Mortgage broker - ask me anything

K_S

Dee_100 said:

Hi,

I'm hoping someone can help me / offer guidance. I have been in my current full time job for the last 15 years. I am aiming to buy my first house hopefully by the end of this year. However I am also looking to move jobs as my current job has no more career progression, no pay rises, low morale etc. 

Given that I have a pretty good employment history with my existing employer is it worth applying for a mortgage whilst I am in my current job and then moving jobs 6-12 months later once I have purchased a house, or moving jobs first and then applying for a mortgage some time after.

My understanding is that the longer you have been with your existing employer the better your chances of getting accepted for a mortgage and getting a good deal. I have seen some good job opportunities online though not sure if moving jobs before applying for a mortgage is the best move?

Any advice would be much appreciated.

Thanks!

@dee_100 Based on the limited info in your post, if you were to move on to a new PAYE job on a permanent contract, with no more than a reasonably short gap between them, that on its own is unlikely to stop you from accessing mainstream mortgage rates.

loroc28

Hello, I would be really grateful for some advice. 
My husband and I would like to borrow extra money on our mortgage to do an extension but have been told by our lender (Natwest) that because he has taken the SEISS grant they will not lend to us.  They said they wouldn't take it into account as income which i understand but the fact he has taken them means they won't consider lending more at all, even though he has been earning money, just not as much as he would have done if he hadn't had to have so much time off work to look after our children as they weren't at school and I was working as i'm a key worker. 
We are 2 years into a 5 year fixed rate and it would be expensive to buy our way out of that and remortgage with a different lender. 
We wondered about taking out a second mortgage or secured loan with a different provider - we are not sure exactly what the difference is?  Is it a good option? Are there any better options?  I don't earn enough to borrow the extra on the mortgage on my earnings alone.
Also, I haven't heard of any of the companies offering second mortgages when I do a quick google search - is this anything to worry about? 

Current value of house (according to Natwest from data they have) - £265k
Current mortgage - £128k
Amount we want to borrow - £50k

Average profit from self employed earnings for last 3 years £18k (not had this years accounts yet but although he has worked less hours due to time off work for childcare he has been charging more due to demand so income shouldn't be too down and now the children are back at school he is working normal hours). 

Employed income £30k 

2 credit cards with total - £2000 debt, both on 0% interest and we could pay them off with money saved if we really had to. 

£184 pcm on car finance. 

No other debt. 

2 dependant children. 

Any suggestions would be really helpful!  We live in a tiny bungalow and really need it to be bigger! We had no idea taking out the self employed grant would be a problem but we needed it as had no childcare. 

Thank you 

K_S

@loroc I've not done the numbers but your options are

1. an unsecured personal loan. It'll probably be a bit difficult to get it up to 50k though.

2. what's called a second-charge mortgage/loan. These are significantly more expensive (considering fees plus interest) than standard resi mortgages and secired against your home. And you may struggle to take it above 60-65% LTV so a max of around 40-45k or so.

3. pay the ERC and remortgage with capital raise to a new lender. Based on what you have said, there should be options as long as his business is up and running again.

Which of 2 and 3 are cheaper for you will depend on the numbers. What's the ERC you're looking at if you were to remortgage away?

loroc28

K_S 
That is so kind of you to work this out - thank you!
I'm not sure, we looked at it but didn't really understand it and got carried away by the thought of the idea of a second mortgage.  I will go and look now to see what it says. 

loroc28

@K_S
I thought I replied just now but it seems to have disappeared - sorry if I end up posting twice. 
I have now found a letter which says ERC is £6200, this was dated 29th April 2020 so presumably we will get another letter this year with hopefully a slightly lower figure as we are one year further in. 
When i looked before I didn't see the letter just tried to work it out and got confused and gave up. I am now thinking we would be better doing this, paying the charge and remortgaging with a different lender and hopefully getting a good deal, rather than a high rate with a second mortgage. 

Thank you so much for taking the time to reply, it's so confusing and hard to know what to do. 

NiaBrown

FTBs here aged 50 (me) and 58 (husband). We've had an offer accepted and our broker reckons TSB will be our best chance with an 85% LTV. I'm very worried though, as I've realised that due to a misunderstanding my broker reckons I'm in permanent work and I'm not. Obviously I'll be telling him on Monday, but I'm worried that the temporary contract nature of my job will be a problem. I had a drastic career change 4 years back and I'm now an academic researcher, Although I've worked for the same university for 3 years solid now on a FT basis, my actual contracts run from anything from 6 months to 2 years because I'm paid via research funding that we win.

If I can prove via my pay slips that "something always turns up" and that I've worked full time without interruption for 3 years, is that likely to mitigate the temporary nature of my contracts?  I'm hoping to hear about a permanent job this week that I applied and interviewed for, but worried it may be too late.

K_S

loroc28 said:

K_S 
That is so kind of you to work this out - thank you!
I'm not sure, we looked at it but didn't really understand it and got carried away by the thought of the idea of a second mortgage.  I will go and look now to see what it says. 

@loroc28 I'll give an example. Please keep in mind that these are very very crude numbers, just for the purposes of an illustration.

Natwest 5 year fixes usually (you'll need to check your mortgage offer or latest mortgage statement to be sure) have a 4% ERC in year 2. Assuming you are in year 2, the ERC would be around £5,100 plus remortgaging costs around £6,000 in all.

A second charge mortgage for 50k would have an interest rate of about 2.5-3% more than a mainstream resi mortgage. So, for 50k, that equates to about £1,300-1,400 of extra interest a year.

simone82

Evening all, hope someone can help

My partner has just started a new role where he does shifts, gets paid weekly and each day of the week is paid at a different rate depending on the day start time of shift (eg a mon morning would be a different rate to a sunday afternoon or evening)

How do I reflect this when trying to work out our total income as I cant predict his annual salary as he gets paid differently each week?

Also if I have a lifetime Isa aswell as a help to buy isa will I be charged for taking the money out of the H2B isa when it comes to buying, as we will use the LISA as part of the mortgage process and just take out the H2B and use towards as a seperate amount?

Thank you

loroc28

@K_S
Thank you, yes, def a very expensive option. 

K_S

NiaBrown said:

FTBs here aged 50 (me) and 58 (husband). We've had an offer accepted and our broker reckons TSB will be our best chance with an 85% LTV. I'm very worried though, as I've realised that due to a misunderstanding my broker reckons I'm in permanent work and I'm not. Obviously I'll be telling him on Monday, but I'm worried that the temporary contract nature of my job will be a problem. I had a drastic career change 4 years back and I'm now an academic researcher, Although I've worked for the same university for 3 years solid now on a FT basis, my actual contracts run from anything from 6 months to 2 years because I'm paid via research funding that we win.

If I can prove via my pay slips that "something always turns up" and that I've worked full time without interruption for 3 years, is that likely to mitigate the temporary nature of my contracts?  I'm hoping to hear about a permanent job this week that I applied and interviewed for, but worried it may be too late.

@niabrown If you work on FTCs, this is what you need to meet for TSB

- 12 months contract history

- no gaps exceeding 6 weeks

- at least 3 months remaining

- current contract ending in less than 3 months, a future contract of minimum 3 months will be required