Mortgage broker - ask me anything

Eassenav

We are in the process of remortgaging - we have approximately 80 days until we need to complete without paying any penalty.  Our current mortgage is very high (4.17%) and our new mortgage will be 1.14%.  We have approximately £10000 in savings (earning 0.5%) and wondered if there would be any benefit in making an overpayment on our current mortgage - we have already been approved for our loan so this will mean we have a surplus amount if we make the overpayment (as it is I think we will have a surplus of £3k as we didn't know what the amount would be owed when the deal came to an end).

We can make overpayments of up to 10% of the amount outstanding on our mortgage (this would be £22500 so well above our savings).  To date we have never made an overpayment.  We kept the savings instead of overpaying in case we needed it due to Covid.

The savings are a combination of money saved during Covid and my husband's annual bonus.  Will the lender be suspicious of a large overpayment?  Are there any other implications of making a large overpayment I need to be aware of?

Thank you very much for reading and help, it is very much appreciated.

K_S

Eassenav said:

We are in the process of remortgaging - we have approximately 80 days until we need to complete without paying any penalty.  Our current mortgage is very high (4.17%) and our new mortgage will be 1.14%.  We have approximately £10000 in savings (earning 0.5%) and wondered if there would be any benefit in making an overpayment on our current mortgage - we have already been approved for our loan so this will mean we have a surplus amount if we make the overpayment (as it is I think we will have a surplus of £3k as we didn't know what the amount would be owed when the deal came to an end).

We can make overpayments of up to 10% of the amount outstanding on our mortgage (this would be £22500 so well above our savings).  To date we have never made an overpayment.  We kept the savings instead of overpaying in case we needed it due to Covid.

The savings are a combination of money saved during Covid and my husband's annual bonus.  Will the lender be suspicious of a large overpayment?  Are there any other implications of making a large overpayment I need to be aware of?

Thank you very much for reading and help, it is very much appreciated.

@eassenav      

- Overpaying 10k for the 80 days to completion would save you about £80 in interest between now and then. And thereon on the new rate.

- I've never heard of a lender questioning a mortgage overpayment of 10k

- If you now need only a smaller loan amount, it should be fairly easy to reduce it and have a new offer issued.

K_S

GeorgianaCavendish said:

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?

@georginacavendish The latest would be prior to requesting funds from the lender which happens a few days before completion.

GeorgianaCavendish

K_S said:

GeorgianaCavendish said:

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?

@georginacavendish The latest would be prior to requesting funds from the lender which happens a few days before completion.

Brilliant, thank you so much - I can't tell you how much I appreciate your help with all my questions  

Eassenav

K_S said:

Eassenav said:

We are in the process of remortgaging - we have approximately 80 days until we need to complete without paying any penalty.  Our current mortgage is very high (4.17%) and our new mortgage will be 1.14%.  We have approximately £10000 in savings (earning 0.5%) and wondered if there would be any benefit in making an overpayment on our current mortgage - we have already been approved for our loan so this will mean we have a surplus amount if we make the overpayment (as it is I think we will have a surplus of £3k as we didn't know what the amount would be owed when the deal came to an end).

We can make overpayments of up to 10% of the amount outstanding on our mortgage (this would be £22500 so well above our savings).  To date we have never made an overpayment.  We kept the savings instead of overpaying in case we needed it due to Covid.

The savings are a combination of money saved during Covid and my husband's annual bonus.  Will the lender be suspicious of a large overpayment?  Are there any other implications of making a large overpayment I need to be aware of?

Thank you very much for reading and help, it is very much appreciated.

@eassenav      

- Overpaying 10k for the 80 days to completion would save you about £80 in interest between now and then. And thereon on the new rate.

- I've never heard of a lender questioning a mortgage overpayment of 10k

- If you now need only a smaller loan amount, it should be fairly easy to reduce it and have a new offer issued.

Thank you so much for taking the time to read and reply to my query, it is much appreciated.  We plan to keep the loan as it is as we need it for home improvements.

spinelli101

Hi,

My wife and I are first time buyers and have lived together in a few rented properties for the last 12 years. Both our names are on tenancy agreements, utility bills & council tax, however she still uses her parents address for banking, voting, and her drivers licence (just hasn't gotten round to changing it). She has always used her parents address for previous credit checks since that's where everything was set up. Is this likely to cause problems in getting a mortgage? 

Ideally we'd like to move quickly with buying a property - is she going to have to change all of the above (including drivers licence, which will take ages) to our current address?

K_S

spinelli101 said:

Hi,

My wife and I are first time buyers and have lived together in a few rented properties for the last 12 years. Both our names are on tenancy agreements, utility bills & council tax, however she still uses her parents address for banking, voting, and her drivers licence (just hasn't gotten round to changing it). She has always used her parents address for previous credit checks since that's where everything was set up. Is this likely to cause problems in getting a mortgage? 

Ideally we'd like to move quickly with buying a property - is she going to have to change all of the above (including drivers licence, which will take ages) to our current address?

@spinelli101 She won't necessarily have to change her addresses but the situation you've described may mean that you fail (or get referred) on a DIP (Decision In Principle) or the lender "credit-scoring" because the lender's system isn't able to properly identify your wife at your current address.

If you want to minimise the risk of any issues/hold-ups during the mortgage process, you may want to consider changing the addresses on her financial accounts (current account, credit cards, loans, etc).

spinelli101

K_S said:

spinelli101 said:

Hi,

My wife and I are first time buyers and have lived together in a few rented properties for the last 12 years. Both our names are on tenancy agreements, utility bills & council tax, however she still uses her parents address for banking, voting, and her drivers licence (just hasn't gotten round to changing it). She has always used her parents address for previous credit checks since that's where everything was set up. Is this likely to cause problems in getting a mortgage? 

Ideally we'd like to move quickly with buying a property - is she going to have to change all of the above (including drivers licence, which will take ages) to our current address?

@spinelli101 She won't necessarily have to change her addresses but the situation you've described may mean that you fail (or get referred) on a DIP (Decision In Principle) or the lender "credit-scoring" because the lender's system isn't able to properly identify your wife at your current address.

If you want to minimise the risk of any issues/hold-ups during the mortgage process, you may want to consider changing the addresses on her financial accounts (current account, credit cards, loans, etc).

Thanks for such a quick response!

So, we've lived at our current address for 4 years, and at a previous address for 5 years before that. We have a DIP based on this information (but I realise this may not hold up at the application stage now). If she does change her address on everything to our current address, would it still be okay that our move in date was 4 years ago but she has only just registered to vote at this address (etc) now? 

When asked about previous addresses, would it be best for her to put her parents address or the real address that we jointly paid council tax on before this one?

Lord_e55ex

What are you views on interest rates in the next 2 Years. I can only see them staying the same or going up.

I am looking at the 0.99% 5 year term with Nationwide..... Could things really go negative?!.....

FindMyWayBack

How do I find OPSO properties locally please?