Mortgage broker - ask me anything

K_S

Cris872 said:

K_S said:

Cris872 said:

I'm planning to apply for a mortgage in around 1-2 years time. I'll also like to make a product purchase using paypal credit, which will give me the possibility of repaying the loan in either 12 or 24 fixed monthly payments with 0% APR. My question is if this kind of credit will affect my mortgage application in any way, as i know that sometimes BNPL schemes are being flagged in people's mortgage applications. Thank you

@chris872 I can't recall ever having come across Paypal credit on my clients' bank statements or credit reports so can't comment on that specifically. Hopefully someone else who has will comment.

I couldn't find much info on it myself, probably because PayPal credit is still not widely used in the UK. 
I'll try to ask different: Does having an ongoing monthly installment for a purchase on your credit history can affect your mortgage application? Something like ao finance or Currys finance, as I find their terms to be a bit similar to the one I'm planning to use.

@chris872 As a commited monthly outgoing, it may reduce your max borrowing.

[Deleted User]

Hi.  Is anyone able to help with my post from earlier today?

K_S

[Deleted User] said:

Hi.  We are currently looking at purchasing a re-possessed house. We plan to live in it whilst getting plans drawn up and contractors onboard and then spend on extending/renovating it.

We sold our property last year, and have available a mortgage to port of (depending on what value of house is around 52-58% LTV if we do it by end March. We currently have cash making up the remainder to 100% and I am in process of hopefully selling another property which will give us some further cash but this might not be done in time and also, we are not looking at using all that cash for the property but putting most of it in investments/pensions and possibly using around a third of it if needed for renovations etc just as a contingency).  I am discounting the under offer property from these calcs for the moment.

DH has come up with an idea to a) get things through quickly (our current rental expires end March) and b) claw back our early repayment fee from last sale (3272) and I wanted to know if this sounded feasible.  He wonders whether (should we have an offer accepted), we port our old mortgage and then use cash to pay the remaining balance/SD/legals etc.  We are not in UK so no additional SD for second home and we can do it in time where we are.

We would then, once our old mortgage expires, apply for a new mortgage, and seek to borrow 72-75% of the value , thereby freeing up the rest in cash for renovations.  We understand from enquiries with the bank we could borrow at that level.

This would also give us lower monthly repayments (circa 500 per month) for a few months which would help us whilst I am on unpaid maternity leave.

My questions are as follows:

1. Originally, our old fixed mortgage was due to expire August 2021.  Would this still be the case or, because we have only ported it six months later, would this be extended to Feb 2022?

2. If we were to go down this route, do you think the bank would be happy to allow a re-mortgage (obviously subject to valuation etc) for us to be able to extend/renovate on usual terms or would it have to be a specific home improvements mortgage?  There would still be circa 25% equity in the property at that stage as a comfort for the bank.

Personally, I think it would be better for us just to go for a whole new mortgage now, even though that means discounting the early repayment fee.  I think it's less hassle, more certain and the rates are actually better now anyway (we could get 0.4-0.45% less than we were paying on the old mortgage on a 5 year fix - which again, would give us certainty until we have finished renovations and both children would be in school by then so there would be no nursery fees by that point - they are not going to private school).

Thank you in advance!

@rebeccapearson It says in the post that "we are not in UK". Are you not UK resident? Ignoring that part -

1. Generally speaking, I'd expect it to expire as per the original fixed period, Aug 21.

2. You could consider taking out a remortgage with capital raise for the purpose of home improvement. If you're only taking the borrowing up to 75% LTV, you should have plenty of options.

[Deleted User]

Thank you - that's really helpful!

f1ngerscrossed274

FTB buyer here and very stressed! Our credit rating is okay - no CCJs, defaults, late payments (except for one phone bill almost a year ago), but where I think we fall down is we have high credit utilisation %.

I took out a balance transfer card last year at 0% to combine and pay off two credit cards and an overdraft. The 0% applies to the CC transfers for a year but only for a couple of months got the overdraft. I do not and will not be using this card as an actual credit card, and have been making above minimum payment since it opened. I closed my other credit cards once they transferred, and reduced my overdraft. I thought at the time this would make me look more responsible and that I had no intention of using them, but I now wonder if I have shot myself in the foot. On my balance transfer card, I only applied for a credit limit that would accommodate what needed to go on it - as I never intended to use the card for spending - but this means my utilisation % is very high.

I am applying with my partner who has some debts to pay off himself, but these are not large and his utilisation % is lower than mine.

We have a 15% deposit and we are working with a broker. I think I just want reassurance about how big of a problem my utilisation % is, and whether the context of a balance transfer card makes any difference here. 

K_S

f1ngerscrossed274 From what I can understand from the limited info in your post, I don't see any showstopper issues with regard to debt utilisation %. I'm sure your broker will consider other aspects. On its own it shouldn't stop you from getting mainstream rates.

BjB

Hey,

Are 5% shared ownership mortgages available right now through brokers? As every home advert I see still seems to state this.

Also, I have a vehicle lease of £185pm which ends later this year. Declaring this on mortgage affordability calculators drastically reduces the amount they will lend me. The thing is, the lease doesn’t show on any of my credit reports, and I won’t be leasing again when it’s over. Can this be overlooked if I apply before the lease is over? Do I need to declare it?

Thanks!

K_S

BjB said:

Hey,
Are 5% shared ownership mortgages available right now through brokers? As every home advert I see still seems to state this.
Also, I have a vehicle lease of £185pm which ends later this year. Declaring this on mortgage affordability calculators drastically reduces the amount they will lend me. The thing is, the lease doesn’t show on any of my credit reports, and I won’t be leasing again when it’s over. Can this be overlooked if I apply before the lease is over? Do I need to declare it?
Thanks!

@bjb As far as I'm aware, I don't have access to any 95% LTV SO mortgages.

Whether it shows on your credit report or not, as a monthly commited outgoing, it should be included for affordability calculations and will in any case show on the bank statements that you submit to the broker/lender.

Geography_rox

Hi,

this thread looks great, as someone looking into buying a house I have a couple of questions.

as a boarding school teacher who has to live onsite I am hoping to get automatic consent to let. I know colleagues have this from Natwest and Barclays, but is it worth going to a broker who might me able to find other cheaper mortgages which also offer this?

secondly, having just filled in the form for a mortgage in principle, I notice there wasnt really anywhere asking for pension contributions. As a teacher mine are pretty high, about £700 a month (pre tax). Will that impact affordability? If I prove I currently save more than the cost of the mortgage every month will that mitigate against affordability criteria which I’m worried I may not meet?

thanks a lot!

Geography_rox

Sorry for double post I forgot to add, I have about 3k of student loan left to pay off, which is about 9 months from salary. Will they take the fact these payments will stop soon into account or is it worth me paying the lot off before applying for a mortgage (though then reducing my deposit)?