Mortgage broker - ask me anything

K_S

Terrace said:

Is income for affordability taken pre tax or post tax? 

@terrace PAYE income is taken gross / before-tax.

Fkhan95

Hi,

Quick question - can stamp duty be added to a mortgage as long as the stated ltv isn’t exceeded? 

Thanks

K_S

Fkhan95 said:

Hi,

Quick question - can stamp duty be added to a mortgage as long as the stated ltv isn’t exceeded? 

Thanks

@Fkhan95

K_S said:

With any lender, to add the cost of stamp duty to your loan, you would need to request a higher borrowing amount, and then use the 'extra' deposit money to pay the stamp duty.

So if originally - you were looking to buy a £600k home with a £510k mortgage (85% LTV), £90k deposit and a stamp duty bill of £20k. 

If you wanted to add the cost of stamp duty to the loan for the same house - you would now require a mortgage of £530k (88% LTV), put £70k of your cash towards the deposit and the ‘extra’ £20k of your cash deposit towards stamp duty. I hope that makes sense.

blueskies9494

Hi! 

My partner and I are desperate to buy a house after renting together for nearly a year and hating how much it costs. He’s a first time buyer but I owned a property with my ex and had a mortgage at 24. I’ve obviously since sold that property. 

He has a great credit report and no adverse history and our joint annual income is around £42k. We also have approx 20% deposit to mortgage ratio based on purchasing a property of no more than £240k.

Issue is I now have a few defaults on my credit file which has taken my score down to 592 out of 1000 on CheckMyFile. I have a ‘1’ with Shop Direct Finance (Very account which is now closed) from 2019, just a month late payment. But the worst is a ‘3’ showing for my old Vodafone account which was an accidental direct debit cancellation resulting in a late payment fee of £16.00 which I have now paid but vodafone refuse to take off my file. 

I have a Credit Ladder account to record my rent payments which are all perfect and I’ve never had any defaults with mortgage payments, bills or my car finance. 

Just wondering how long we should leave it before applying for a mortgage? We are hoping to buy early next year, which will be a year without any defaults (I am doing my best to make sure there won’t be any more and have zero debt and no credit cards etc.)

Also, how likely is it we will be rejected? 

Reason I ask is we tried to get a DIP in early February this year and the broker helping us couldn’t find a single lender who would lend to us when all I had was the one default from 2019, and it’s completely knocked my confidence and made me worry that we won’t be accepted by a lender for years. 

Any help will be much appreciated! 

K_S

blueskies9494 said:

Hi! 

My partner and I are desperate to buy a house after renting together for nearly a year and hating how much it costs. He’s a first time buyer but I owned a property with my ex and had a mortgage at 24. I’ve obviously since sold that property. 

He has a great credit report and no adverse history and our joint annual income is around £42k. We also have approx 20% deposit to mortgage ratio based on purchasing a property of no more than £240k.

Issue is I now have a few defaults on my credit file which has taken my score down to 592 out of 1000 on CheckMyFile. I have a ‘1’ with Shop Direct Finance (Very account which is now closed) from 2019, just a month late payment. But the worst is a ‘3’ showing for my old Vodafone account which was an accidental direct debit cancellation resulting in a late payment fee of £16.00 which I have now paid but vodafone refuse to take off my file. 

I have a Credit Ladder account to record my rent payments which are all perfect and I’ve never had any defaults with mortgage payments, bills or my car finance. 

Just wondering how long we should leave it before applying for a mortgage? We are hoping to buy early next year, which will be a year without any defaults (I am doing my best to make sure there won’t be any more and have zero debt and no credit cards etc.)

Also, how likely is it we will be rejected? 

Reason I ask is we tried to get a DIP in early February this year and the broker helping us couldn’t find a single lender who would lend to us when all I had was the one default from 2019, and it’s completely knocked my confidence and made me worry that we won’t be accepted by a lender for years. 

Any help will be much appreciated! 

@blueskies9494 How many defaults/CCJs do you have, what dates (MM/YY) were they registered, what amounts were they registered for?

mellerdsmrs

I've been offered a time limited opportunity to buy the house I'm currently renting. 
 
I got married at the end of last year and due to lockdowns I haven't yet got around to changing everything over to my married name. My bank, driving license, doctors etc is all in my maiden name. The only place I have done this so far is at work. So my wage slips are in my married name. 

I was intending on doing the mortgage application in my name only. My husband doesn't work and has been the one who stayed home to bring up our kids. When we went through the agreement in principle with the bank it actually reduced the amount I borrow with him on it. So they put it through in my name only listing him as a dependant. As all my id is in my maiden name the agreement in principle was done under that name.  However it suddenly occurred to me that my wage slips being in my married name may cause me some issues.

Would my marriage certificate suffice.as evidence?

K_S

mellerdsmrs said:

I've been offered a time limited opportunity to buy the house I'm currently renting. 
 
