Mortgage broker - ask me anything

sk101

K_S said:

sk101 said:

K_S said:

sk101 said:

Hi 
Would love some advice please. Combined income of 60,000. No loans or credit cards. Aged 47 and 44. House Price 610,000. Deposit 370,000. Borrowing of 240,000 over 20 years ideally on a lifetime tracker (First Direct)? Would this amount be agreed? How much could we realistically borrow based on these terms?  How long would an application/mortgage take to sort? Would we be best off going with a broker (whole of market) to push the process along? I would be very grateful for your advice and expertise. Thanks

@sk101 Can't speak for FD as they're a direct only lender. Based on the limited info in your post and assuming the 60k is basic PAYE income
Yes this is correct. 

- borrowing of 240-300k should be achievable at mainstream rates

- timelines depend on the specific lender. But assuming a straightforward scenario, with PAYE income most of my cases are coming through inside 2 weeks from app to offer for properties that need physical valuations.

- if you're set on FD, you'll need to go direct as they don't offer intermediary products. But if you're not tied to FD and want a quick turnaround, I'd recommend using a whole of market broker.

Yes, the income is basic PAYE income. 24,000 + 34,000. I mention FD because I don't seem to be able to find many lifetimetrackers around. Do you know of others with around the same rate approx 1.99? We have our existing mortgage with HSBC on a lifetime tracker but they will only lend based on the current term (less than 6 years) and only seem to offer a 2 year lifetime tracker. So, the figures are doable then? It's so much more than we've ever thought of borrowing so its an unknown for us. 

@sk101

- I don't think FD has any competition on that product.

- Not sure how FD calculates affordablity but 4.5-4.75x borrowing should be possible with other mainstream lenders. FD is unlikely to be too far off. You only need a bit than 4x, I would assume it's fine.

So, I rang FD today and they have said that an online application (which is the only way that you can confirm the lifetime tracker rate) will take 6 weeks from the upload of documents. That sounds like a long time to wait especially if there is a problem. Are there any products out there around the 1.99 mark that don't have tie ins or redemption penalties or has everything gone the way of the short-term fix? Out buyers are using Halifax and their valuation has been completed in a couple of days, hopefully the rest of the process might be on a similiar timescale? 

K_S

sk101 said:

K_S said:

sk101 said:

K_S said:

sk101 said:

Hi 
Would love some advice please. Combined income of 60,000. No loans or credit cards. Aged 47 and 44. House Price 610,000. Deposit 370,000. Borrowing of 240,000 over 20 years ideally on a lifetime tracker (First Direct)? Would this amount be agreed? How much could we realistically borrow based on these terms?  How long would an application/mortgage take to sort? Would we be best off going with a broker (whole of market) to push the process along? I would be very grateful for your advice and expertise. Thanks

@sk101 Can't speak for FD as they're a direct only lender. Based on the limited info in your post and assuming the 60k is basic PAYE income
Yes this is correct. 

- borrowing of 240-300k should be achievable at mainstream rates

- timelines depend on the specific lender. But assuming a straightforward scenario, with PAYE income most of my cases are coming through inside 2 weeks from app to offer for properties that need physical valuations.

- if you're set on FD, you'll need to go direct as they don't offer intermediary products. But if you're not tied to FD and want a quick turnaround, I'd recommend using a whole of market broker.

Yes, the income is basic PAYE income. 24,000 + 34,000. I mention FD because I don't seem to be able to find many lifetimetrackers around. Do you know of others with around the same rate approx 1.99? We have our existing mortgage with HSBC on a lifetime tracker but they will only lend based on the current term (less than 6 years) and only seem to offer a 2 year lifetime tracker. So, the figures are doable then? It's so much more than we've ever thought of borrowing so its an unknown for us. 

@sk101

- I don't think FD has any competition on that product.

- Not sure how FD calculates affordablity but 4.5-4.75x borrowing should be possible with other mainstream lenders. FD is unlikely to be too far off. You only need a bit than 4x, I would assume it's fine.

So, I rang FD today and they have said that an online application (which is the only way that you can confirm the lifetime tracker rate) will take 6 weeks from the upload of documents. That sounds like a long time to wait especially if there is a problem. Are there any products out there around the 1.99 mark that don't have tie ins or redemption penalties or has everything gone the way of the short-term fix? Out buyers are using Halifax and their valuation has been completed in a couple of days, hopefully the rest of the process might be on a similiar timescale? 

