Mortgage broker - ask me anything

K_S

RyanT1992 said:

K_S said:

RyanT1992 said:

Hi all, 
I'm a first-time buyer in a bit of a tricky situation with regards to my credit history, and wondered if anyone could help?
I'm buying with my partner in the next year
- Both credit ratings good (I know it means nothing)
- Combined salary of £80-85k (expecting payrise before then), in full-time permanent jobs (Marketing & Private Nanny)
- 10% deposit
BUT
- I had a serious gambling problem (100+ payday loans over the past 6 years)
- Most of them 2018 or before
- By the time we apply for a mortgage, I won't have had any loans in the past year (nearer two years) or gambled in two years
Will we struggle to get a mortgage? And if we can get a mortgage, do you think we'd be able to borrow 4.5x our salary, or will it likely be a much lower multiple? We're buying near London, so obviously every penny helps massively in that respect...
I just want to set our expectations somewhere near reality, as the online mortgage calculators don't bring into account the payday loan history (and I won't go for an AIP until it's been at least a year since last payday loan) - the online tools say we can borrow anything from £250-400k, which is just not helpful at all!
Thank you in advance to anyone who can help!

@ryant1992 It all depends on the specifics. Impossible to predict what the high-LTV market will look like in 6-12 months, but if it's anything like now, I think you might struggle to get anything close to mainstream rates with a 10% deposit and the relatively recent history of payday loans. Whether you are able to potentially borrow 4.5x your guaranteed income will depend on what kind of debt you carry and committed outgoings.

Besides keeping your credit history squeaky clean, the single best thing you could do to dramatically improve your chances is up your deposit to 15%.

To be able to maximise your borrowing, focus on paying off or reducing debt and expensive monthly commitments.

Thank you for the reply, really helpful. Will obviously aim for 15% deposit, but that’s another 6-12 months of saving, which is a lot as I’ve been living with family for 7 years now! We aren’t going to move until the market settles down anyway, although as you say, may not ever settle down again (surely it will though, as banks need people borrowing) 
Debt wise - No debt at all apart from student loan. 

What do you mean by committed outgoings? Is that phone bill & gym? We don’t have any dependants or anything. 

Am I right in thinking (after reading your comment) that the interest rate is linked to your credit history and the 4.5x thing would be linked to my current situation? Or is it all linked? 

@ryant1992 If you have no debt, low outgoings (gym and phone bill should be fine), no dependents and are flexible with the term (assuming you're only 28-29 from your username) then affordability is unlikely to be an issue.

Interest rates aren't tailored to individual circumstances per se. Mainstream lenders have a suite of "products" with specific interest rates. They will also have a certain risk appetite and will not lend to certain customer profiles which differ from lender to lender.

RyanT1992

K_S said:

RyanT1992 said:

K_S said:

RyanT1992 said:

Hi all, 
I'm a first-time buyer in a bit of a tricky situation with regards to my credit history, and wondered if anyone could help?
I'm buying with my partner in the next year
- Both credit ratings good (I know it means nothing)
- Combined salary of £80-85k (expecting payrise before then), in full-time permanent jobs (Marketing & Private Nanny)
- 10% deposit
BUT
- I had a serious gambling problem (100+ payday loans over the past 6 years)
- Most of them 2018 or before
- By the time we apply for a mortgage, I won't have had any loans in the past year (nearer two years) or gambled in two years
Will we struggle to get a mortgage? And if we can get a mortgage, do you think we'd be able to borrow 4.5x our salary, or will it likely be a much lower multiple? We're buying near London, so obviously every penny helps massively in that respect...
I just want to set our expectations somewhere near reality, as the online mortgage calculators don't bring into account the payday loan history (and I won't go for an AIP until it's been at least a year since last payday loan) - the online tools say we can borrow anything from £250-400k, which is just not helpful at all!
Thank you in advance to anyone who can help!

@ryant1992 It all depends on the specifics. Impossible to predict what the high-LTV market will look like in 6-12 months, but if it's anything like now, I think you might struggle to get anything close to mainstream rates with a 10% deposit and the relatively recent history of payday loans. Whether you are able to potentially borrow 4.5x your guaranteed income will depend on what kind of debt you carry and committed outgoings.

Besides keeping your credit history squeaky clean, the single best thing you could do to dramatically improve your chances is up your deposit to 15%.

To be able to maximise your borrowing, focus on paying off or reducing debt and expensive monthly commitments.

Thank you for the reply, really helpful. Will obviously aim for 15% deposit, but that’s another 6-12 months of saving, which is a lot as I’ve been living with family for 7 years now! We aren’t going to move until the market settles down anyway, although as you say, may not ever settle down again (surely it will though, as banks need people borrowing) 
Debt wise - No debt at all apart from student loan. 

What do you mean by committed outgoings? Is that phone bill & gym? We don’t have any dependants or anything. 

Am I right in thinking (after reading your comment) that the interest rate is linked to your credit history and the 4.5x thing would be linked to my current situation? Or is it all linked? 

@ryant1992 If you have no debt, low outgoings (gym and phone bill should be fine), no dependents and are flexible with the term (assuming you're only 28-29 from your username) then affordability is unlikely to be an issue.

Interest rates aren't tailored to individual circumstances per se. Mainstream lenders have a suite of "products" with specific interest rates. They will also have a certain risk appetite and will not lend to certain customer profiles which differ from lender to lender.

