Mortgage broker - ask me anything

hollisandchar

K_S said:

hollisandchar said:

K_S said:

@hollisandchar I only have very limited information in front of me, but given what you've said, it wouldn't be surprising if the lender wanted to dig into the specifics. Do you need the 17k bonus to be considered at 100% for the mortgage affordability?

Yes, we do. His employer are classing 45k as his gross salary but then also saying it is broken down into 28k bonus and 17k guaranteed bonus and he will never be paid any less than this. I suspect it is split down in this way for some sort of tax reason.

@hollisandchar Ok. Given that it's guaranteed and contractual then it should just be a matter of providing whatever Halifax is asking for to substantiate that.

Okay, thanks. We have provided letters from HR that confirm this, so hopefully we will hear something soon and it will have been enough

miniemma

Great idea for a thread, thank you.

My daughter is 21 next month and has been maxing out her LISA since she opened it age 18.  Even so, working in a supermarket, she will struggle to find anything worth buying as we are in the Chilterns.  We will definitely be helping her out if we can, but would love to know if we are allowed to if she is using her LISA?  And, if she was to buy a property with a partner, would we be able to 'ring fence' our contribution as belonging to her?  I am looking way into the future here  but I do like to be prepared.

K_S

miniemma said:

Great idea for a thread, thank you.

My daughter is 21 next month and has been maxing out her LISA since she opened it age 18.  Even so, working in a supermarket, she will struggle to find anything worth buying as we are in the Chilterns.  We will definitely be helping her out if we can, but would love to know if we are allowed to if she is using her LISA?  And, if she was to buy a property with a partner, would we be able to 'ring fence' our contribution as belonging to her?  I am looking way into the future here  but I do like to be prepared.

@miniemma Yes to the LISA question. And another qualified Yes to the second question. Not sure if you could call it "ring-fenced" but you could set up the ownership in a way that reflects unequal contributions to the deposit through a deed of trust at conveyancing.
https://www.theguardian.com/money/2017/oct/09/how-register-property-paid-unequal-deposits-split-50-50

joemcd

Hi there, would love to hear the thoughts of any brokers/advisers here.
My partner & I are FTB and were going to buying a new build under HTB but whilst viewing, was also shown a duplex property that exceeded the upper limit of the HTB scheme. We have spent a week or so negotiating with the developer a lower sale price and have gathered together the equivalent of 10% of the value of the property, in an effort to move forward with the property without HTB.

We read this evening though that it's tricky to get a mortgage on a new build flat with only 10% deposit. I wondered if this is the case and whether there are any exceptions? It's been a challenge for us to get the funds together for a bigger deposit now we aren't doing HTB, so it would be near impossible for us to get to 15%.

I should also mention that although our property could be described as a flat, it's in a small building made up of 6 apartments and the property we are looking at is a duplex split across two floors - which actually makes it bigger than the houses on the same development, which is why we opted for the duplex rather than the house (not knowing that lenders don't like flats!)

K_S

joemcd said:

Hi there, would love to hear the thoughts of any brokers/advisers here.
My partner & I are FTB and were going to buying a new build under HTB but whilst viewing, was also shown a duplex property that exceeded the upper limit of the HTB scheme. We have spent a week or so negotiating with the developer a lower sale price and have gathered together the equivalent of 10% of the value of the property, in an effort to move forward with the property without HTB.

We read this evening though that it's tricky to get a mortgage on a new build flat with only 10% deposit. I wondered if this is the case and whether there are any exceptions? It's been a challenge for us to get the funds together for a bigger deposit now we aren't doing HTB, so it would be near impossible for us to get to 15%.

I should also mention that although our property could be described as a flat, it's in a small building made up of 6 apartments and the property we are looking at is a duplex split across two floors - which actually makes it bigger than the houses on the same development, which is why we opted for the duplex rather than the house (not knowing that lenders don't like flats!)

@joemcd Unless I've missed some lender updates in the last few days, I'm afraid you're looking at a minimum 15% deposit for a new build flat purchase. Perhaps a few lenders will dip their toes back in the 90% new-build flat space once the 95% products are out next month. 

debtaghh

What a great thread. Is the most mortgage that you can get 4 x a single salary or 2.5 a joint? What's the minimum deposit now required? 

K_S

debtaghh said:

What a great thread. Is the most mortgage that you can get 4 x a single salary or 2.5 a joint? What's the minimum deposit now required? 

@debtaghh The most usual max loan-to-income (sole or joint) multiple is 4.5x. the distinction between sole and joint income is limited to a few old-school lenders. Depending on the rest of the scenario you may also get 4.75x or 5x. If you work in certain professions, you may even get 5.5x or 6x. It all depends on multiple factors. But for a very rough ballpark estimate, 4.5x is a reasonable assumption to make. 

Minimum deposit for a standard purchase is 10% at the moment. 5% deposit mortgages will start coming out in mid-April. With some form of family assistance (which can take a lot of different forms) there are products available with 5% or 0% deposit.

debtaghh

K_S said:

debtaghh said:

What a great thread. Is the most mortgage that you can get 4 x a single salary or 2.5 a joint? What's the minimum deposit now required? 

@debtaghh The most usual max loan-to-income (sole or joint) multiple is 4.5x. the distinction between sole and joint income is limited to a few old-school lenders. Depending on the rest of the scenario you may also get 4.75x or 5x. If you work in certain professions, you may even get 5.5x or 6x. It all depends on multiple factors. But for a very rough ballpark estimate, 4.5x is a reasonable assumption to make. 

Minimum deposit for a standard purchase is 10% at the moment. 5% deposit mortgages will start coming out in mid-April. With some form of family assistance (which can take a lot of different forms) there are products available with 5% or 0% deposit.

Thank you very much. I've always thought it was 2.5 for joint, which is why I've never included my salary ( we would have got less if that was the case) . That's very good to know, thanks again.

davetherave85

A friend of mine accidently set their Company up as limited by guarantee rather than by shares and has been taking salary and dividends. Will this cause problems? Salary and dividends were declared on their first personal tax return. Thanks!

Ab28

Hello-I wonder if you could share any insight. We’re currently applying for a mortgage through Barclays (through a broker). I’m on furlough and my husband is self employed so it’s the only lender that really suits us. He has 3 years worth of accounts that he’s provided and although he claimed SEISS last year following lockdown 1, business is back to normal. They came back last week asking for his business bank statements but he doesn’t have a business account as he just gets paid straight into his current account. Do you think this could be a problem or know what they’re looking for that they can’t see from the accounts he’s provided? Thank you for your help in advance