Mortgage broker - ask me anything

CLJ2986

Hey, I'm having a slight panic and hoping you'll be able to tell me I'm worrying over nothing... we got our mortgage offer through 2 weeks ago, its with a specialist lender and 90%ltv. I've recently changed my car insurance over as my renewal was due and it was silly money so got it much cheaper. However the new insurance is now showing on my credit file and I know the score is meaningless but its dropped, will this affect our offer if they do a 2nd credit check or will they ignore the new account as its clearly insurance? Thanks! 

K_S

CLJ2986 said:

Hey, I'm having a slight panic and hoping you'll be able to tell me I'm worrying over nothing... we got our mortgage offer through 2 weeks ago, its with a specialist lender and 90%ltv. I've recently changed my car insurance over as my renewal was due and it was silly money so got it much cheaper. However the new insurance is now showing on my credit file and I know the score is meaningless but its dropped, will this affect our offer if they do a 2nd credit check or will they ignore the new account as its clearly insurance? Thanks! 

@clj2986 It's quite normal for applicants to do what you did and it's never led to an offer being pulled in my experience.

MJathome

K_S said:

MJathome said:

Thanks for all the free advice on here, I did search but couldn't find an answer to my question.
We are lucky to own our current home outright. We need a mortgage to buy a second home in Scotland.  We plan to sell our current home after a year or two, pay off the mortgage and move permanently to Scotland.  We have cash savings so only need a mortgage for 55-60% of the new home value.  Despite that, our current pensions (at 60 years old) are insufficient for a mortgage of that size.
Question is, are there specialist mortgages (without early exit penalties) that would take account of our owned home to allow us to borrow more than normally allowed?  The value of our current home and savings are 30% more than the value of the new home so the risk seems low for the lender.
Thanks in advance.

@mjathome To answer your question - no, lenders will not usually take into account equity in a second property to meet affordability requirements.

The usual solution to your kind of scenario is an I/O mortgage on the new property with a lender who will consider sale of the existing mortgage free property as a repayment vehicle. Whether that may be an option available for you or not depends on the specific numbers and the rest of the scenario.

Thanks for your quick answer.  I'm not familiar with an I/O mortgage.  Accepting the caveats you mention, could you briefly describe how they function?

Thanks again.

CLJ2986

K_S said:

CLJ2986 said:

Hey, I'm having a slight panic and hoping you'll be able to tell me I'm worrying over nothing... we got our mortgage offer through 2 weeks ago, its with a specialist lender and 90%ltv. I've recently changed my car insurance over as my renewal was due and it was silly money so got it much cheaper. However the new insurance is now showing on my credit file and I know the score is meaningless but its dropped, will this affect our offer if they do a 2nd credit check or will they ignore the new account as its clearly insurance? Thanks! 

@clj2986 It's quite normal for applicants to do what you did and it's never led to an offer being pulled in my experience.

Thanks for the reply. I've never had an insurance account show up on my credit file before so worried me a bit lol

[Deleted User]

CLJ2986 said:

Hey, I'm having a slight panic and hoping you'll be able to tell me I'm worrying over nothing... we got our mortgage offer through 2 weeks ago, its with a specialist lender and 90%ltv. I've recently changed my car insurance over as my renewal was due and it was silly money so got it much cheaper. However the new insurance is now showing on my credit file and I know the score is meaningless but its dropped, will this affect our offer if they do a 2nd credit check or will they ignore the new account as its clearly insurance? Thanks! 

As far as I'm aware car insurance companies will only run hard searches if you are paying monthly. Was the drop significant?

CLJ2986

kal-el said:

CLJ2986 said:

Hey, I'm having a slight panic and hoping you'll be able to tell me I'm worrying over nothing... we got our mortgage offer through 2 weeks ago, its with a specialist lender and 90%ltv. I've recently changed my car insurance over as my renewal was due and it was silly money so got it much cheaper. However the new insurance is now showing on my credit file and I know the score is meaningless but its dropped, will this affect our offer if they do a 2nd credit check or will they ignore the new account as its clearly insurance? Thanks! 

As far as I'm aware car insurance companies will only run hard searches if you are paying monthly. Was the drop significant?

Yes it's monthly, and there are no hard searches although a lot of soft ones but my insurance is now showing as a credit account with a balance which just threw me as I've never seen my insurance show up on a credit report before. I think I've dropped about 30 points and that's the only change, plus 2 hard searches from my mortgage lender 🙄 again I'm aware the score is largely irrelevant so I'm hoping since the account has insurance in the name it won't have a significant impact if they credit checked again? 

CLJ2986

Or should I email my broker to explain now? 

trackboy

How likely is the sale of house to be completed. If started by this week. House in no chain and plus just require to basic survey.

[Deleted User]

CLJ2986 said:

kal-el said:

CLJ2986 said:

Hey, I'm having a slight panic and hoping you'll be able to tell me I'm worrying over nothing... we got our mortgage offer through 2 weeks ago, its with a specialist lender and 90%ltv. I've recently changed my car insurance over as my renewal was due and it was silly money so got it much cheaper. However the new insurance is now showing on my credit file and I know the score is meaningless but its dropped, will this affect our offer if they do a 2nd credit check or will they ignore the new account as its clearly insurance? Thanks! 

As far as I'm aware car insurance companies will only run hard searches if you are paying monthly. Was the drop significant?

Yes it's monthly, and there are no hard searches although a lot of soft ones but my insurance is now showing as a credit account with a balance which just threw me as I've never seen my insurance show up on a credit report before. I think I've dropped about 30 points and that's the only change, plus 2 hard searches from my mortgage lender 🙄 again I'm aware the score is largely irrelevant so I'm hoping since the account has insurance in the name it won't have a significant impact if they credit checked again? 

It's more than likely the hard searches that caused the drop. The lender should see what searches are on your file and see there is no new credit. Always a good idea to disclose to broker though. 

Niamh5664

CLJ2986 said:

kal-el said:

CLJ2986 said:

Hey, I'm having a slight panic and hoping you'll be able to tell me I'm worrying over nothing... we got our mortgage offer through 2 weeks ago, its with a specialist lender and 90%ltv. I've recently changed my car insurance over as my renewal was due and it was silly money so got it much cheaper. However the new insurance is now showing on my credit file and I know the score is meaningless but its dropped, will this affect our offer if they do a 2nd credit check or will they ignore the new account as its clearly insurance? Thanks! 

As far as I'm aware car insurance companies will only run hard searches if you are paying monthly. Was the drop significant?

Yes it's monthly, and there are no hard searches although a lot of soft ones but my insurance is now showing as a credit account with a balance which just threw me as I've never seen my insurance show up on a credit report before. I think I've dropped about 30 points and that's the only change, plus 2 hard searches from my mortgage lender 🙄 again I'm aware the score is largely irrelevant so I'm hoping since the account has insurance in the name it won't have a significant impact if they credit checked again? 

The exact same thing happened to me, we had a AIP which was referred and had a credit check which thankfully was accepted. Then My car insurance which I pay monthly for was up for renewal, so went with a different company which was nearly £60 cheaper a month. We submitted an application and I didn’t think anything of it then I looked at an updated credit report and my car insurance had been added to it, which like you said, hasn’t happened before 🤷‍♀️ Anyway I panicked and rang my MA but she told me not to worry and it would be fine! So I’m sure yours will be too!