Mortgage broker - ask me anything

K_S

tommydog40 said:

K_S said:

If you want a mortgage simply to purchase the land with no further obligations/stages, then you're looking at a land mortgage, typically only offered by specialist lenders. You may struggle with a 25% deposit, typically you need a bit more. Rates are likely to be much higher than standard resi mortgages as well.

From my understanding, don't land mortgages require you to own property or land to secure it against?  Or are there products out there that do not require this?  I also imagine land mortgages are targeted at farmers / people with a commercial business plan for the land.  In my situation, I simply want to convert the barn to a dwelling and live on the land.  I will be doing all the building work myself alongside a full time job and don't want the pressure of timescales (plus I want a social life!).  I would rather pay for the land and then complete the build in my own time over many years.  If I only had a couple of years to complete, I would have to get professional builders in, which would not make financial sense and the build is actually something I would enjoy as a long term project.  Are there any product on the market which would be suitable for me?

@tommydog40 Are there products that will allow you to buy the land? Yes. 

Will you be eligible for them and/or will they be suitable for you? There simply isn't enough information to say.

brynyhew

What are my options?

I currently have a residential mortgage on a flat in England affected by Building Safety (needs remedial works, BSF application for funding has been rejected, appeal in progress) but I need to move to Scotland very soon due to work.

Thankfully, we do have savings, and intended to cash purchase a new home while waiting for the remedial works to be completed. Unfortunately, due to the surge in the market we can no longer afford to buy outright in the area we'd hoped to.

Sadly, my OH has not had income for a number of years due to caring for a family member, and my employment is now fixed term for 2.5yrs rather than perm. (Although is civil service, so I'm hoping that plays some part in offsetting that risk) so I assume mortgage options are slim to none.

The options that I'm working with are;

Rent in the area, hoping the market will calm down. (Risk being that we find ourselves in 12 months time, having spent savings on rent and the housing market is no less crazy than it is now)

Buy a much smaller / worse condition / worse location property and stick it out until the flat sells. (Risk that we've overpaid for something in the current market that will leave us in negative equity again when the flat has eventually been dealt with)

How likely is it that I could switch the mortgage we already have to a buy-to-let so at least we're not paying for a mortgage on an empty flat?

Would a bridging loan for maybe 40% of a new purchase be an option?

Anything I've not thought about?

Thank you so much for any advice (or emotional support!)

GeorgianaCavendish

Having a bit of debate about how much of our cash savings to put into a deposit vs keeping for emergency fund or post-move expenses. 

Is there a big incentive rates-wise between say having a 10% deposit vs 12.5% deposit? 

K_S

GeorgianaCavendish said:

Having a bit of debate about how much of our cash savings to put into a deposit vs keeping for emergency fund or post-move expenses. 

Is there a big incentive rates-wise between say having a 10% deposit vs 12.5% deposit? 

@GeorgianaCavendish Rates only change at 5% intervals so the deposit being 10% or 14.99% will both mean 90% LTV products.

K_S

brynyhew said:

What are my options?

I currently have a residential mortgage on a flat in England affected by Building Safety (needs remedial works, BSF application for funding has been rejected, appeal in progress) but I need to move to Scotland very soon due to work.

Thankfully, we do have savings, and intended to cash purchase a new home while waiting for the remedial works to be completed. Unfortunately, due to the surge in the market we can no longer afford to buy outright in the area we'd hoped to.

Sadly, my OH has not had income for a number of years due to caring for a family member, and my employment is now fixed term for 2.5yrs rather than perm. (Although is civil service, so I'm hoping that plays some part in offsetting that risk) so I assume mortgage options are slim to none.

The options that I'm working with are;

Rent in the area, hoping the market will calm down. (Risk being that we find ourselves in 12 months time, having spent savings on rent and the housing market is no less crazy than it is now)

Buy a much smaller / worse condition / worse location property and stick it out until the flat sells. (Risk that we've overpaid for something in the current market that will leave us in negative equity again when the flat has eventually been dealt with)

How likely is it that I could switch the mortgage we already have to a buy-to-let so at least we're not paying for a mortgage on an empty flat?

Would a bridging loan for maybe 40% of a new purchase be an option?

Anything I've not thought about?

Thank you so much for any advice (or emotional support!)

@brynyhew Quick thoughts      

- If your block requires repair work, you are unlikely to be able to change lenders. Even if staying with the same lender, I doubt they would let you switch to a BTL product (if they offer one) but no harm in asking.

- If it's unsaleable at the moment, they should be open to giving you consent to let (CTL) the property. And if the rental income covers about 140%+ of the mortgage payment under CTL, it should have no material impact on your affordability for a new mortgage

- With a 2.5 year FTC, you should have mainstream options who will consider lending.

mistapike

haras_n0sirrah said:

Thought I would start a thread where people can ask the brokers opinion on things @ACG @LRmortgage @kingstreet @Deleted_User (any other brokers want to chip in - these were the main other brokers who came to mind.
It is definately an interesting market - probably the busiest I have ever been but at the same time lenders are sooo slow. 
Anyone got a question? Ask away

I am interest in a Retirement Interest only mortgage as part of moving house, but from what I can see is available on the market, they are nearly all only available to fund releasing equity in your existing home (and not for moves) - the only exception I have found is the Post Office, but in their case a criteria is you must already be drawing pension income (which I am not yet)  - do you know of any available RIO products which may suit me (RIO only - not equity release) - Thanks

K_S

mistapike said:

haras_n0sirrah said:

Thought I would start a thread where people can ask the brokers opinion on things @ACG @LRmortgage @kingstreet @Deleted_User (any other brokers want to chip in - these were the main other brokers who came to mind.
It is definately an interesting market - probably the busiest I have ever been but at the same time lenders are sooo slow. 
Anyone got a question? Ask away

I am interest in a Retirement Interest only mortgage as part of moving house, but from what I can see is available on the market, they are nearly all only available to fund releasing equity in your existing home (and not for moves) - the only exception I have found is the Post Office, but in their case a criteria is you must already be drawing pension income (which I am not yet)  - do you know of any available RIO products which may suit me (RIO only - not equity release) - Thanks

@mistapike There isn't close to enough information to say what may suit you, but assuming you're at least 55, there are mainstream RIO lenders who will consider applicants purchasing a main residence.

GeorgianaCavendish

K_S said:

GeorgianaCavendish said:

Having a bit of debate about how much of our cash savings to put into a deposit vs keeping for emergency fund or post-move expenses. 

Is there a big incentive rates-wise between say having a 10% deposit vs 12.5% deposit? 

@GeorgianaCavendish Rates only change at 5% intervals so the deposit being 10% or 14.99% will both mean 90% LTV products.

Thank you, that is very helpful and will settle an argument! 

wifefaefife

Should we pay off our mortgage?

We have an offset mortgage and with next months mortgage payment our offset account balance will equal the same as our outstanding mortgage balance (approximately 25k). 

We have other savings so we do not need access to the 25k in our offset account. We don’t see ourselves moving home for at least the next 3 years. Both my husband and I are in our early 40’s. 

GeorgianaCavendish

Sorry, another question!  
At what stage in the buying process do we need to commit to a mortgage rate. If for example, we obtained a decision in principle to borrow 90% at the start of house hunting, but it turns out that we would be able to put down an extra 5% before completion, when would be the latest we could make that change?