Mortgage broker - ask me anything

Capri84

K_S, how many folk do you come across who it’s simply impossible to find a mortgage for? Probably a lot more to it, but how many out of 10 or as a percentage would you say are not mortgageable? 

K_S

@capri84 Of the folk that get to me, it's very rare that the applicant themselves are un-mortgageable.

If you're asking about what percentage of these folk aren't able to get a mortgage that meets their requirements (LTV, interest rates, period of fix, borrowing amount, kind of property, etc) I'd say 2-3 in 10, but that's because I do a lot of adverse and high-LTV cases and a minor issue can mean the difference between getting what they need or not.

But this is based on a relatively small sample as you can imagine.

Zain61

Hey K_S, 

Thought I'd update you and say I managed to get an opportunity in an award winning brokerage to work as a mortgage admin for 3 weeks before the principal decides if I'm good to get training into becoming a mortgage advisor.

Something I wanted to ask you is how do I know mortgage advisors within a company are doing well? There's only 2 mortgage advisor (including the principal) and one insurance advisor. The mortgage advisor there has a weekend job also he does as a delivery driver which got me a little suspicious as I would think if he's doing well he wouldn't think of having a second job. He's been working there for 6 years. 

I did also get an interview scheduled for a trainee mortgage advisor role through Just Mortgages so will see how that goes and which company I'll decide to get into. 

NatNat77

How worried should I be about this situation please? Sorry, I tried to keep it short but want to provide all the relevant info. 

So, we're long term existing mortgage customers of santander with approx £100k outstanding on our current house. We're looking to port our mortgage and borrow a further £290k. Applied and had mortgage approved in Nov last year on a purchase that has since fell through, we also lost our buyer.

We found a new property (and a new buyer) in March so we got back in touch with santander, and I (naively) thought switching our offer over to a new property would be a formality, as I've had a 6k payrise since then and hubby is a director of his own construction company, which thankfully hasn't suffered through covid. Joint income now 85k approx. Hubby's wages have been consistent since company started 4.5 years ago. Previous ltv was 37% and new ltv is still less than 50%. Santander initially told me all the info we previously sent for hubby was still in date (accountants cert) and I just had to submit a recent payslip, so I wasn't overly worried.

Until Santander called. They've now asked our accountant to provide a letter confirming the company's net profit since 1 September last year to end of feb, projected earnings from 1 March to end of August, the extent of government assistance, and justification for why there was a dip in turnover from Jan to March. The company took the bounce back loan at the accountants suggestion, which they haven't used, but they'd already taken that when we applied before. What went in the bank did dip to £76k in Jan to March, from £110k in August to October (assuming that's what they looked at when processing our previous app, company has business account with them) but surely that's not enough to make the bank panic? Even if the company folded tomorrow hubby would go and work on site and earn the same he earns from the company. The dip in turnover is due in part because of Christmas shut down, losing time due to winter weather, and finishing a couple of jobs and having to wait 2 months for payment on new ones, while in the meantime they're paying out for wages/materials etc.

The accountant has agreed to provide a letter but after being in this process since last September I'm stressing now, as pretty much everything that can go wrong, has, and I'd really like some reassurance. I understand the banks are tightening up on the self employed but this seems a bit OTT to me, what does the accountant need to say to satisfy them?! Obviously they have to say it like it is but is this normal and am I worrying over nothing? If they won't lend us the full amount will they lend us some of it? This new property is £200k cheaper than the last but we're trying to borrow the same so we can use our cash to extend and improve the new house. I'd prefer not to borrow less in case they won't lend us what we need later.

Hubby's company has just won a big contract but we have nothing in writing yet, should we wait until we do before we submit the letter? Trouble is this contract will probably mean they have to use the bounce back loan (or some other loan) quite soon as they'll need it for cash flow, if they can avoid using it until we get the offer will the bank later pull our offer if they use it? And if we use it before will they just say no? 

I know no one can probably say with any certainty but it would be really good if any experienced brokers can help set my mind at rest. Many thanks xx

K_S

Zain61 said:

Hey K_S, 

Thought I'd update you and say I managed to get an opportunity in an award winning brokerage to work as a mortgage admin for 3 weeks before the principal decides if I'm good to get training into becoming a mortgage advisor.

Something I wanted to ask you is how do I know mortgage advisors within a company are doing well? There's only 2 mortgage advisor (including the principal) and one insurance advisor. The mortgage advisor there has a weekend job also he does as a delivery driver which got me a little suspicious as I would think if he's doing well he wouldn't think of having a second job. He's been working there for 6 years. 

I did also get an interview scheduled for a trainee mortgage advisor role through Just Mortgages so will see how that goes and which company I'll decide to get into. 

@zain61 Happy to hear that you have a couple of opportunities as a trainee adviser. I don't want to generalise, but a busy advisor would be unlikely to the time or inclination to do an entry level weekend job. I suspect he might be a non-CAS advisor on a largely fixed salary who (like yourself) is in training. 

