Mortgage broker - ask me anything

K_S

perdusys said:

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?

@perdusys There are some lenders who have explicit debt-to-income limitations, but also plenty that don't. But generally speaking, even retaining that level of background debt shouldn't stop them from getting a mortgage. The main impact it will have is that the maximum borrowing will be lower than what it would be without that debt.

mortgage_noob

Hi, 

Another question from me, can anyone tell me how long a Barclays MIP (done through a broker) is valid for as my broker said it's 6 months but I can't find anything that supports this and she's told me incorrect info before (e.g that the MIP wouldn't involve a hard credit check, when it did).
We got an MIP back in Jan so not sure if it's still valid.

kingstreet

mortgage_noob said:

Hi, 

Another question from me, can anyone tell me how long a Barclays MIP (done through a broker) is valid for as my broker said it's 6 months but I can't find anything that supports this and she's told me incorrect info before (e.g that the MIP wouldn't involve a hard credit check, when it did).
We got an MIP back in Jan so not sure if it's still valid.

90 days for accept.
30 days for provisional accept.

mortgage_noob

Ok thanks, that's really useful to know. Really don't have much faith in the broker at this point!

We just got an offer accepted and  according to MSE the best product for is through Barclays.

 We thought we'd have to stick with her as the MIP was done through her and apparently still valid. But if that's not the case then perhaps we can change.
Could it throw up issues applying with the same lender  if we change broker or even go direct?

lonibra

mortgage_noob said:

Ok thanks, that's really useful to know. Really don't have much faith in the broker at this point!

We thought we'd have to stick with her as the MIP was done through her and apparently still valid. But if that's not the case then perhaps we can change.
The problem is Barclays have the best product for us now, could it throw up issues if we change broker or even go direct?

That is really poor of your MB. I have changed MBs midway, similar issue as yours, he got me in a right pickle and didn't give a monkeys. The new one showed me what an MB should be like. Didn't have any issues so don't let that stop you.

Fkhan95

Just a quick one for any of the MB’s - Recently applied to Accord via broker and DIP was initially refer which was then changed to accept and full application went in 18/05/2021. Valuation has been booked for tomorrow and MB has said the application is with underwriter. Just wanted to know if Accord instruct valuation at the beginning or perhaps underwriting has taken place already - perhaps upfront underwriting due to initial DIP refer? 

Thank you. 

K_S

Fkhan95 said:

Just a quick one for any of the MB’s - Recently applied to Accord via broker and DIP was initially refer which was then changed to accept and full application went in 18/05/2021. Valuation has been booked for tomorrow and MB has said the application is with underwriter. Just wanted to know if Accord instruct valuation at the beginning or perhaps underwriting has taken place already - perhaps upfront underwriting due to initial DIP refer?

Thank you. 

@fkhan95 Accord usually instruct the valuation when they pick up the case and confirm that minimum packaging is present and it can proceed to underwriting.

marvelman1985

Hi guys, quick question on how my wife’s student loan debt may affect our mortgage offer amount…

Basically, I’m the sole earner in the household but we’d always been putting us both down for the mortgage via online calculators, and now via our broker too. However, my wife has a fairly substantial outstanding student loan amount left, but obviously doesn’t pay anything towards this as she isn’t earning these days (looking after kids).

I guess my question is, is this debt likely to affect our application in any way, even though it’s not a financial commitment right now, or would we be better just applying for the mortgage in my name? Thinking about it, is that even allowed i.e. not declaring a debt of a financial dependent, even though there’s no monthly repayment?

The counter to that approach is that our Child Benefit is in her name, and I’ve been led to understand some lenders take this into consideration as income (?) - at ~£1k a year, given our house hunting budget level, literally every extra income penny will help us!  

Naturally, please do excuse any ignorance in my part if any of the above sounds unhinged 🥴

(And a final many, many thanks for a continually useful thread!)

K_S

@marvelman1985 Generally speaking, only student loan repayments will impact affordability, not any notional outstanding amount.

Child benefit will be considered by many lenders as income for affordablity purposes.

marvelman1985

K_S said:

@marvelman1985 Generally speaking, only student loan repayments will impact affordability, not any notional outstanding amount.

Child benefit will be considered by many lenders as income for affordablity purposes.

Ah, that’s really good to know, thank you so much for the incredibly prompt reply!