Mortgage broker - ask me anything

Vincygirl

Hubby and I bought a new build using HTB on 5 yr fixed, we now rent the house have consent to let due to work and living cost are extremely minimal due to having accommodation with work. We have continued to pay the normal even with a slight overpayment as normal and have been saving the money received from our tenants, thinking ahead we would love to buy a bigger property for us but continue to rent our current property. Would it be possible for us to repay the government loan and do let to buy at the same time? What is the way way to achieve this? Thanks in advance. 

K_S

Vincygirl said:

Hubby and I bought a new build using HTB on 5 yr fixed, we now rent the house have consent to let due to work and living cost are extremely minimal due to having accommodation with work. We have continued to pay the normal even with a slight overpayment as normal and have been saving the money received from our tenants, thinking ahead we would love to buy a bigger property for us but continue to rent our current property. Would it be possible for us to repay the government loan and do let to buy at the same time? What is the way way to achieve this? Thanks in advance. 

@vincygirl Assuming this is a freehold house, and you will have sufficient equity, at least 25% (after paying off the equity loan), in principle there's nothing stopping you from doing a let to buy and using any released cash towards the deposit for a new home.

The mechanics are as follows, you remortgage (with a capital raise) the house to a let2buy BTL product (ideally 75% LTV if the numbers stack up). These funds are used to pay off the current mortgage, pay off the equity loan and anything left can be used towards the deposit.

That deposit is then used for the residential purchase mortgage for your new home.

For a let2buy, the transactions need to complete simultaneously.

You could also do it in two stages. Remortgage the house to a BTL product and raise capital. Then look for a new home to buy at your own convenience. Technically, this won't be a let2buy and you choice of lenders will be significantly lower due to not being an owner occupier.

rev_henry

I have 2 offers on the table. Both 5 year fixes. One is slightly more expensive but no ERC. The other the standard 10% overpay allowance. We do tend to hammer the overpayments but I cannot for the life of me work out the break even point or how much we'd have to overpay to make the 'no ERC' one worthwhile. Is there a way of calculating this?! By my reckoning the more expensive one is around £700 more over 5 years.
thanks

robrymond

I'm after some knowledge on providers who accept 5x LTI on a combined income of £57,000 with £4200 in bonuses. Property is £341,995 with a deposit of £56,995. We're struggling and Virgin can't confirm if they will extend our offer and now there new criteria is 4.49x income for 80% LTV and above.

K_S

robrymond said:

I'm after some knowledge on providers who accept 5x LTI on a combined income of £57,000 with £4200 in bonuses. Property is £341,995 with a deposit of £56,995. We're struggling and Virgin can't confirm if they will extend our offer and now there new criteria is 4.49x income for 80% LTV and above.

@robrymond Is it 57k basic plus 4k bonus? Track record for the bonus? New build house? Is any of the applicants a qualified "professional"?

Unfortunately there's been a tightening of LTIs in recent weeks so there are only a couple of lenders who may consider 5x at 85% LTV for applicants on moderate incomes, assuming the rest of the case stacks up.

Virgin did extend a 4.75x+ offer for a client last week but they were only off by a few hundred quid on affordablity under the new rules.

robrymond

£57K basic and 4K bonus combined yes. It will be a new build and none of us are professional. £1200 of the bonus is paid in monthly installments and £3000 of it was paid in two payments in Dec/Feb though this is classed as annual and a letter to back this up.

Virgin say they can do nothing to look into it until May, the month before it expires and I don't fancy leaving it that late. 
HSBC seems the closest but they way they calculate bonuses is throwing us off a bit. There intermediaries calculator says we could lend £290K but after speaking with them, they say they'll trim the bonus amounts. Whats the point of an incorrect calculator?! 

K_S

robrymond said:

£57K basic and 4K bonus combined yes. It will be a new build and none of us are professional. £1200 of the bonus is paid in monthly installments and £3000 of it was paid in two payments in Dec/Feb though this is classed as annual and a letter to back this up.

Virgin say they can do nothing to look into it until May, the month before it expires and I don't fancy leaving it that late. 
HSBC seems the closest but they way they calculate bonuses is throwing us off a bit. There intermediaries calculator says we could lend £290K but after speaking with them, they say they'll trim the bonus amounts. Whats the point of an incorrect calculator?! 

@robrymond Assuming it's a new-build house (and not a flat), there's only one mainstream lender I can think of who may consider 5x basic upon manual underwriting. But it's impossible to say if your case stacks up or not without knowing all pertinent details and running the case past them.

HSBC is not going to lend at 5x at 85% LTV, unless they have a more liberal policy for direct customers.

You still have a while to go before your Virgin offer expires, so LTI caps could get better by then.

Tumble1620

Bank Statements - how much do lenders get caught up with outgoings? Big portion of my monthly pay goes to my savings account which I know is fine but due to covid i have been temporarily living with my boyfriend and rather than paying rent i buy the food shopping on average £70-80 a week, when i am back with my parents i am usually £120 per month rent, worried this average £300 per month outgoing is going to be seen as a permanent outgoing?

K_S

alanyau88 said:

Hi, 
Could anyone help me please?  I'm looking for a re-mortgage but my problem is not my credit rating which is excellent with experian, equifax, and transunion.  The problem is that my property is a two bedroom terrace house and the construction is a timber frame construction with timber frame walls and GRP panels cladding.  The construction type is Resiform Timber Frame as stated in Nationwide's Surveyor Manual.  This is not absolutely fatal but the complexity is that the property is in the name of my limited company and I'm looking to let the property out.  Together Money is the only lender that will consider this at very high rates and on a 5 year SVR with hefty ERC's.
I have nearly lost all hope as a few mortgage brokers have already deserted me.  Will mortgage brokers run a mile on a case like this or is there any chance of finding a better lender?  Thanks in advance!

@alanyau88 If you've already talked to a 'few mortgage brokers' and they aren't just the L&C-Habito-Trussle types, you're probably out of luck. Together is usually the lender-of-last-resort who will pretty much lend on anything at the right LTV and a sky-high rate.

K_S

donnadrake said:

Bank Statements - how much do lenders get caught up with outgoings? Big portion of my monthly pay goes to my savings account which I know is fine but due to covid i have been temporarily living with my boyfriend and rather than paying rent i buy the food shopping on average £70-80 a week, when i am back with my parents i am usually £120 per month rent, worried this average £300 per month outgoing is going to be seen as a permanent outgoing?

@donnadrake With mainstream lenders, very unlikely.