K_S

NatNat77 said:

How worried should I be about this situation please? Sorry, I tried to keep it short but want to provide all the relevant info. 

So, we're long term existing mortgage customers of santander with approx £100k outstanding on our current house. We're looking to port our mortgage and borrow a further £290k. Applied and had mortgage approved in Nov last year on a purchase that has since fell through, we also lost our buyer.

We found a new property (and a new buyer) in March so we got back in touch with santander, and I (naively) thought switching our offer over to a new property would be a formality, as I've had a 6k payrise since then and hubby is a director of his own construction company, which thankfully hasn't suffered through covid. Joint income now 85k approx. Hubby's wages have been consistent since company started 4.5 years ago. Previous ltv was 37% and new ltv is still less than 50%. Santander initially told me all the info we previously sent for hubby was still in date (accountants cert) and I just had to submit a recent payslip, so I wasn't overly worried.

Until Santander called. They've now asked our accountant to provide a letter confirming the company's net profit since 1 September last year to end of feb, projected earnings from 1 March to end of August, the extent of government assistance, and justification for why there was a dip in turnover from Jan to March. The company took the bounce back loan at the accountants suggestion, which they haven't used, but they'd already taken that when we applied before. What went in the bank did dip to £76k in Jan to March, from £110k in August to October (assuming that's what they looked at when processing our previous app, company has business account with them) but surely that's not enough to make the bank panic? Even if the company folded tomorrow hubby would go and work on site and earn the same he earns from the company. The dip in turnover is due in part because of Christmas shut down, losing time due to winter weather, and finishing a couple of jobs and having to wait 2 months for payment on new ones, while in the meantime they're paying out for wages/materials etc.

The accountant has agreed to provide a letter but after being in this process since last September I'm stressing now, as pretty much everything that can go wrong, has, and I'd really like some reassurance. I understand the banks are tightening up on the self employed but this seems a bit OTT to me, what does the accountant need to say to satisfy them?! Obviously they have to say it like it is but is this normal and am I worrying over nothing? If they won't lend us the full amount will they lend us some of it? This new property is £200k cheaper than the last but we're trying to borrow the same so we can use our cash to extend and improve the new house. I'd prefer not to borrow less in case they won't lend us what we need later.

Hubby's company has just won a big contract but we have nothing in writing yet, should we wait until we do before we submit the letter? Trouble is this contract will probably mean they have to use the bounce back loan (or some other loan) quite soon as they'll need it for cash flow, if they can avoid using it until we get the offer will the bank later pull our offer if they use it? And if we use it before will they just say no? 

I know no one can probably say with any certainty but it would be really good if any experienced brokers can help set my mind at rest. Many thanks xx

@natnat77 Apologies, I only skim read your post as there's too much info to digest. But generally speaking, Santander has become a law unto its own with regard to SE applicants post-Covid so there's no telling what they may ask for unfortunately.

Gavin83

Hi. I’ve got a couple of questions I’d like to ask if that’s OK. Apologies if they’ve already been answered but this is far too long a thread to look through!

1) Is there any general advice you’d give on how to run your accounts on the lead up to application? Is it best to spend on credit cards and pay off every month or just leave them empty? Are “silly references” from friends sending money a red flag? Slipping into an arranged overdraft? Spending on certain things, such a gambling or takeaways?

2) Obviously like everyone you’ve seen the market get silly in recent times. I expect well over asking price offers are commonplace at the moment. Have you seen any signs of this tailing off with the stamp duty holiday and furlough coming to an end soon? Is there a lot of down valuations happening with the lenders?

K_S

@Gavin83

1. Unless you intend to absolutely borrow at the max limit of your affordablity, using a cc for regular expenditure and paying it off in full every month should not impact your chances. Sensible use of an OD facility within arranged limits should again no be an issue on its own. Discretionary expenditure like takeaways should have no significant impact. Gambling transactions would be best to keep it minimal and off your main current account to maximise your potential lender pool.

2. Not seeing a lot of down-valuations but I'm a one person outfit so it's a small sample size.

sk101

Hi 
Just after a bit of advice please. We have had an offer accepted on a house (no EA ). Is it best to hold off on the mortgage App until vendor has found somewhere to buy. Straightforward application (salaried earnings etc). Vendor is happy for us to wait. 

RyanT1992

Hi, this may be a more general mortgage question, but hopefully you can point me in right direction if you don’t know the answer 😊

If we were to get a mortgage at the top of our salary multiple, but then also wanted to borrow extra to do up the house, what’s the best way of doing that?

Are there lenders that allow you to borrow extra on top of a mortgage, or would it always be a separate loan (probably from a separate company)?

What I’m basically asking, is what the chances are of a first time buyer being able to buy a doer upper & be able to get that work done at the start using a long-term, low interest loan that sits alongside the mortgage and doesn’t kill us financially. Rather than having to wait years to save up to afford it/have enough equity to re-mortgage.

We’re weighing up what sort of property to go for, eg project vs bit of work vs no work

Cheers in advance!