Mortgage broker - ask me anything

ftbuk05

Hi, 
I'm a FTB trying to get on the property ladder. I was wondering how likely it is that mortgage lenders take bonuses into consideration when checking your affordability. Mine isn't a guaranteed bonus but I've got it consistently for the last 5 years, and over the last three years I've averaged at £6,000 annually. Can that be used in addition to my salary? 
Thanks

pinkcloud17

Is a parent on state benefits allowed to give money as a gifted deposit? Thanks

chatlow

Hi,

After a bit of advice please. Currently renting a house that my Sister owns. We are now looking to either buy from her (at 10k cheaper than market rate ~230k) or buy elsewhere. We are looking around but it's not been a quick process.

If we were to buy off her (she could use the money at the moment) then potentially sell in 6 months time - once we've found the right home - then 1; would this be possible or do some mortgage lenders need a longer commitment? and 2, how would this affect our credit rating buying and selling so quickly in succession?

If it's going to cause too much stress then we may rent elsewhere if she needs to sell sooner

Appreciate any input!

Thanks,

K_S

ftbuk05 said:

Hi, 
I'm a FTB trying to get on the property ladder. I was wondering how likely it is that mortgage lenders take bonuses into consideration when checking your affordability. Mine isn't a guaranteed bonus but I've got it consistently for the last 5 years, and over the last three years I've averaged at £6,000 annually. Can that be used in addition to my salary? 
Thanks

@ftbuk Given what you've said, there will be lenders happy to take it into consideration. Depending on the lender, it could be anywhere from 30-75%.

K_S

pinkcloud17 said:

Is a parent on state benefits allowed to give money as a gifted deposit? Thanks

@pinkcloud17 From the lender point of view, it doesn't matter whether the giftor is employed, on benefits, retired, etc. Any giftor may be asked to prove the source of funds by the lender or the conveyancer.

ftbuk05

Thanks for answering my question about bonuses. I have another. I'm getting quite confused with affordability, I understand it varies from lender to lender but it seems to make it difficult to understand what I can/can't afford. For context, I earn 44k annually (+ 6k 2-year avg yearly bonus, not guaranteed) have 30k in savings + parents will gift me 15k for deposit. Have no debts, credit score is perfect and there are no issues on my file. No loans aside from my student loan which I repay each month. Single and with no dependents. From basic borrowing calculators online I've been offered everything from 170k to 237k but which is right? I've also had a DIP from Natwest (done online) offering me £225k but now unsure whether my bonus would cause problems in me getting to this amount once I do the actual mortgage application. So basically what I'm asking is: is there a surer way of finding out exactly what you'll be lent by the majority of lenders? Or do I just have to trust this DIP and hope for the best when it comes to making a mortgage application? Thanks in advance. 

moneyworrier2021

I have a question please.

Took out a mortgage with Precise last March with a 5% interest rate fixed for 2 years. Reason being that i have a default on my credit file and at time, we were a single income household. If by next March the default is 'satisfied' with a Full & Final settlement plus our Household income, has over doubled with over 6 months of bank statements to prove, am i likely to get a better rate, either with Precise or going elsewhere? 

I cant think of what else is worth trying to sort beforehand to try and increase my chances

K_S

ftbuk05 said:

Thanks for answering my question about bonuses. I have another. I'm getting quite confused with affordability, I understand it varies from lender to lender but it seems to make it difficult to understand what I can/can't afford. For context, I earn 44k annually (+ 6k 2-year avg yearly bonus, not guaranteed) have 30k in savings + parents will gift me 15k for deposit. Have no debts, credit score is perfect and there are no issues on my file. No loans aside from my student loan which I repay each month. Single and with no dependents. From basic borrowing calculators online I've been offered everything from 170k to 237k but which is right? I've also had a DIP from Natwest (done online) offering me £225k but now unsure whether my bonus would cause problems in me getting to this amount once I do the actual mortgage application. So basically what I'm asking is: is there a surer way of finding out exactly what you'll be lent by the majority of lenders? Or do I just have to trust this DIP and hope for the best when it comes to making a mortgage application? Thanks in advance. 

@ftbuk05 Roughly speaking, based on the limited info in your post, I would estimate your max borrowing at 85% LTV to be in the range of £210-225k depending on how the specific lender sees your bonus and what percentage of it is considered for affordability. At 75% LTV it could go up to £225-240k. 

You could check out individual lender affordability calculators/criteria (pay particular attention to how they treat bonus) or use a broker who can look at your scenario and give you a realistic borrowing figure.

K_S

moneyworrier2021 said:

I have a question please.

Took out a mortgage with Precise last March with a 5% interest rate fixed for 2 years. Reason being that i have a default on my credit file and at time, we were a single income household. If by next March the default is 'satisfied' with a Full & Final settlement plus our Household income, has over doubled with over 6 months of bank statements to prove, am i likely to get a better rate, either with Precise or going elsewhere? 

I cant think of what else is worth trying to sort beforehand to try and increase my chances

@moneyworrier2021 Will depend on a lot of factors - when was the default registered, how much, what account, state of the rest of your credit history, current LTV, etc.

jd87

I have a question - sorry if this a common one.

I'm hoping to apply for a mortgage sometime in the next 6 months. First time buyer. Rough figures are £300k property, £240k mortgage. £30k deposit from me and £30k deposit gift from parents. I have about £4000 on a credit card at 0% interest, but the 0% period is ending in a couple of weeks. Which of these is the better option?:

A. Use some of my deposit savings to pay off the credit card now - meaning my parents will need to gift me more of the deposit.

B. Transfer the credit card balance onto a new 0% card which I apply for now, meaning I will have £4k more deposit of my own money.

I assume it's better to go with option A - get rid of the card altogether and avoid having any new credit applications on my file, but just want to check.