Mortgage broker - ask me anything

CustardAndPickles

Hello and thanks for this thread. 

We're currently remortgaging our property in order to fund a deposit for a BTL property. 

The remortgage provider is HSBC.

After lots of initial questions from HSBC (including why my payslip, which uses the shortened version of my name didn't match the longer, formal version of my name even though it's obviously the same name), the application has finally gone to "final checks" before acceptance (or rejection, and lots and lots of questions about the property we intend to buy, even though we're not funding it though them). 

I am prone to imagining the worse and am desperately hoping we don't get rejected based on my use of a shorter name at work! Given all the checks we've already gone through, what are these "final checks" likely to involve? It's now been four days - any idea what the time scale for yay or nay might be? 

Thank you!

Wantabeautifulhouse

Do you think there will be any mortgage options available in my circumstances?

My husband earns 42k per annum and assuming the 4.5 rule is accurate, we should be able to borrow 190k.  But we need 300k.

My circumstances:

- Self employed (limited company).
- only 1 years accounts.
- USA client. (Only 1)
- invoice in dollars
- not on a daily rate. I get paid for the work performed or a percentage of the profit of the project. No profit... I don't get paid kinda thing.
- specialised work and if I lose this gig, I can't jump into another similar role easily. Will fall back on my qualification to get another job in the UK.
- turnover was about 200k in first year.
- pay myself 36k per annum as a salary. 
- withdraw dividends.
- SA302 for the last 3 years show earnings of about 100k (salary plus dividends).
- unrelated to my job, I am fully ACCA qualified and I am confident that I can pick up a decent job even if my company does not work out long term.

Will I be able to borrow about 120k on my earnings? I understand if lenders don't think my job is secure enough. 

Does my qualification help to show lenders I can fall back on my qualification and earn at least 30k?

vintagebrighton

Hi, would anyone be able to give me an idea if it's possible for us to get a mortgage? We're in Scotland.

DH aged 62. Employed p/t and freelance income total 18k plus small pension of 4450pa. Will work till at least 70
Me aged 59. Was self employed but ill health meant I had no useful earnings last year. Income PIP and WTC total 11700pa

No debts except DH student loans. No defaults, no bad credit. I was bankrupt in 2008.

The plan would be to buy a property that's more suitable for me to live in. Have an interest only mortgage and then withdraw our pensions in 10 years to repay the capital. This of course, depends on me being able to work again and contribute more to my pension pot. 

We currently live in a LA flat on the 5th floor and have been trying to move for 2 years. I assume we'd have to find a MB and find a mortgage that will accept my benefits as income. 

K_S

Wantabeautifulhouse said:

Do you think there will be any mortgage options available in my circumstances?

My husband earns 42k per annum and assuming the 4.5 rule is accurate, we should be able to borrow 190k.  But we need 300k.

My circumstances:

- Self employed (limited company).
- only 1 years accounts.
- USA client. (Only 1)
- invoice in dollars
- not on a daily rate. I get paid for the work performed or a percentage of the profit of the project. No profit... I don't get paid kinda thing.
- specialised work and if I lose this gig, I can't jump into another similar role easily. Will fall back on my qualification to get another job in the UK.
- turnover was about 200k in first year.
- pay myself 36k per annum as a salary. 
- withdraw dividends.
- SA302 for the last 3 years show earnings of about 100k (salary plus dividends).
- unrelated to my job, I am fully ACCA qualified and I am confident that I can pick up a decent job even if my company does not work out long term.

Will I be able to borrow about 120k on my earnings? I understand if lenders don't think my job is secure enough. 

Does my qualification help to show lenders I can fall back on my qualification and earn at least 30k?

@wantabeautifulhouse You mention that you only have one year accounts but also that you have 3 years of SA302s with salaries and dividends?

Generally speaking, with only one year of trading history and income originating in a non-GBP currency, your options (if any) are likely to be very limited.

Most lenders aren't likely to go into the kind of detail talked about in your post. They will have their separate criteria and as long as you tick those boxes, an application can be submitted. The lower the LTV, the better your chances.

K_S

vintagebrighton said:

Hi, would anyone be able to give me an idea if it's possible for us to get a mortgage? We're in Scotland.

