Mortgage broker - ask me anything

perdusys

Hi, hoping for some advice regarding mortgages and levels of debt.
My son and his fiancee are currently living with us and saving for a mortgage, they have yearly salaries of £20K and approx £25K.  They are currently clearing their credit card debt, but have each got a bank loan of between £8500.  How would this impact any mortgage deal or do they need to have repaid the whole debt ( £17K) before they could apply?  I think as we live in the South East, any purchase will have to be shared ownership, as I do not think they will be able to raise enough deposit and mortgage for an outright purchase, will that affect the situation?

ASL1976

Thanks for your reply - no specific reason for Barclays - just because it was online and friends recommended to try there. Perhaps a bit daft.............can you recommend someone for me to talk to, please?

ASL1976

K_S said:

ASL1976 said:

Hello - looking for some help! My wife and I have a single income of around £3,400 a month (from my job). For the past three years I have been paying my debts back via StepChange. This arrangement was a Debt Management Plan. My rent is currently £1,600.00 a month and I was paying StepChange £550 a month. We think if we can get a mortgage for around £800 a month that would mean we were significantly stronger financially (half the rent and no stepchange = £1,350.00 spare a month). My debts were all paid back and closed off in April. I have no debt at all now and my wife also has no debt. She is not currently working - so we just have my income (as per the above). We are committed to buying a property and have a deposit of £125,000.00 from the sale of a property that was inherited last year. I applied for an agreement in principle with Barclays on Saturday and was turned down - presumably because of the history of debt. I totally understand that position, but I am trying to look to the future and wondered what I could do to move forward and obtain a mortgage for a house. As I say, financially we are now sound and we would be so much better off with a mortgage than continuing to pay rent. It is understandable that Barclays would be refusing, but such a refusal is made on a credit score and not a completely accurate appraisal of our financial position. Any advice or help is really appreciated. Thank you.

@asl1976 Is there any reason you picked Barclays? If you are looking to move quickly, I would recommend getting in touch with an experienced broker to place your case appropriately. With a recently concluded DMP, a lot of mainstream lenders will be off the table. Unfortunately, all mainstream lenders will credit-score but there are lenders who don't who may be more appropriate for your scenario.

Thanks again, further to my last comment about recommendations, can you please confirm whether I should just wait a few months or longer? What sort of timescale do you think would be helpful here. I have two credit accounts that are at zero and will be used once or twice a week for travel and food etc. and paid off each month - trying to raise credit score....what are your thoughts on that, please? Thank you!

K_S

ASL1976 said:

K_S said:

ASL1976 said:

Hello - looking for some help! My wife and I have a single income of around £3,400 a month (from my job). For the past three years I have been paying my debts back via StepChange. This arrangement was a Debt Management Plan. My rent is currently £1,600.00 a month and I was paying StepChange £550 a month. We think if we can get a mortgage for around £800 a month that would mean we were significantly stronger financially (half the rent and no stepchange = £1,350.00 spare a month). My debts were all paid back and closed off in April. I have no debt at all now and my wife also has no debt. She is not currently working - so we just have my income (as per the above). We are committed to buying a property and have a deposit of £125,000.00 from the sale of a property that was inherited last year. I applied for an agreement in principle with Barclays on Saturday and was turned down - presumably because of the history of debt. I totally understand that position, but I am trying to look to the future and wondered what I could do to move forward and obtain a mortgage for a house. As I say, financially we are now sound and we would be so much better off with a mortgage than continuing to pay rent. It is understandable that Barclays would be refusing, but such a refusal is made on a credit score and not a completely accurate appraisal of our financial position. Any advice or help is really appreciated. Thank you.

@asl1976 Is there any reason you picked Barclays? If you are looking to move quickly, I would recommend getting in touch with an experienced broker to place your case appropriately. With a recently concluded DMP, a lot of mainstream lenders will be off the table. Unfortunately, all mainstream lenders will credit-score but there are lenders who don't who may be more appropriate for your scenario.

Thanks again, further to my last comment about recommendations, can you please confirm whether I should just wait a few months or longer? What sort of timescale do you think would be helpful here. I have two credit accounts that are at zero and will be used once or twice a week for travel and food etc. and paid off each month - trying to raise credit score....what are your thoughts on that, please? Thank you!

@asl1976 Sorry there simply isn't enough information to give you targeted advice. Generally speaking, you have two options. One is to get a mortgage now (I don't see enough in your posts to say it will be impossible or an extremely high rate), fix for 2 years and then remortgage to a better rate at the end of the fix.

The other option is to wait and then check out your options every 6 months as the potential lender pool will keep widening.

Just to be clear, this is very rudimentary advice based on one single factor - your recently discharged DMP. There might well be more details in the background that help/hinder your chances. I hope that makes sense.