@sk101 Apologies. As a regulated mortgage adviser, I have to be very careful to not unknowingly veer into advice, which would be on the basis of little to no information.

The MSE mortgage finder tool is a whole of market sourcing tool (the MortgageBrain backend is the same as used by a lot of brokers) so you should be able to get answer to the rates in the market from that using the approrpaite filters. https://www.moneysavingexpert.com/mortgages/best-buys/

With regard to timelines, 6 weeks is indeed ultra long for straightforward applications, par for the course if any self employed income or other complexities are involved.

peppapigsnan

Hi, what would your advice be for newly retired couple with home with 135k, mortgage of 12k, secured loan 16k and debt of 16k. Sell and down sized or consider RIO to clear current mortgage and debt to stay in home?

BeelzeBug

Hello, I'm having a nightmare with Equifax not recognising that I am on the electoral roll (since 2019!). Experian and TransUnion have me down as registered but dealing with Equifax is like running into a brick wall. How much do you think this will hinder a mortgage application? I've got a 22% deposit, no defaults or anything else that should be seen as a red flag.  

Kirstydoug

Hi I have a poor credit score and a 3 satisfied closed accounts on my credit file and  total of £1800 in debt with overdraft and credit hopefully clear this next few months me and my partner are looking to get a mortgage  next year if possible he’s self employed has a fair credit score any advice to better our chance of getting a mortgage 

K_S

Kirstydoug said:

Hi I have a poor credit score and a 3 satisfied closed accounts on my credit file and  total of £1800 in debt with overdraft and credit hopefully clear this next few months me and my partner are looking to get a mortgage  next year if possible he’s self employed has a fair credit score any advice to better our chance of getting a mortgage 

@KirstydougTo prep for next year to maximise your chances -

- get your partner to use a separate bank account for his business, that helps a lot for both placing and underwriting the case

- keep your credit history as clean as possible: no missed/late payments, etc

- try to maintain good account conduct: avoid consistent and sustained use of OD, don't have an returned direct debits, etc

- save up for as much of a deposit as you can. I can't stress this enough, with adverse on your credit history, LTV has a huge impact on your chances.

Good luck!

K_S

BeelzeBug said:

Hello, I'm having a nightmare with Equifax not recognising that I am on the electoral roll (since 2019!). Experian and TransUnion have me down as registered but dealing with Equifax is like running into a brick wall. How much do you think this will hinder a mortgage application? I've got a 22% deposit, no defaults or anything else that should be seen as a red flag.  

@beelzebug I recently had a similar case where their current flat address was shown with the wrong letter (so 100A instead of 100C) in Equifax leading to all sorts of issues with getting a DIP through with the preferred lender. They eventually sorted it out but at the time we went ahead with a lender that uses Experian to get it over the line without having to wait for Equifax. Just to be clear, I can't say that your problem is the same.

Have you had any issues - like unexplicably declined credit card applications, current account applications, etc?

Based on what you've said, it shouldn't on its own stop you from getting a mortgage but it's best to get it sorted if you're not in a hurry. If you do use a broker, do make sure you give them a copy of the credit file so they can take that into account.

Housetohouse

K_S said:

Housetohouse said:

K_S said:

@housetohouse It may be doable but it's definitely tricky

- is there any kind of written agreement on the informal child maintenance of £600 pm? When is it scheduled to end?
- what exact profit figure does your 2019/2020 SA302 show? What do you expect it to show for 2020/21?
- what's the annual pension income going to be from 60?
- what's your trade and how long have you been doing it

Thank you for responding.
No written agreement, we are amicable and my dc dad has paid every month for 15 years.All shown on bank statements,no CSA involved. He will stop when DC is 21 yrs old.
My income for 2019/2020 was £7557 profit.
Roughly for 2020/21 between £10 - 11,000 accountant has estimated,due to be finalised soon.
I sell on ebay as a sole trader.
I have been running since April 2017.
My annual pension will be if I am honest no idea as I cannot fathom it. I do download the statements every year.
However my accountant has some one on her books that has offered to go through it with me.

@housetohouse

- The SE income *should* be considered based on what you've said.

- The CTC is a tough one as your child is 15+ and most lenders will ignore CTC beyond a certain age

- The lack of a formal agreement for the child maintenance will rule out most lenders. However, as long as you can evidence a steady track record, there should be lenders who may consider it. The issue will be how they assess sustainability.