Appreciate that, thanks. Yeah I’ll be basically 30 by the time I buy, with combined salary of £80/85k, looking to borrow 4.5x combined salary with a 10% deposit (15% if I can hold out another 6-12 months). Bad history of PDL, but no negative marks against any of them (but I understand them merely being on there is a negative mark in itself). You think I’ll be okay to borrow that? And flexibility as in higher terms than 25 years? Also, with those things in mind, is there a best time of year/month to apply for a mortgage, or does it not matter? I guess a broker would help with the physical finding of lenders that would lend to me, so they’d cover that. 

perdusys

K_S said:

perdusys said:

K_S said:

perdusys said:

Is there any way of having a mortgage for a property that is let, without it being a "buy to let" mortgage?  My son currently has a mortgage with Landmark ( formerly a Northern Rock Together mortgage) that he is paying £375 annually for a consent to let. The mortgage was taken out in 2007 and when his marriage broke up, he moved away and has let the flat ever since.  The flat is in negative equity, and worth less than the £50,000 mortgage prisoner threshold if you don't include the loan part of the mortgage. This is his only property, and he is unable to sell without losing a fair amount of money.  The rental does not cover his expenses.  His current rate is 5%.
Any ideas would be welcome, the current mortgage rate is crippling. I'm not even sure you can get a buy to let as every calculator we've filled in has said nothing available.

@perdusys Unless he evicts the tenant and intends to move back in, I don't know of any way that he could do a residential remortgage with the property being tenanted. For a buy-to-let mortgage, he would need a minimum of 20%+ equity in the property and the rental figures to stack up.

Thanks, not sure thats going to be possible with a repayment buy to let. The market value is close to or just lower than the outstanding mortgage, then there is the £7K together loan portion of the mortgage.  Rental value would be fine I think on an interest only, but I don't think he wants to take that risk as its quite a depressed area.  I am assuming that Landmark will not remortgage, and its unlikely he could move it?

@perdusys He'll need 20%+ equity to be able to get an interest-only BTL mortgage. Unless he has the cash to put in, that option is not going to work.

Does he have another property at all that he could take some money out of? Either to sell the property and pay-off the negative equity or to use to remortgage to a BTL?

You say that he doesn't want to sell it as he will lose a fair amount of money. Realistically, that money is already gone isn't it. And you're just stuck with leeches like the current lender who will milk you for every penny they can lay their hands on.

He doesn't have any other property, and if necessary we could find 20% deposit for him but I'm not sure it is financially viable.  It may well be worth him cutting his losses but he needs to make sure it doesn't affect his credit rating etc if he wants to get another mortgage at some time.  

mowgliisaG

Brokers - how long are platform mortgage offers valid??? Do they offer 3 month or 6?

K_S

mowgliisaG said:

Brokers - how long are platform mortgage offers valid??? Do they offer 3 month or 6?

@mowgliisaG I haven't used them in a while but if I remember correctly it's 6 months like other mainstream lenders since covid.

mowgliisaG

K_S said:

mowgliisaG said:

Brokers - how long are platform mortgage offers valid??? Do they offer 3 month or 6?

@mowgliisaG I haven't used them in a while but if I remember correctly it's 6 months like other mainstream lenders since covid.

Thanks @K_S

Ever heard of them doing 3 months??
if the offer expires with completion due in a week...would they extend?

K_S

mowgliisaG said:

K_S said:

mowgliisaG said:

Brokers - how long are platform mortgage offers valid??? Do they offer 3 month or 6?

@mowgliisaG I haven't used them in a while but if I remember correctly it's 6 months like other mainstream lenders since covid.

Thanks @K_S

Ever heard of them doing 3 months??
if the offer expires with completion due in a week...would they extend?

@mowgliisaG 3 months not anytime recently. Sorry, other than one ill fated BTL case which they completely messed up, I've thankfully not had much to do with Platform the past few months and never asked them for an offer extension in memory. Hopefully someone else will comment.

mowgliisaG

K_S said:

mowgliisaG said:

K_S said:

mowgliisaG said:

Brokers - how long are platform mortgage offers valid??? Do they offer 3 month or 6?

@mowgliisaG I haven't used them in a while but if I remember correctly it's 6 months like other mainstream lenders since covid.

Thanks @K_S

Ever heard of them doing 3 months??
if the offer expires with completion due in a week...would they extend?

@mowgliisaG 3 months not anytime recently. Sorry, other than one ill fated BTL case which they completely messed up, I've thankfully not had much to do with Platform the past few months and never asked them for an offer extension in memory. Hopefully someone else will comment.

Anyone else know of 3 month platform offer??

ashok.198311

Hi, I applied for Mortgage from Leeds Building Society, I have taken a 5 year Product with them(The Product now Withdrawn), However I am thinking to change this to a 2 year product now. The Application is submitted about 22 days back and I believe they have completed the valuation on the property. Can I still change this product with them? is the process really difficult? How long it could take? does it involve any charges?

K_S

ashok.198311 said:

Hi, I applied for Mortgage from Leeds Building Society, I have taken a 5 year Product with them(The Product now Withdrawn), However I am thinking to change this to a 2 year product now. The Application is submitted about 22 days back and I believe they have completed the valuation on the property. Can I still change this product with them? is the process really difficult? How long it could take? does it involve any charges?

@ashok.198311 Assuming it's a resi mortgage, generally speaking as a broker it's a fairly straightforward process to change the product after an offer has been issued. Not sure how it is specifically for Leeds as I haven't had to do so.