Mortgage broker - ask me anything

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lf93 said:

I've read conflicting things about Halifax's process with valuation and underwriting. I know a lot of their stuff is automated.
Most of what I've read is that applications get approved provisionally before valuation then after valuation if all is well an offer comes in. 
We had a desktop valuation the day of application and valuation was fine. Are you receiving responses quickly after that? The quickest I've read is same day as valuation. We're only 2 days down the line from valuation, but just trying to manage my expectations of when to hear! 
We are not self employed, all they asked for was 1 payslip on application. AFAIK they haven't asked for any more (done through broker). 
Thanks

I’m with the Halifax and I complete on Monday. See my footnote for timeline.

Once my valuation had been done, my broker emailed me the offer the following day. It took over a week to arrive in the post.

Good luck! 

Veeo

Hi, please I need some advice.

I rented out my property outside London (had a permit to let from my mortgage provider) and moved into a rental property in London. However is am not ready to sell my property and buy something in London to live in.

Please my big question is:

Seeing as the rent I get from my property is classed as "earned income" which I also pay tax on the "rental profit", would the "earned income" I get from the rental property be added to the income I get from my day job to determine my affordability on the property I am looking to buy to live in?

Please help me 🙏

K_S

Sotts said:

Question about life insurance, critical illness etc.   Buying property with my husband.  I am the sole earner and not reliant on him for money.
My employer pays sick pay at 6 months full, 6 months half pay.  Death in service benefit 3.5 times salary.
What would you recommend in terms of life,critical illness and payment protection.    I want my husband covered if anything happens to me, but not sure i need cover for anything happening to him due to him having no income.

@sotts Just to clear, these are very general comments intended to give you an idea of some aspects of protection that you may want to consider. I don't know your whole circumstances so please don't take this as advice. Based on the limited info in your post -

- you may want to ensure that the mortgage can be paid off in full if you pass away. Your 3.5 times death in service benefit might suffice for that. If not, you could consider top up life cover.

- you could get critical illness cover along with the life cover to pay a lump-sum in case you get ill with a serious illness and (say) your husband needs to take time off to take care of you or cover other expenses.

- to cover the risk of losing income from long term illness/disability you could consider taking out income protection. Since you have generous paid sick leave, you could have a deferred period of 6 - 12 months for the income protection policy which will bring down the cost dramatically.

Even when one partner isn't an income earner, you may still want to consider protection for what may happen if they pass away. For example will the surviving partner need to quit their job to look after the kids full time, will they then be able to afford mortgage payments, might they have to relocate to another part of the country, etc etc. It may be worth considering what happens in that scenario or in the scenario that your husband gets seriously ill for a prolonged period of time.

I think my post is getting increasingly dark, so I'll leave it at that

K_S

Veeo said:

Hi, please I need some advice.

I rented out my property outside London (had a permit to let from my mortgage provider) and moved into a rental property in London. However is am not ready to sell my property and buy something in London to live in.

Please my big question is:

Seeing as the rent I get from my property is classed as "earned income" which I also pay tax on the "rental profit", would the "earned income" I get from the rental property be added to the income I get from my day job to determine my affordability on the property I am looking to buy to live in?

Please help me 🙏

@veeo Unfortunately it's very unlikely. With a rental property on a CTL (I assume it's a repayment mortgage), it's very unlikely that there'll be sufficient "surplus income" as per lender calculations to add to your affordability. In fact it might even work the other way, reducing your affordability. 

Different lenders treat it differently. But you could play around with the Santander calculator here to see the impact of the property in the background. It'll give you a rough idea.
https://www.santanderforintermediaries.co.uk/calculators-and-forms/affordability/

Veeo

K_S said:

Veeo said:

Hi, please I need some advice.

I rented out my property outside London (had a permit to let from my mortgage provider) and moved into a rental property in London. However is am not ready to sell my property and buy something in London to live in.

Please my big question is:

Seeing as the rent I get from my property is classed as "earned income" which I also pay tax on the "rental profit", would the "earned income" I get from the rental property be added to the income I get from my day job to determine my affordability on the property I am looking to buy to live in?

Please help me 🙏

@veeo Unfortunately it's very unlikely. With a rental property on a CTL (I assume it's a repayment mortgage), it's very unlikely that there'll be sufficient "surplus income" as per lender calculations to add to your affordability. In fact it might even work the other way, reducing your affordability. 

Different lenders treat it differently. But you could play around with the Santander calculator here to see the impact of the property in the background. It'll give you a rough idea.
https://www.santanderforintermediaries.co.uk/calculators-and-forms/affordability/

Thank you so much for answering my questions, very much appreciated. 

