Mortgage broker - ask me anything

Liz65

Hi, just wondering if you can advise me?  My husband and I want to to downsize our property and move to a different area.  Problem is we have an interest only mortgage so none of the mortgage is paid and my husband who is the only person working at the moment is 60 in a couple of weeks.   We have equity in our house, we paid £227,000 and it is worth in excess of £480,000. Obviously we want to pay the mortgage of and all out debts and we would be left with around £220,000 for a deposit on another house.  We have a broker who is trying to get us a mortgage but we have been told we can only get a 10 year 'loan' and they are trying to get us around £100,000 (we are looking at properties of around £330,000). And this loan would be interest only then we could resell in 10 years time and might have equity to put into another house.  I am unsure of this and a bit confused.  What do you think? Many thanks

K_S

Liz65 said:

Hi, just wondering if you can advise me?  My husband and I want to to downsize our property and move to a different area.  Problem is we have an interest only mortgage so none of the mortgage is paid and my husband who is the only person working at the moment is 60 in a couple of weeks.   We have equity in our house, we paid £227,000 and it is worth in excess of £480,000. Obviously we want to pay the mortgage of and all out debts and we would be left with around £220,000 for a deposit on another house.  We have a broker who is trying to get us a mortgage but we have been told we can only get a 10 year 'loan' and they are trying to get us around £100,000 (we are looking at properties of around £330,000). And this loan would be interest only then we could resell in 10 years time and might have equity to put into another house.  I am unsure of this and a bit confused.  What do you think? Many thanks

@liz65 It sounds like your broker is recommending that you take out an interest only mortgage with the aim of repaying the capital by selling and downsizing in 10 years time. Are you planning to downsize in 10 years? And are you only looking for an interest only mortgage?

Depending on your financial circumstances, you could end up in a dangerous situation in 10 years where you aren't able to downsize, aren't able to remortgage and are forced to sell the property to pay off the debt.

mini_lidi

Hoping you can help. 
Our solicitors have requested release of guns for completion Monday and today our mortgage lender has requested a copy of a passport before they will release the funds. 

Is this a coming thing or should we be worried?

Liz65

Hi, thanks for reply, think she expects us to move again in 10 years! Which we are not keen on as my husband would be 70 by then.  We wouldn't really be looking to downsize again and was hoping not to have interest only.  We can't move out any further because of my husbands job and travelling in.

K_S

Liz65 said:

Hi, thanks for reply, think she expects us to move again in 10 years! Which we are not keen on as my husband would be 70 by then.  We wouldn't really be looking to downsize again and was hoping not to have interest only.  We can't move out any further because of my husbands job and travelling in.

@liz65 In that case you need to be clear with your requirements (you want the debt to be paid off at the end of the term and don't/can't depend on downsizing) and see what the broker comes back with.

K_S

mini_lidi said:

Hoping you can help. 
Our solicitors have requested release of guns for completion Monday and today our mortgage lender has requested a copy of a passport before they will release the funds. 

Is this a coming thing or should we be worried?

@mini_lidi It's not usual but nothing to worry about. There are random checks sometimes prior to completion and in all likelihood your case just got picked for no particular reason.

britbat

What is the impact of partial self-employment, especially on LTIs?

My situation: I have a secure permanent part-time employment (salary about £25k pa gross), which I have very recently started to supplement with substantial self-employment (earning a similar amount per year, gross)

The self employment has only just started and I'm going to be looking for a mortgage middle of next year, when I'll have only eight months of sole trader self employment to show 'accounts' for.

Will lenders lend the same amount on my part time income as if there were no self employment? Or does having any self employment make me riskier and therefore reduce the lending? Or are there lenders who will even lend a bit more on the basis of my new self-employed income?

If it makes a difference it would be a joint application with my partner who has similar salary income, no self employment. LTV will be in 75-80% range.

It's crucial because, for what we want, we've got a big deposit but are right on the edge in terms of affordability. (Shame we can't pay some of the deposit back to ourselves as a salary... )

Thanks for any advice

K_S

@britbat With a combined basic PAYE annual income of about 50k, you may be able to borrow in the range of 4.5-5.5x, depending on the lender and the rest of your circumstances.

Your self-employment should not come into the picture unless your bank statements show a lot of cash moving between your personal and business accounts. 

With just 8 months of trading, no lender is likely to consider the income from self employment.

britbat

@K_S thank you, that is really helpful. It's more important that the self-employed doesn't reduce the amount they're willing to lend - all my calculations so far have been based on the salary income. So your advice is reassuring.

BuckfastLover

K_S said:

BuckfastLover said:

Just found out Nationwide has an 'over exposed list' for new build, and the new build I've reserved is on the list. This is such a bummer as I was planning to go with Nationwide for my mortgage.
Does any other lender have this 'list' or is it a Nationwide's thing?

@BuckfastLover This isn't limited to Nationwide.

Thanks@@K_S. Is over exposed list only accessible to the mortgage broker? I had a search on several lenders website but couldn't find anything apart from Nationwide.

Also I assume the lender would inform me whether my property is on their over exposed list when I apply for mortgage?