Mortgage broker - ask me anything

Capri84

KS, on that calculator above, what sort of items are  to go in the ‘other monthly commitments’ box?

mobile phones, sky tv, broadband... that sort of stuff?

Dave2_2

K_S said:

Dave2_2 said:

Hi there,
My wife and I have just had an offer accepted on a property having sold ours earlier this week.  We currently have a mortgage with Barclays so have looked to them first for a new mortgage because we could port it and avoid early repayment charges.
Barclays' website gives us an Agreement in Principle amount of £310k but we need to borrow £327k.  We know that this is perfectly affordable because we have been overpaying our mortgage for years by the equivalent amount.  Is there any point going through a detailed application with Barclays to see if they will lend the amount we require or will they automatically say no?  We can borrow the amount with other providers, such as Santander, so that is our backup plan.
Thanks,
Dave

@dave2_2 Lender affordability is usually black and white. I don't know whether or not you keyed in the DIP form correctly so it's hard to say whether the £310k is indeed the maximum or not. This is the Barclays affordability calc https://resources.barclays.co.uk/mortgage-calculators/residential-affordability have a nosey and see what it returns.

Brilliant - thank you.  It looks like we need £10-15k more than they will lend us on that basis so we'll look elsewhere.  Thank you for replying so quickly!

Capri84

Do all mortgage providers apply the same ‘stress test’ that Barclays do? Our mortgage payments should be around the £950-1050 range but they stress test them up to £1600

K_S

@capri84 Different lenders may have small/large differences in the way they calculate affordablity. It's all pretty transparent though, their affordability calculators show what they do. But of course it's only as good as the data you put in.

Other monthly commitments - anything than you can't cancel and doesn't fall into any of the categories above. Usually that doesn't include phone, broadband, etc.

[Deleted User]

other monthly commitments are usually:

Child Maintenance
Childcare costs
Service Charges
Ground Rent
Payslip deductions that cant be cancelled (childcare vouchers,  car lease for nhs is quite common)
Student Loan sometimes goes in here

Capri84

My MA asked for a full breakdown of all monthly spending including phone, broadband, car insurance etc. Is that something banks use/look at then? Or do they look only at loans/credit and that sort? 

Kendowned

Does a partially settled debt look better on your credit file than maintaining DMP payments? 

K_S

Kendowned said:

Does a partially settled debt look better on your credit file than maintaining DMP payments? 

@kendowned It's hard to answer that question in isolation. Very very generally speaking, it should be better to have it settled (S) than carry on a DMP for that one debt.

[Deleted User]

Hi guys 

I’m currently waiting on a valuation for a new build property I have reserved. I can’t stop stressing that it is going to be undervalued. Does this happen a lot with new builds!?? Probably me overthinking again haha!! Thanks  

Kendowned

@K_S Thanks! I don't know if it would help but I'm looking to try and get a mortgage next year after all 7 of my defaults are over 2 years old. I understand that only a few specialist lenders will probably look at me and interest rates will be high to start with.

I could probably settle 3 of these accounts (i am confident they would settle for 50%-70% of the owed amount in the next month) so they would be settled for over a year when I apply for the mortgage but only partially settled, would this likely be worth it? if not I would rather keep the money towards a deposit and keep paying the DMP.