DH aged 62. Employed p/t and freelance income total 18k plus small pension of 4450pa. Will work till at least 70
Me aged 59. Was self employed but ill health meant I had no useful earnings last year. Income PIP and WTC total 11700pa

No debts except DH student loans. No defaults, no bad credit. I was bankrupt in 2008.

The plan would be to buy a property that's more suitable for me to live in. Have an interest only mortgage and then withdraw our pensions in 10 years to repay the capital. This of course, depends on me being able to work again and contribute more to my pension pot. 

We currently live in a LA flat on the 5th floor and have been trying to move for 2 years. I assume we'd have to find a MB and find a mortgage that will accept my benefits as income.

@vintagebrighton With a mix of employment income, pension and benefit income, it should be possible to get a mortgage. Whether the freelance income will be considered or not will depend on the specifics. The 2008 bankruptcy will rule out a small number of lenders, but should not overly impact your options.

The interest-only plan is likely to work only if there is a repayment plan that you can evidence now.

Wantabeautifulhouse

K_S said:

Wantabeautifulhouse said:

Do you think there will be any mortgage options available in my circumstances?

My husband earns 42k per annum and assuming the 4.5 rule is accurate, we should be able to borrow 190k.  But we need 300k.

My circumstances:

- Self employed (limited company).
- only 1 years accounts.
- USA client. (Only 1)
- invoice in dollars
- not on a daily rate. I get paid for the work performed or a percentage of the profit of the project. No profit... I don't get paid kinda thing.
- specialised work and if I lose this gig, I can't jump into another similar role easily. Will fall back on my qualification to get another job in the UK.
- turnover was about 200k in first year.
- pay myself 36k per annum as a salary. 
- withdraw dividends.
- SA302 for the last 3 years show earnings of about 100k (salary plus dividends).
- unrelated to my job, I am fully ACCA qualified and I am confident that I can pick up a decent job even if my company does not work out long term.

Will I be able to borrow about 120k on my earnings? I understand if lenders don't think my job is secure enough. 

Does my qualification help to show lenders I can fall back on my qualification and earn at least 30k?

@wantabeautifulhouse You mention that you only have one year accounts but also that you have 3 years of SA302s with salaries and dividends?

Generally speaking, with only one year of trading history and income originating in a non-GBP currency, your options (if any) are likely to be very limited.

Most lenders aren't likely to go into the kind of detail talked about in your post. They will have their separate criteria and as long as you tick those boxes, an application can be submitted. The lower the LTV, the better your chances.

Thank you. Yes, I had a company with the same activity for 5 years prior but i decided to get back into accounting because I didn't want to work from home anymore at the end of 2019 (and other reasons too). Lol. With the pandemic hitting, working from home was the way to go and I got offered the same opportunity and opened a new company again. 

Do you think my chances increase if I have 2 years accounts? 

We will have 350k deposit on a 650k house in london.

vintagebrighton

K_S said:

vintagebrighton said:

Hi, would anyone be able to give me an idea if it's possible for us to get a mortgage? We're in Scotland.

DH aged 62. Employed p/t and freelance income total 18k plus small pension of 4450pa. Will work till at least 70
Me aged 59. Was self employed but ill health meant I had no useful earnings last year. Income PIP and WTC total 11700pa

No debts except DH student loans. No defaults, no bad credit. I was bankrupt in 2008.

The plan would be to buy a property that's more suitable for me to live in. Have an interest only mortgage and then withdraw our pensions in 10 years to repay the capital. This of course, depends on me being able to work again and contribute more to my pension pot. 

We currently live in a LA flat on the 5th floor and have been trying to move for 2 years. I assume we'd have to find a MB and find a mortgage that will accept my benefits as income.

@vintagebrighton With a mix of employment income, pension and benefit income, it should be possible to get a mortgage. Whether the freelance income will be considered or not will depend on the specifics. The 2008 bankruptcy will rule out a small number of lenders, but should not overly impact your options.

The interest-only plan is likely to work only if there is a repayment plan that you can evidence now.

@K_S  Thank you, very helpful. Would it help our situation to put down a bigger deposit? We were looking at a property for 140k with a deposit of 40k but could increase that if it would make the interest only part easier to get.

K_S

Wantabeautifulhouse said:

K_S said:

Wantabeautifulhouse said:

Do you think there will be any mortgage options available in my circumstances?

