Mortgage broker - ask me anything

K_S

debtfreeohyeah said:

Hi there,
First time poster, long time reader...

I’m looking to get a mortgage with my partner this year. She currently owns the house that we live in and would be selling that and putting the equity towards a new place - along with a mortgage.

She has excellent credit history with no issues at all. I have used Payday loans on and off over the years but much less in the last few years. The last one was settled just over 12 months ago and prior to that there was none for 7 months. I have no defaults on my account and everything on my credit reports is marked as settled. I had 3 missed payments against a payday loan that was repaid late in 2016, 1 missed payment against a loan in 2017 and 2 missed payments against a loan in 2018. Last missed payment is over 3 years ago. Anything that was missed was always settled. I have no current debt or balances owed and no overdraft. We have a combined income of £115k and currently around £30k saved for a deposit. We can top up the deposit from sale also. Will we get a mortgage with my history?

@debtfreeohyeah Based on the limited info in your post, I don't see anything which is a showstopper with regard to getting a mortgage as long as you're placed with an appropriate lender. Whether you can borrow what you need, at the LTV you're looking for and a rate you are happy with, depends on the details.

Gusta123

Just want to say that this thread is excellent and really helpful - thanks so much for taking the time to deal with all the questions!

I'm hoping to take advantage of the new 95% LTV scheme when it launches next month. I appreciate that lenders haven't released any details yet, but I'm pretty confident about being able to get one as I've got an excellent credit history. I've started looking at properties already just to get a feel for what's out there, but I'm wondering whether it's still too early to make an offer if I find somewhere I really like (I've got a couple of viewings booked at the weekend on some great-looking places).

I know you generally wait to apply for your mortgage until after you've offer's been accepted, and as April's only a few weeks away I feel like a 2-3 week wait to put the mortgage application in won't really make much of a difference - especially if I get solicitors instructed in the meantime to get thins moving - but realistically do you think it's silly to be thinking about making any offers until the 95% products are actually available and I've discussed them with an adviser?

Thanks a lot

K_S

Gusta123 said:

Just want to say that this thread is excellent and really helpful - thanks so much for taking the time to deal with all the questions!
I'm hoping to take advantage of the new 95% LTV scheme when it launches next month. I appreciate that lenders haven't released any details yet, but I'm pretty confident about being able to get one as I've got an excellent credit history. I've started looking at properties already just to get a feel for what's out there, but I'm wondering whether it's still too early to make an offer if I find somewhere I really like (I've got a couple of viewings booked at the weekend on some great-looking places).
I know you generally wait to apply for your mortgage until after you've offer's been accepted, and as April's only a few weeks away I feel like a 2-3 week wait to put the mortgage application in won't really make much of a difference - especially if I get solicitors instructed in the meantime to get thins moving - but realistically do you think it's silly to be thinking about making any offers until the 95% products are actually available and I've discussed them with an adviser?
Thanks a lot

@gusta123 There's nothing stopping you from making an offer but a good estate agent wouldn't take it seriously if they asked about your mortgage and you said that you're waiting for the 95% products. You know that you'll get it but they only have your word for it. I hope that makes sense.

For my clients in red-hot markets such as the outer suburbs of London and the leafy part of the south-east, plenty of EAs are even asking for an AIP or confirmation from the broker just to book a viewing, let alone make an offer.

lis1320

K_S said:

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.

@K_S
I did the quick mortgage calculations, all they ask for was number of applicants, income, outgoings (loans, credit, some ask for travel, some don’t), number of dependants, property value, deposit and mortgage term. I don’t think I entered anything incorrectly, but maybe the quick calculators give different results than affordability ones.

I think I’ll use the 4.5x as the estimate for now. Thought about doing an AIP but my partner is teacher training this year and job doesn’t start until September so wouldn’t have an employer to put down.

Separate question I had and wondered if you would be able to answer - I saw that Nationwide doesn’t offer 90% LTV on flats.  We’re in the south east and a flat is all we may be able to afford. Any other mainstream lenders who we could consider? 

As always, thank you for sharing your knowledge! 

EctoBradders

My father died last year and I received some inheritance which I want to put towards buying a house. The house I want to buy is the house I've been renting privately for the past 4.5 years, it has an s157 local restrictive covenant on it. My husband and I both have defaults on our credit files. These two things combined are making finding a mortgage lender very difficult, if they will accept the default they won't accept the covenant and vice versa. Do you have any advice on lenders please?

