Mortgage broker - ask me anything

K_S

Skeptical_John said:

Hi
I'm hoping to get a 5 times salary mortgage and just wondering if there is a reasonable chance of this. This would be for a single person (teacher) 30k salary and 50k deposit so LTV of 75%. I have no debts/cards etc no dependants. 

@skeptical_John Potentially yes. A couple of specialist lenders and building societies *may* consider lending 5x at low LTVs on moderate salaries and/or certain professions (including teachers) but subject to strict underwriting. It's hard to say if your case stacks up with  the limited info in your post.

At 65% LTV a couple of bigger lenders come into the picture but unfortunately there's been a general tightening in LTIs over the last couple of weeks across lenders.

Carmen12

When you ask for a Barclays mortgage extension. Is like you have to start the process again ?? 

K_S

Carmen12 said:

When you ask for a Barclays mortgage extension. Is like you have to start the process again ?? 

@carmen12 Depends on when was the original offer made, whether it's a new build, reason and length of extension.

Carmen12

The original offer was made in october  , it will expire in April ..is a new build ..reason for extension because house will be ready in June .. so completion can’t be until that month . Thanks for your answer 

K_S

Carmen12 said:

The original offer was made in october  , it will expire in April ..is a new build ..reason for extension because house will be ready in June .. so completion can’t be until that month . Thanks for your answer 

@carmen12 For a new build offer, it's not wholly like a new application but the application will be reassessed as per current criteria (which, generally speaking should be less strict now when compared to last autumn) and with a refreshed credit search.

All that going as expected, you'll get re-offered an additional 6 months from when you apply for an extension.

With Barclays, how long that will take is anyone's guess. Anything that involves a human being looking at the case is a roll of the dice with Barclays, but hopefully your's comes through soon. Good luck!

Carmen12

Thank you very much ..   

waveneygnome

Is it possible to get a BTL mortgage on a recently inherited property (and rent out the property)?
If so, what sort of equity could we effectively release from the property based:  value £300k, rent £850pcm

K_S

waveneygnome said:

Is it possible to get a BTL mortgage on a recently inherited property (and rent out the property)?
If so, what sort of equity could we effectively release from the property based:  value £300k, rent £850pcm

@waveneygnome Potentially, yes. What you could release from a currently mortgage-free property can range from 150-225k depending on your personal circumstances, the reason for raising capital, which lender will lend, etc.

lis1320

I've just tried a few quick mortgage calculators to get an idea of what we can borrow. We've got £52,400 combined income, credit history clear, no dependants, no debt other than a car finance which is £220 a month. Here's what my searches showed:
- £248,900 (Nationwide, Halifax, HSBC) - this seems weird, shouldn't it be up to 4.5x our income? That would make it £235,800, but three lenders are quoting above this
- £233,180 (Santander)
- £222,700 (Natwest)
- £202,391 (Barclays - they were the only ones that asked how much are our pension payments)
With a £30,000 deposit added to this, it makes potential our potential property budget £230k-£278k. As much as I'd like to borrow less, the likelihood is we may need to go to the top of our budget. How do we decide what our budget really is ahead of viewings? I know these values are not really reliable, and even an AIP wouldn't be, since a more detailed finance check is needed. We don't want to waste our or anyone's time viewing unaffordable properties. 

K_S

lis1320 said:

I've just tried a few quick mortgage calculators to get an idea of what we can borrow. We've got £52,400 combined income, credit history clear, no dependants, no debt other than a car finance which is £220 a month. Here's what my searches showed:
- £248,900 (Nationwide, Halifax, HSBC) - this seems weird, shouldn't it be up to 4.5x our income? That would make it £235,800, but three lenders are quoting above this
- £233,180 (Santander)
- £222,700 (Natwest)
- £202,391 (Barclays - they were the only ones that asked how much are our pension payments)
With a £30,000 deposit added to this, it makes potential our potential property budget £230k-£278k. As much as I'd like to borrow less, the likelihood is we may need to go to the top of our budget. How do we decide what our budget really is ahead of viewings? I know these values are not really reliable, and even an AIP wouldn't be, since a more detailed finance check is needed. We don't want to waste our or anyone's time viewing unaffordable properties. 

@lis1320

- Max LTI depends on LTV, income and how much you are looking to borrow. As an example, NatWest has a 4.25x cap for all borrowing above 85% LTV but if you were borrowing at 75% LTV, they may lend up to 4.85x. If you were borrowing at 65% LTV or your income was £60k+, there are mainstream lenders who may give you 5x.

- So the most common range is from 4x-5x and different lenders and products will come in at different points on this scale

- I'm not sure you've used the affordability calcs correctly, Nationwide at 90% LTV shouldn't be going above 4.5x. Halifax and HSBC 4.49x.

- With most mainstream lenders, pension deductions are ignored unless they're on a salary sacrifice arrangement, so the Barclays figure in your post is most likely understated as well.

To get a realistic/accurate figure, as a broker, my clients come to me with the question "how much can I borrow'. I look at the overall picture and give them a realistic idea. At 90% LTV, I would also run an AIP with the most appropriate lender as lender "credit scoring" is very strict at 90% LTV so often the AIP can come back saying we can only do 85% LTV. I hope that makes sense.

If you don't want to use a broker, then the 4.5x (of your guaranteed PAYE basic income) ballpark is a reasonable estimate to take given your lack of committed outgoings.