Mortgage broker - ask me anything

DTMT

K_S said:

@DTMT I wouldn't worry too much about the Clearscore 'credit-score' as such.

- one 5+ year old £50 default is not likely to be a huge issue

- the persistent use of payday loans (and how they were conducted) may have an impact depending on how it comes across in the credit report

- clean credit history for the last 2 years is a definite positive

Generally speaking, you should have options. Beyond that I can't really say a lot about your chances as that will depend on the specifics and a lot of other factors as well such as size of deposit, kind of income, how much you are looking to borrow, etc.

    @K_S Thanks for your reply.
OK that's a relief about the default.
I have claimed back probably half the payday loan interest and i believe they have removed the mis-sold loans from my credit file from what i can understand.
I think i could stump up a 20k deposit and my income is between 40 and 45k with overtime. 
when applying they will take overtime into consideration yes? the past two months I have had solid overtime but before that the company has had a turbulent year for obvious reasons. will i need 3 months proof of solid overtime or more?

K_S

DTMT said:

K_S said:

@DTMT I wouldn't worry too much about the Clearscore 'credit-score' as such.

- one 5+ year old £50 default is not likely to be a huge issue

- the persistent use of payday loans (and how they were conducted) may have an impact depending on how it comes across in the credit report

- clean credit history for the last 2 years is a definite positive

Generally speaking, you should have options. Beyond that I can't really say a lot about your chances as that will depend on the specifics and a lot of other factors as well such as size of deposit, kind of income, how much you are looking to borrow, etc.

    @K_S Thanks for your reply.
OK that's a relief about the default.
I have claimed back probably half the payday loan interest and i believe they have removed the mis-sold loans from my credit file from what i can understand.
I think i could stump up a 20k deposit and my income is between 40 and 45k with overtime. 
when applying they will take overtime into consideration yes? the past two months I have had solid overtime but before that the company has had a turbulent year for obvious reasons. will i need 3 months proof of solid overtime or more?

@dtmt With 3+ months of regular and consistent overtime, this could potentially be considered by some lenders, subject to underwriting of course. What is the house price you are looking at and what's the basic guaranteed salary?

DTMT

K_S said:

@dtmt With 3+ months of regular and consistent overtime, this could potentially be considered by some lenders, subject to underwriting of course. What is the house price you are looking at and what's the basic guaranteed salary?

@K_S The house is 225k and before overtime i earn £33,500

K_S

DTMT said:

K_S said:

@dtmt With 3+ months of regular and consistent overtime, this could potentially be considered by some lenders, subject to underwriting of course. What is the house price you are looking at and what's the basic guaranteed salary?

@K_S The house is 225k and before overtime i earn £33,500

@DTMT Realistically speaking, even if 100% of your overtime were considered (which is very very unlikely, 50-75% may be), you would need a minimum 15% deposit (£34k).

A conservative max borrowing figure (taking bonus at 50%) would be around 170-180k or so. Add on a 15% deposit and you have an approx budget.

The above is for mainstream-ish rates.

DTMT

@K_S Thank you. I'll keep saving then.

K_S

swtchick87 said:

K_S said:

swtchick87 said:

Still undergoing underwriting from barclays. We used a broker. My husband is employed but has a self employed job too, hence use of a broker. Its been nearly 3 weeks since we corresponded. No update. Shall i call barclays? 

@swtchick87 Tbh, 3 weeks is not too long at all when there's self-employed income in the mix and Barclays doing the processing. But if your broker isn't giving you an update, no harm in calling Barclays to see if they'll tell you anything more.

Thanks for the response. The application was submited end of November, with a hard search on the 24th Nov. 3 weeks ago was the last submission of additional docs. Is this reasonable?

@swtchick87 With Barclays, anything is possible. When it comes to things needed manual review, from experience, they are very poor even with the most straightforward of tasks. By that very low standard, I would say 3 weeks to review fresh information/documentation for a self-employed case is not too unreasonable.

Lauratemps

So there have probably been numerous people in a similar situation to myself but I would really appreciate any input you have on my situation in regards to potential to find a mortgage for a first-time purchase.
I spent many many years getting myself into real strife with store cards, pay day loans and had two CCJ's all as a result of financial ignorance from nearly 15 years ago. I have a CCJ which is finally going to drop off my credit report on 19th March and I have one missed payment with Barclaycard for over 12months ago for which I am in discussions to have removed as I believe to not be at fault. All other payments on time and my credit score has steadily been climbing, albeit slowly! My partner has one default over 2 years old from a final payment on a furniture loan that didn't go through and then she hadn't been notified due to moving house and not receiving communication. Other than that (and the missed payments reported associated with it for around 6 months) her credit report is unblemished. I have £3500 on a credit card that will be paid off before we look to apply and similarly my partner has £2500 on a credit card which will also be settled. 
We are both key workers in the Police and NHS and so have stable jobs with annually increasing salaries. Basic salaries for us both are around £47,500 without overtime and unsociable hours. We are hoping to buy with a 10% deposit but don't know whether we would be considered to the lenders returning to the market with a 10% deposit based on our credit histories. I do not feel it is feasible for us to find 15% presently when we still have our wedding outstanding as a result of Covid. 
My question is are we in a position where we may be able to apply successfully for a mortgage with a 10% deposit after my CCJ drops off in March or is the only current option 15% or waiting until the real market of 10% mortgages returns? 

K_S

@lauratemps You are absolutely right, there are a whole lot of FTBs who are effectively shut out of the market currently due to the dearth of 10% deposit products. The situation has improved considerably in the last couple of months and hopefully it will continue in that direction.

However, based on the limited info in your post, unless you are willing to consider higher interest rates, you are likely to need at least a 15% deposit for a realistic shot. But that's just based on very little information, the devil is in the detail. I would recommend that you get in touch with a broker to get a realistic idea of your chances.

lonibra

Hi, this forum and website have been very useful to me for many years now. We are buying a house in east London but our current broker looks like he is making a mess of it. The application has been in for more than three months now with NatWest but we are still no closer and getting asked for things we have a long time ago. The seller will not wait for much longer. I am self employed and I know it is difficult times for SE mortgages but it still seems a bit odd. My business is doing very well and I’ve not taken any grants.

Are there any problems with changing brokers now? Has anyone done this and how do we go about it?

K_S

@lonibra Well, the main problem with changing brokers is that your current NatWest application will need to be withdrawn. There is no way to 'transfer' the current application to a different broking firm. And then the new broker will need to do the whole advice bit and recommend a lender, put in an application and take it from there. Being a self employed applicant, there will almost certainly be manual review irrespective of the lender and it can easily take another few weeks at least. Will your seller hang on?

If all that sounds acceptable then you could indeed start off with a new broker. If you can evidence that your business hasn't been materially impacted by covid, there should be options. Do let your new broker know of any DIPs or applications that have gone in recently.

Good luck!