ASL1976

K_S said:

ASL1976 said:

K_S said:

ASL1976 said:

Hello - looking for some help! My wife and I have a single income of around £3,400 a month (from my job). For the past three years I have been paying my debts back via StepChange. This arrangement was a Debt Management Plan. My rent is currently £1,600.00 a month and I was paying StepChange £550 a month. We think if we can get a mortgage for around £800 a month that would mean we were significantly stronger financially (half the rent and no stepchange = £1,350.00 spare a month). My debts were all paid back and closed off in April. I have no debt at all now and my wife also has no debt. She is not currently working - so we just have my income (as per the above). We are committed to buying a property and have a deposit of £125,000.00 from the sale of a property that was inherited last year. I applied for an agreement in principle with Barclays on Saturday and was turned down - presumably because of the history of debt. I totally understand that position, but I am trying to look to the future and wondered what I could do to move forward and obtain a mortgage for a house. As I say, financially we are now sound and we would be so much better off with a mortgage than continuing to pay rent. It is understandable that Barclays would be refusing, but such a refusal is made on a credit score and not a completely accurate appraisal of our financial position. Any advice or help is really appreciated. Thank you.

@asl1976 Is there any reason you picked Barclays? If you are looking to move quickly, I would recommend getting in touch with an experienced broker to place your case appropriately. With a recently concluded DMP, a lot of mainstream lenders will be off the table. Unfortunately, all mainstream lenders will credit-score but there are lenders who don't who may be more appropriate for your scenario.

Thanks again, further to my last comment about recommendations, can you please confirm whether I should just wait a few months or longer? What sort of timescale do you think would be helpful here. I have two credit accounts that are at zero and will be used once or twice a week for travel and food etc. and paid off each month - trying to raise credit score....what are your thoughts on that, please? Thank you!

@asl1976 Sorry there simply isn't enough information to give you targeted advice. Generally speaking, you have two options. One is to get a mortgage now (I don't see enough in your posts to say it will be impossible or an extremely high rate), fix for 2 years and then remortgage to a better rate at the end of the fix.

The other option is to wait and then check out your options every 6 months as the potential lender pool will keep widening.

Just to be clear, this is very rudimentary advice based on one single factor - your recently discharged DMP. There might well be more details in the background that help/hinder your chances. I hope that makes sense.

Are you able to please recommend someone that I could speak with about this?

K_S

perdusys said:

Hi, hoping for some advice regarding mortgages and levels of debt.
My son and his fiancee are currently living with us and saving for a mortgage, they have yearly salaries of £20K and approx £25K.  They are currently clearing their credit card debt, but have each got a bank loan of between £8500.  How would this impact any mortgage deal or do they need to have repaid the whole debt ( £17K) before they could apply?  I think as we live in the South East, any purchase will have to be shared ownership, as I do not think they will be able to raise enough deposit and mortgage for an outright purchase, will that affect the situation?

@perdusys The impact of the debt will lessen if they can get a long term. If they pay it off in full they are likely to max out at around 4.75 times income. 17k of debt in the background will significantly reduce the max borrowing. Shared ownership affordability will be calculated slightly differently, as the rental outgoing will also have an impact. 

lonibra

ASL1976 said:

K_S said:

ASL1976 said:

K_S said:

ASL1976 said:

Hello - looking for some help! My wife and I have a single income of around £3,400 a month (from my job). For the past three years I have been paying my debts back via StepChange. This arrangement was a Debt Management Plan. My rent is currently £1,600.00 a month and I was paying StepChange £550 a month. We think if we can get a mortgage for around £800 a month that would mean we were significantly stronger financially (half the rent and no stepchange = £1,350.00 spare a month). My debts were all paid back and closed off in April. I have no debt at all now and my wife also has no debt. She is not currently working - so we just have my income (as per the above). We are committed to buying a property and have a deposit of £125,000.00 from the sale of a property that was inherited last year. I applied for an agreement in principle with Barclays on Saturday and was turned down - presumably because of the history of debt. I totally understand that position, but I am trying to look to the future and wondered what I could do to move forward and obtain a mortgage for a house. As I say, financially we are now sound and we would be so much better off with a mortgage than continuing to pay rent. It is understandable that Barclays would be refusing, but such a refusal is made on a credit score and not a completely accurate appraisal of our financial position. Any advice or help is really appreciated. Thank you.

@asl1976 Is there any reason you picked Barclays? If you are looking to move quickly, I would recommend getting in touch with an experienced broker to place your case appropriately. With a recently concluded DMP, a lot of mainstream lenders will be off the table. Unfortunately, all mainstream lenders will credit-score but there are lenders who don't who may be more appropriate for your scenario.

Thanks again, further to my last comment about recommendations, can you please confirm whether I should just wait a few months or longer? What sort of timescale do you think would be helpful here. I have two credit accounts that are at zero and will be used once or twice a week for travel and food etc. and paid off each month - trying to raise credit score....what are your thoughts on that, please? Thank you!

@asl1976 Sorry there simply isn't enough information to give you targeted advice. Generally speaking, you have two options. One is to get a mortgage now (I don't see enough in your posts to say it will be impossible or an extremely high rate), fix for 2 years and then remortgage to a better rate at the end of the fix.

The other option is to wait and then check out your options every 6 months as the potential lender pool will keep widening.