I got married at the end of last year and due to lockdowns I haven't yet got around to changing everything over to my married name. My bank, driving license, doctors etc is all in my maiden name. The only place I have done this so far is at work. So my wage slips are in my married name. 

I was intending on doing the mortgage application in my name only. My husband doesn't work and has been the one who stayed home to bring up our kids. When we went through the agreement in principle with the bank it actually reduced the amount I borrow with him on it. So they put it through in my name only listing him as a dependant. As all my id is in my maiden name the agreement in principle was done under that name.  However it suddenly occurred to me that my wage slips being in my married name may cause me some issues.

Would my marriage certificate suffice.as evidence?

@mellerdrmrs It shouldn't be an issue, just flag it with your broker/adviser upfront so the application is keyed in appropriately and they can let you what evidence is needed.

With your husband not being on the mortgage, if he is contributing to the deposit, if you are going direct, do make sure the lender is ok with that. 

mellerdsmrs

K_S said:

mellerdsmrs said:

I've been offered a time limited opportunity to buy the house I'm currently renting. 
 
I got married at the end of last year and due to lockdowns I haven't yet got around to changing everything over to my married name. My bank, driving license, doctors etc is all in my maiden name. The only place I have done this so far is at work. So my wage slips are in my married name. 

I was intending on doing the mortgage application in my name only. My husband doesn't work and has been the one who stayed home to bring up our kids. When we went through the agreement in principle with the bank it actually reduced the amount I borrow with him on it. So they put it through in my name only listing him as a dependant. As all my id is in my maiden name the agreement in principle was done under that name.  However it suddenly occurred to me that my wage slips being in my married name may cause me some issues.

Would my marriage certificate suffice.as evidence?

@mellerdrmrs It shouldn't be an issue, just flag it with your broker/adviser upfront so the application is keyed in appropriately and they can let you what evidence is needed.

With your husband not being on the mortgage, if he is contributing to the deposit, if you are going direct, do make sure the lender is ok with that. 

Thank you for taking the time to reply. No my husband wouldn't be contributing the deposit. My deposit is being gifted to me by my family. We went through the agreement in principle with the bank themselves and made them aware of this fact. So hopefully it won't cause issues when we do the actually application. 

sharp910sh

Hi I am looking to buy somewhere soon as a First Time Buyer. I am currently savings for the deposit, though I believe I will be able to save say 15% deposit by the time I complete (assuming I get an offer on a place tomorrow). I currently have 14.5% deposit and will be saving for the extras such as stamp duty, survey, mortgage fee and conveyancing. I will be able to save the full amount in say 3 months time. Is this acceptable? Or will I need to have proof of the full deposit and fees, etc when I start the mortgage process?

blueskies9494

K_S said:

blueskies9494 said:

Hi! 

My partner and I are desperate to buy a house after renting together for nearly a year and hating how much it costs. He’s a first time buyer but I owned a property with my ex and had a mortgage at 24. I’ve obviously since sold that property. 

He has a great credit report and no adverse history and our joint annual income is around £42k. We also have approx 20% deposit to mortgage ratio based on purchasing a property of no more than £240k.

Issue is I now have a few defaults on my credit file which has taken my score down to 592 out of 1000 on CheckMyFile. I have a ‘1’ with Shop Direct Finance (Very account which is now closed) from 2019, just a month late payment. But the worst is a ‘3’ showing for my old Vodafone account which was an accidental direct debit cancellation resulting in a late payment fee of £16.00 which I have now paid but vodafone refuse to take off my file. 

I have a Credit Ladder account to record my rent payments which are all perfect and I’ve never had any defaults with mortgage payments, bills or my car finance. 

Just wondering how long we should leave it before applying for a mortgage? We are hoping to buy early next year, which will be a year without any defaults (I am doing my best to make sure there won’t be any more and have zero debt and no credit cards etc.)

Also, how likely is it we will be rejected? 

Reason I ask is we tried to get a DIP in early February this year and the broker helping us couldn’t find a single lender who would lend to us when all I had was the one default from 2019, and it’s completely knocked my confidence and made me worry that we won’t be accepted by a lender for years. 

Any help will be much appreciated! 

@blueskies9494 How many defaults/CCJs do you have, what dates (MM/YY) were they registered, what amounts were they registered for?

I don’t have any CCJs and nothing has gone to any debt agencies or anything big or serious. The ‘1’ for a month late Very payment was from November 2019 - £22, and for Vodafone, there’s a ‘2’ in December 2020, a ‘3’ in January 2021 and a ‘3’ in February 2021, all just for the amount of £16. I paid all of them as soon as I’d realised my error and the Very account is now closed and I no longer have an account with Vodafone as this was relating to the very last payment of my contract. My credit file has a ‘3’ next to ‘adverse accounts’ on the file overall. 

Other than that, every other payment I have made or credit I have had has been perfectly fine, including a mortgage I had before, bills and my monthly car finance.