have options to borrow 120k on a 160k property over a 12 year term assuming there aren't other issues in the background.

If your retirement age is 67, most lenders will limit your term accordingly. It's usually the lower of stated retirement age or 70. 

I hope all that makes sense.

adamditz

Quick one - is there any harm in getting a DIP with my bank (nationwide, who state that they only do a soft credit search) in order to get things moving and give an idea/allow us to view a property before seeing a mortgage advisor to potentially better the rate? Logic tells me if they are only doing a soft search there should be no harm at all, am I missing anything?

thanks 

K_S

adamditz said:

Quick one - is there any harm in getting a DIP with my bank (nationwide, who state that they only do a soft credit search) in order to get things moving and give an idea/allow us to view a property before seeing a mortgage advisor to potentially better the rate? Logic tells me if they are only doing a soft search there should be no harm at all, am I missing anything?
thanks 

@adamditz The only time it could be an issue is if you go on to apply through Nationwide for your actual application through a broker, and the information that you have input is different from what the broker inputs, potentially triggering a flag on the lender's end. 

You've probably heard this, banking with a certain bank makes little/no difference to your chances of getting a mortgage through them.

In any case, if/when you do go on to use a mortgage broker, please do make sure you let them know about this and any other DIPs that you may have done.

Good luck!