All said and done it's a relatively small mortgage at a low LTV so should be placeable with the right lender over a 15 year term who will tick 2 of the 3 boxes above. If the pension income is decent, your chances should improve further. Imho, definitely one for a broker.

K_S said:

Housetohouse said:

K_S said:

@housetohouse It may be doable but it's definitely tricky

- is there any kind of written agreement on the informal child maintenance of £600 pm? When is it scheduled to end?
- what exact profit figure does your 2019/2020 SA302 show? What do you expect it to show for 2020/21?
- what's the annual pension income going to be from 60?
- what's your trade and how long have you been doing it

Thank you for responding.
No written agreement, we are amicable and my dc dad has paid every month for 15 years.All shown on bank statements,no CSA involved. He will stop when DC is 21 yrs old.
My income for 2019/2020 was £7557 profit.
Roughly for 2020/21 between £10 - 11,000 accountant has estimated,due to be finalised soon.
I sell on ebay as a sole trader.
I have been running since April 2017.
My annual pension will be if I am honest no idea as I cannot fathom it. I do download the statements every year.
However my accountant has some one on her books that has offered to go through it with me.

@housetohouse

- The SE income *should* be considered based on what you've said.

- The CTC is a tough one as your child is 15+ and most lenders will ignore CTC beyond a certain age

- The lack of a formal agreement for the child maintenance will rule out most lenders. However, as long as you can evidence a steady track record, there should be lenders who may consider it. The issue will be how they assess sustainability.

All said and done it's a relatively small mortgage at a low LTV so should be placeable with the right lender over a 15 year term who will tick 2 of the 3 boxes above. If the pension income is decent, your chances should improve further. Imho, definitely one for a broker.

Hi Again, 
I have contacted a broker who is struggling to get me a mortgage,just wondered if you could add anything.
As you previously said working and tax credits and maintenance discounted due to sons age.
My business has been impacted by covid, I have taken SEISS grants and local lockdown grants due to being in a strict lockdown area.
My profits have nose dived wiith the last 3 months being the worst ever, I was never a high earner though but still.
Broker is stating Santander are using last 3 months statement overview to gauge affordability,oh man this is terrible for me.
Whilst they are looking at last tax returns, the key part is the last 3 statements and they are declining clients applications as they do not feel they are supporting the tax returns.
Broker also said they will not see my pension as a positive either as I am not actually claiming it yet.
I was sort of half hoping they would see it as a sign I would have some money when I am 60??
Looks like if I take standard lump sum at 60 it would be £24,000 with a pension of £8,197.
If I took max lump sum at 60 it would be £43,000 and pension £6,500.
Would anybody view that as a positive for a mortgage.
I am really going to struggle with the last 3 months bank statements, I am so worried I will not obtain a mortgage now.
I sold my house now, I have approx £160,000 in cash as a deposit and have been looking at houses £200,000.
Any chance at all do you think? Thank you in advance.

K_S

@housetohouse Referring to what you've said "My profits have nose dived wiith the last 3 months being the worst ever", every lender is going to look at the most recent business income when assessing a self-employed application. Unfortunately, you will need to be able to show a return to normal trading before a lender will consider your self-employed income.

My reference to the future pension was that it may come into play if you need a longer term to meet affordability requirements or perhaps qualify for a short term mortgage to be paid off from the pension lump sum.

I don't know the details so can't say for sure that you absolutely cannot get a circa 35k mortgage but it certainly looks like a complex scenario.

Capri84

K_S said:

Kirstydoug said:

Hi I have a poor credit score and a 3 satisfied closed accounts on my credit file and  total of £1800 in debt with overdraft and credit hopefully clear this next few months me and my partner are looking to get a mortgage  next year if possible he’s self employed has a fair credit score any advice to better our chance of getting a mortgage 

@KirstydougTo prep for next year to maximise your chances -

- get your partner to use a separate bank account for his business, that helps a lot for both placing and underwriting the case

- keep your credit history as clean as possible: no missed/late payments, etc

- try to maintain good account conduct: avoid consistent and sustained use of OD, don't have an returned direct debits, etc

- save up for as much of a deposit as you can. I can't stress this enough, with adverse on your credit history, LTV has a huge impact on your chances.

Good luck!

Would being between 0-£100 in arranged OD each month negatively impact a mortgage application?