My husband earns 42k per annum and assuming the 4.5 rule is accurate, we should be able to borrow 190k.  But we need 300k.

My circumstances:

- Self employed (limited company).
- only 1 years accounts.
- USA client. (Only 1)
- invoice in dollars
- not on a daily rate. I get paid for the work performed or a percentage of the profit of the project. No profit... I don't get paid kinda thing.
- specialised work and if I lose this gig, I can't jump into another similar role easily. Will fall back on my qualification to get another job in the UK.
- turnover was about 200k in first year.
- pay myself 36k per annum as a salary. 
- withdraw dividends.
- SA302 for the last 3 years show earnings of about 100k (salary plus dividends).
- unrelated to my job, I am fully ACCA qualified and I am confident that I can pick up a decent job even if my company does not work out long term.

Will I be able to borrow about 120k on my earnings? I understand if lenders don't think my job is secure enough. 

Does my qualification help to show lenders I can fall back on my qualification and earn at least 30k?

@wantabeautifulhouse You mention that you only have one year accounts but also that you have 3 years of SA302s with salaries and dividends?

Generally speaking, with only one year of trading history and income originating in a non-GBP currency, your options (if any) are likely to be very limited.

Most lenders aren't likely to go into the kind of detail talked about in your post. They will have their separate criteria and as long as you tick those boxes, an application can be submitted. The lower the LTV, the better your chances.

Thank you. Yes, I had a company with the same activity for 5 years prior but i decided to get back into accounting because I didn't want to work from home anymore at the end of 2019 (and other reasons too). Lol. With the pandemic hitting, working from home was the way to go and I got offered the same opportunity and opened a new company again. 

Do you think my chances increase if I have 2 years accounts? 

We will have 350k deposit on a 650k house in london.

@wantabeautifulhouse With 2 years accounts and sub-60% LTV, you should definitely have at least a couple of mainstream options.

K_S

vintagebrighton said:

K_S said:

vintagebrighton said:

Hi, would anyone be able to give me an idea if it's possible for us to get a mortgage? We're in Scotland.

DH aged 62. Employed p/t and freelance income total 18k plus small pension of 4450pa. Will work till at least 70
Me aged 59. Was self employed but ill health meant I had no useful earnings last year. Income PIP and WTC total 11700pa

No debts except DH student loans. No defaults, no bad credit. I was bankrupt in 2008.

The plan would be to buy a property that's more suitable for me to live in. Have an interest only mortgage and then withdraw our pensions in 10 years to repay the capital. This of course, depends on me being able to work again and contribute more to my pension pot. 

We currently live in a LA flat on the 5th floor and have been trying to move for 2 years. I assume we'd have to find a MB and find a mortgage that will accept my benefits as income.

@vintagebrighton With a mix of employment income, pension and benefit income, it should be possible to get a mortgage. Whether the freelance income will be considered or not will depend on the specifics. The 2008 bankruptcy will rule out a small number of lenders, but should not overly impact your options.

The interest-only plan is likely to work only if there is a repayment plan that you can evidence now.

@K_S  Thank you, very helpful. Would it help our situation to put down a bigger deposit? We were looking at a property for 140k with a deposit of 40k but could increase that if it would make the interest only part easier to get.

@vintagebrighton With regard to the portion of loan you want on interest-only, yes a lower-LTV will help with regard to meeting lender criteria for interest only borrowing. However, the bottom line is that it you need to be able to evidence a repayment vehicle that is large enough to cover the interest-only part and meets lender criteria.

Martan7

Hello, I'm trying to get an idea/do a bit of planning towards getting a mortgage, but have no idea what I would be offered or when.

Situation is:
Me and my wife, renting parents house (they've moved abroad) at £700/month
Plan is to buy the house on a concessionary basis, current value is ~£330k discount of £50k, so just over 15%, this would hopefully be the deposit.
I am currently paying off a DMP which I self manage, so have 8 defaults and a couple of arrangements. I'm a year and a bit in, and should be cleared in another 3 years. Debt at the moment is £22k.
Total income for the 2 of us is about £70k, both just from full time employment.
Obviously right now I don't have much of a chance, but what I want to know is realistically how long would we be looking at before we would be able to get a mortgage, and would we need to have any extra deposit on top of the equity?

Thanks very much in advance