Mortgage broker - ask me anything

K_S

@Geography_rox I'm sorry your circumstances aren't entirely clear to me.

Are you saying you are looking to buy a house with a residential mortgage and hoping to get a consent to let from day 1? It isn’t usually possible to get a residential mortgage with an immediate consent to let even if you have employer provided accomodation.

Pension contributions are usually excluded as a commitment from affordability calculations for most lenders. If it is disproportinately high, it may be picked up and queried at the underwriting stage.

No, affordability calculations are done based on your income, actual outgoings and some standard assumptions. I hope that makes sense.

Geography_rox said:

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!

K_S

Geography_rox said:

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)?

@Geography_rox Are you paying more than what is the minimum required? Generally speaking, the monthly amount that you are paying towards the student loan may negatively impact your affordability.

Geography_rox

Thanks for your reply!

yes I am hoping to get a residential mortgage which can be rented out from day 1. I know its certainly possible as a number of my colleagues do it (our contract says we have to live in employer accomodation), and they have said they use natwest or barclays. I just wondered if there are other mortgage providers out there which do the same and so would it be worth going via a broker?

and I currently pay £350 a month on student loans, with just under £3000 left to pay off. I could either take £3000 out of my deposit and pay it off now, or let it run its course. If I do the latter, obviously my initial affordability goes down, but would a lender take into account the fact that I won’t be paying it off anymore in 9 months’ time?

thanks again!

Geography_rox

Just to clarify that £350 is the minimum amount which comes straight out of my paycheck

K_S

Geography_rox said:

Thanks for your reply!

yes I am hoping to get a residential mortgage which can be rented out from day 1. I know its certainly possible as a number of my colleagues do it (our contract says we have to live in employer accomodation), and they have said they use natwest or barclays. I just wondered if there are other mortgage providers out there which do the same and so would it be worth going via a broker?

and I currently pay £350 a month on student loans, with just under £3000 left to pay off. I could either take £3000 out of my deposit and pay it off now, or let it run its course. If I do the latter, obviously my initial affordability goes down, but would a lender take into account the fact that I won’t be paying it off anymore in 9 months’ time?

thanks again!

@geography_rox Ah, every day is a school day!   I didn't realise this was possible with mainstream lenders on non-forces jobs as well.

If Barclays and Natwest do it, it can't be that unusual so it may be worth using a broker to get the best rate in the market at the time.

From the published criteria that I can see for Barclays "Barclays does not accept a situation where an applicant is in tied accommodation, wishes to purchase on a residential basis, Let the property and remain in the tied accommodation." But of course if your colleagues have done this through Barclays, perhaps there is some discretion in this matter.

Lenders may consider the minimum required loan payment as the monthly commitment for affordability purposes but unless the payments will cease by completion, most lenders will keep it in the affordability calcs even though it'll only run for a few months into the mortgage.

big_saver_5

K_S said:

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.

@BjB
haras_n0sirrah is a shared ownership specialist (original op of this thread)
she isn't on the boards anymore but if you want her details I used her for my mortgage so can give them to you

Geography_rox

@K_S thanks youve been incredibly helpful in clearing things up! And I will ask colleagues further, as I know one who bought his first house with consent to let over summer, its just that bit trickier now that we’re not in school in person! Thanks again!

PETRA798

Hi - I'm looking to buy after a marital split, but have 5 defaults on my credit record due to my husband's business failing a few years ago. They were registered in 2017/18. My questions are: 1. Is there any point in paying off the debts currently in a DMP out of the house equity, or would it be too late (after completion) for the mortgage company to care; 2. will anyone lend me money? I would expect higher interest rates and fees. On paper I should have a v big deposit - i.e. 50% at least but of course I will have expenses such as having to buy a car/furniture and plan to part fund my two daughters through Uni and learning to drive etc so I would like to bank some of the equity as future proofing ideally.
Thank you

K_S

Geography_rox said:

@K_S thanks youve been incredibly helpful in clearing things up! And I will ask colleagues further, as I know one who bought his first house with consent to let over summer, its just that bit trickier now that we’re not in school in person! Thanks again!

@Geography_rox No worries, happy to help.

FWIW, out of professional interest I talked to Natwest and they confirmed the same - where the borrower is living in or moving to tied accommodation linked to their job, they are allowed to use a resi mortgage to buy a property that they intend to use as their main residence at some point in the future, and then let it out if they wish to do so. Good luck!

cosh25

Well the last time I posted I was furloughed at the start of the November lockdown. I went back to work on Monday, full time (actually doing overtime this weekend!). I won’t get my first full months pay until Feb as this months will be a small furlough and rest full salary. I have seen a house I like and have my deposit I’m just wondering how lenders are at the moment with payslips as my previous 2 will be just furlough. Will I need anything extra or is it just a no go at the moment? TIA