Just to be clear, this is very rudimentary advice based on one single factor - your recently discharged DMP. There might well be more details in the background that help/hinder your chances. I hope that makes sense.

Are you able to please recommend someone that I could speak with about this?

The MBs on the forum cannot recommend another MB or encourage you to contact them in any way. Forum rules to discourage spam and advertising. There are a few really good MBs on this forum, users are free to drop them a PM if you want. I was in a pickle and helped out by one of these fine folk.

ASL1976

lonibra said:

ASL1976 said:

K_S said:

ASL1976 said:

K_S said:

ASL1976 said:

Hello - looking for some help! My wife and I have a single income of around £3,400 a month (from my job). For the past three years I have been paying my debts back via StepChange. This arrangement was a Debt Management Plan. My rent is currently £1,600.00 a month and I was paying StepChange £550 a month. We think if we can get a mortgage for around £800 a month that would mean we were significantly stronger financially (half the rent and no stepchange = £1,350.00 spare a month). My debts were all paid back and closed off in April. I have no debt at all now and my wife also has no debt. She is not currently working - so we just have my income (as per the above). We are committed to buying a property and have a deposit of £125,000.00 from the sale of a property that was inherited last year. I applied for an agreement in principle with Barclays on Saturday and was turned down - presumably because of the history of debt. I totally understand that position, but I am trying to look to the future and wondered what I could do to move forward and obtain a mortgage for a house. As I say, financially we are now sound and we would be so much better off with a mortgage than continuing to pay rent. It is understandable that Barclays would be refusing, but such a refusal is made on a credit score and not a completely accurate appraisal of our financial position. Any advice or help is really appreciated. Thank you.

@asl1976 Is there any reason you picked Barclays? If you are looking to move quickly, I would recommend getting in touch with an experienced broker to place your case appropriately. With a recently concluded DMP, a lot of mainstream lenders will be off the table. Unfortunately, all mainstream lenders will credit-score but there are lenders who don't who may be more appropriate for your scenario.

Thanks again, further to my last comment about recommendations, can you please confirm whether I should just wait a few months or longer? What sort of timescale do you think would be helpful here. I have two credit accounts that are at zero and will be used once or twice a week for travel and food etc. and paid off each month - trying to raise credit score....what are your thoughts on that, please? Thank you!

@asl1976 Sorry there simply isn't enough information to give you targeted advice. Generally speaking, you have two options. One is to get a mortgage now (I don't see enough in your posts to say it will be impossible or an extremely high rate), fix for 2 years and then remortgage to a better rate at the end of the fix.

The other option is to wait and then check out your options every 6 months as the potential lender pool will keep widening.

Just to be clear, this is very rudimentary advice based on one single factor - your recently discharged DMP. There might well be more details in the background that help/hinder your chances. I hope that makes sense.

Are you able to please recommend someone that I could speak with about this?

The MBs on the forum cannot recommend another MB or encourage you to contact them in any way. Forum rules to discourage spam and advertising. There are a few really good MBs on this forum, users are free to drop them a PM if you want. I was in a pickle and helped out by one of these fine folk.

Thank you so much for this. Much appreciated and apologies if I inadvertently broke the forum rules.

Madeinireland101

K_S said:

@madeinireland101

- Generally speaking, yes Principality usually will take longer than the likes of Halifax.

- You've only had an offer accepted a few days ago, I don't see any reason why the EA would be spooked by a change in solicitors.

- As you have described it, the time away on holiday is unlikely to be an issue.

Update: The saga goes on. Principality have rejected her on the basis that she doesn’t have residency in this country for the last 3 years at a UK address. I suppose this means Principality don’t lend to anyone who has been on any form of working holiday abroad until they have been back in the country for 3 years. I find that a bit hard to believe but there you go. We have a follow up call with the Halifax for this Friday where her earnings for the last week will hopefully satisfy their affordability checks. If not I might just give her the money myself and be her Mortgage lender 😀

perdusys

K_S said:

perdusys said:

Hi, hoping for some advice regarding mortgages and levels of debt.
My son and his fiancee are currently living with us and saving for a mortgage, they have yearly salaries of £20K and approx £25K.  They are currently clearing their credit card debt, but have each got a bank loan of between £8500.  How would this impact any mortgage deal or do they need to have repaid the whole debt ( £17K) before they could apply?  I think as we live in the South East, any purchase will have to be shared ownership, as I do not think they will be able to raise enough deposit and mortgage for an outright purchase, will that affect the situation?

@perdusys The impact of the debt will lessen if they can get a long term. If they pay it off in full they are likely to max out at around 4.75 times income. 17k of debt in the background will significantly reduce the max borrowing. Shared ownership affordability will be calculated slightly differently, as the rental outgoing will also have an impact. 

Thanks for the response, I am assuming that they should pay down as much debt as possible and that would give them a better chance of being succesful.  Is it likely they could get a mortgage with that level of debt?  I believe they have been told they can get a mortgage even with this debt, but I am wondering if this would change on submission to an underwriter?