K_S

lis1320 said:

K_S said:

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.

@K_S
I did the quick mortgage calculations, all they ask for was number of applicants, income, outgoings (loans, credit, some ask for travel, some don’t), number of dependants, property value, deposit and mortgage term. I don’t think I entered anything incorrectly, but maybe the quick calculators give different results than affordability ones.

I think I’ll use the 4.5x as the estimate for now. Thought about doing an AIP but my partner is teacher training this year and job doesn’t start until September so wouldn’t have an employer to put down.

Separate question I had and wondered if you would be able to answer - I saw that Nationwide doesn’t offer 90% LTV on flats.  We’re in the south east and a flat is all we may be able to afford. Any other mainstream lenders who we could consider? 

As always, thank you for sharing your knowledge! 

@lis1320 4.5x is a very reasonable estimate to use. Good on you for not running AIPs willy nilly.

Where have you seen that Nationwide will not do 90% LTV on (non new-build) flats?

lis1320

K_S said:

lis1320 said:

K_S said:

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.

@K_S
I did the quick mortgage calculations, all they ask for was number of applicants, income, outgoings (loans, credit, some ask for travel, some don’t), number of dependants, property value, deposit and mortgage term. I don’t think I entered anything incorrectly, but maybe the quick calculators give different results than affordability ones.

I think I’ll use the 4.5x as the estimate for now. Thought about doing an AIP but my partner is teacher training this year and job doesn’t start until September so wouldn’t have an employer to put down.

Separate question I had and wondered if you would be able to answer - I saw that Nationwide doesn’t offer 90% LTV on flats.  We’re in the south east and a flat is all we may be able to afford. Any other mainstream lenders who we could consider? 

As always, thank you for sharing your knowledge! 

@lis1320 4.5x is a very reasonable estimate to use. Good on you for not running AIPs willy nilly.

Where have you seen that Nationwide will not do 90% LTV on (non new-build) flats?

I’ve attached a screenshot. This is from their First Time Buyer Calculator (https://firsttimebuyer.nationwidemortgages.co.uk/landing) 

K_S

lis1320 said:

K_S said:

lis1320 said:

K_S said:

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.

@K_S
I did the quick mortgage calculations, all they ask for was number of applicants, income, outgoings (loans, credit, some ask for travel, some don’t), number of dependants, property value, deposit and mortgage term. I don’t think I entered anything incorrectly, but maybe the quick calculators give different results than affordability ones.

I think I’ll use the 4.5x as the estimate for now. Thought about doing an AIP but my partner is teacher training this year and job doesn’t start until September so wouldn’t have an employer to put down.

Separate question I had and wondered if you would be able to answer - I saw that Nationwide doesn’t offer 90% LTV on flats.  We’re in the south east and a flat is all we may be able to afford. Any other mainstream lenders who we could consider? 

As always, thank you for sharing your knowledge! 

@lis1320 4.5x is a very reasonable estimate to use. Good on you for not running AIPs willy nilly.

Where have you seen that Nationwide will not do 90% LTV on (non new-build) flats?

I’ve attached a screenshot. This if from their First Time Buyer Calculator (https://firsttimebuyer.nationwidemortgages.co.uk/landing) 

Thank you! It appears that it is indeed part of their enhanced criteria for 90% lending. I haven't had a client buying a non new-build flat in quite some time now since covid, hence my rusty criteria knowledge in that area

Russ39326

I've applied via a broker to Halifax. 15% deposit. Valuation fee paid. Hard search done. Valuation next week and legal searches underway. Do Halifax let it get this far if they dont like the look of the app? Loan is £145k and basic salary £50k

K_S

Russ39326 said:

I've applied via a broker to Halifax. 15% deposit. Valuation fee paid. Hard search done. Valuation next week and legal searches underway. Do Halifax let it get this far if they dont like the look of the app? Loan is £145k and basic salary £50k

@russ39326 Generally speaking - Halifax, 85% LTV, PAYE income, < 3x borrowing, I would expect that the "underwriting" is already done. Almost all of my Halifax cases with similar profiles in the last few months have offered in 1-2 days (where there's a desktop val) and the same/next day of valuation where it's been physical. 

Obviously the above is just a general comment that may or may not apply to your particular case depending on the specifics.