Yes I am on repayment mortgage on the CTL. Sorry please could you explain what you mean by "surplus income"? 

I think maybe I haven't Calculated my "rental profit correctly because I am having to pay back £3,750 to the tax man for the year on a property I renting out for £975 month

I have used a calculator to see how much I can borrow on my salary but I am just not sure where the "earned income" goes in the calculator or how it will affect my affordability. Hmmm I am so confused.

 

Skint_yet_Again

My son has a bank loan and him and his girlfriend have cars on PCP. Do these reduce the amount of mortgage they can get ? 

K_S

Skint_yet_Again said:

My son has a bank loan and him and his girlfriend have cars on PCP. Do these reduce the amount of mortgage they can get ? 

@Skint_yet_Again

Sometimes but not always. Among other things, it also depends on their income and age (how long the term can be stretched). Try playing around with this calculator to see what the impact may be. Just to be clear, it will differ from lender to lender, this is just one example.

https://www.halifax-intermediaries.co.uk/tools_and_calculators/mortgage_affordability_calculator/default.aspx

K_S

Veeo said:

K_S said:

Veeo said:

Hi, please I need some advice.
I rented out my property outside London (had a permit to let from my mortgage provider) and moved into a rental property in London. However is am not ready to sell my property and buy something in London to live in.

Please my big question is:

Seeing as the rent I get from my property is classed as "earned income" which I also pay tax on the "rental profit", would the "earned income" I get from the rental property be added to the income I get from my day job to determine my affordability on the property I am looking to buy to live in?
Please help me 🙏

@veeo Unfortunately it's very unlikely. With a rental property on a CTL (I assume it's a repayment mortgage), it's very unlikely that there'll be sufficient "surplus income" as per lender calculations to add to your affordability. In fact it might even work the other way, reducing your affordability. 

Different lenders treat it differently. But you could play around with the Santander calculator here to see the impact of the property in the background. It'll give you a rough idea.
https://www.santanderforintermediaries.co.uk/calculators-and-forms/affordability/

Thank you so much for answering my questions, very much appreciated. 
Yes I am on repayment mortgage on the CTL. Sorry please could you explain what you mean by "surplus income"? 
I think maybe I haven't Calculated my "rental profit correctly because I am having to pay back £3,750 to the tax man for the year on a property I renting out for £975 month
I have used a calculator to see how much I can borrow on my salary but I am just not sure where the "earned income" goes in the calculator or how it will affect my affordability. Hmmm I am so confused.

@veeo You don't put "earned income" anywhere as it's the lender's calculations that matter. In the calculator link that I shared, it asks if you will "own any other properties on completion of this mortgage?". Just answer yes to that and put in the numbers, that'll give you a rough idea of the impact on affordability.

MFWannabe

Veeo said:

K_S said:

Veeo said:

Hi, please I need some advice.

I rented out my property outside London (had a permit to let from my mortgage provider) and moved into a rental property in London. However is am not ready to sell my property and buy something in London to live in.

Please my big question is:

Seeing as the rent I get from my property is classed as "earned income" which I also pay tax on the "rental profit", would the "earned income" I get from the rental property be added to the income I get from my day job to determine my affordability on the property I am looking to buy to live in?

Please help me 🙏

@veeo Unfortunately it's very unlikely. With a rental property on a CTL (I assume it's a repayment mortgage), it's very unlikely that there'll be sufficient "surplus income" as per lender calculations to add to your affordability. In fact it might even work the other way, reducing your affordability. 

Different lenders treat it differently. But you could play around with the Santander calculator here to see the impact of the property in the background. It'll give you a rough idea.
https://www.santanderforintermediaries.co.uk/calculators-and-forms/affordability/

Thank you so much for answering my questions, very much appreciated. 

Yes I am on repayment mortgage on the CTL. Sorry please could you explain what you mean by "surplus income"? 

I think maybe I haven't Calculated my "rental profit correctly because I am having to pay back £3,750 to the tax man for the year on a property I renting out for £975 month

I have used a calculator to see how much I can borrow on my salary but I am just not sure where the "earned income" goes in the calculator or how it will affect my affordability. Hmmm I am so confused.

 

I thought you’d stayed you were going to sell the property? So how can rental income be included in affordability? 

Michael_Bear

Why are 2 year tracker rates on mortgages so high? I'm on a +0.64% (0.74%) from Sept 2019 but all the new products seem to be +1.69%ish (1.79%). Why such a big jump?