Mortgage broker - ask me anything

CoffeeTableBook

Good morning. I have two questions if that's ok 

1) Would it be a problem to obtain car finance/loan approximately three or four months before applying for a mortgage/

2) If the loan was £5000 and the monthly payments were approximately £230, would this affect how much a lender would be prepared to offer me, and if so, by what extent?  I have no other monthly commitments (no childcare, gym, other loans etc).  

Thank you.

K_S

@CoffeeTableBook

1. Other than the potential impact on affordability (see below), new credit taken out 3-4 months prior to a mortgage application is unlikely to have any material impact.

2. Depends on your case. Just have a play around with a few lender affordability calculators and you can get an idea of what impact (if any) it may have on your max borrowing.

https://www.santanderforintermediaries.co.uk/calculators-and-forms/affordability/

https://www.nationwide-intermediary.co.uk/calculators/affordability-calculator

ClaireLH1978

I am relocating for work and mortgage free at the minute. The house I have seen is £30,000 over what I have. I am currently on a military pension (£10,512 per year) and have no pay-slips obviously as I start work next month. I did an online application and the best I have found is £9000 mortgage which obviously is not even worth the interest.

Any workarounds or do I have to wait 3 months and lose the sale on my house? I don't want to rent.
Thanks

K_S

ClaireLH1978 said:

I am relocating for work and mortgage free at the minute. The house I have seen is £30,000 over what I have. I am currently on a military pension (£10,512 per year) and have no pay-slips obviously as I start work next month. I did an online application and the best I have found is £9000 mortgage which obviously is not even worth the interest.

Any workarounds or do I have to wait 3 months and lose the sale on my house? I don't want to rent.
Thanks

@clairelh1978 Generally speaking, if you have a contract for a job starting in a month and are/were in employment, you should potentially have a couple of lender options.

If you haven't already, I would recommend getting in touch with a whole of market broker who can look at the whole scenario and give you a realistic sense of your options. The MSE guide has a few recommendations.

ClaireLH1978

I have been waiting to start and so have not had pay from employment since Apr, just my pension pay slips

CoffeeTableBook

K_S said:

@CoffeeTableBook

1. Other than the potential impact on affordability (see below), new credit taken out 3-4 months prior to a mortgage application is unlikely to have any material impact.

2. Depends on your case. Just have a play around with a few lender affordability calculators and you can get an idea of what impact (if any) it may have on your max borrowing.

Thanks @K_S, I have just tried that Nationwide one and it seems as though it would be ok, as thankfully I have no other credit commitments. 

Is there a difference in how a personal loan would be viewed in comparison to a car finance scheme? Would one 'look' better than the other?

JamieJ89

Hello,

are 95% mortgages available to those with less than perfect credit?

I have 3 defaults on my credit file, one from 2019 (£250) and the others from 2017 (£1500 and £1600) all of which are settled.

Thanks.

K_S

JamieJ89 said:

Hello,

are 95% mortgages available to those with less than perfect credit?

I have 3 defaults on my credit file, one from 2019 (£250) and the others from 2017 (£1500 and £1600) all of which are settled.

Thanks.

@jamiej89 Based on the limited info in your post, you should have access to a couple of products at least. 

The size and number of defaults probably rules out mainstream/near-mainstream rates but you can always go for a 2-year fix now and then look to remortgage to a lower rate at the end of the fix, by which time your older defaults should have dropped off.

Liyana89

Is a p45 needed when applying for mortgage? I haven’t worked in a fulltime job for a few years now, and I’ve definitely lost my p45.

How can I solve this?

K_S

Liyana89 said:

Is a p45 needed when applying for mortgage? I haven’t worked in a fulltime job for a few years now, and I’ve definitely lost my p45.

How can I solve this?

@Liyana89 P45s are rarely required. If you haven't worked for years, then a P45 from your last job is of no use whatsoever to the lender.