Mortgage broker - ask me anything

K_S

lantanna said:

Hi, 

Hoping to buy spring next year. 

What are my chances of a half decent mortgage ? 

Deposit £26,000. (£16k of that is gifted) 
Salary £32855 
£2500 k debt on 0% credit card
Payday loans Yes but not in last 2 years
one default 5 years old 
missed payments yes but not in last 2 years
Are reasonable rates going to be applicable to me and how much am I likely to be able to borrow

@lantanna Quick thoughts -

- 16k of the deposit being gifted: won't make any material difference

- 2.5k background cc debt: shouldn't make a big difference unless there are other factors

- 2 years clear of payday loans is a plus

- a 5 year old default should have overly impact your chances unless it's very large, related to a secured loan or some other complicating factor

- 2 years clear of missed payments, should be fine on that front.

Overall, based on the limited info in your post, I would expect you to have access to mainstream/mainstream-ish rates and be able to borrow in the region of 4.5-5x your income. With a relatively sizeable deposit of 26k, you're probably looking at an 85% LTV mortgage at most, which is a good place to be in.

lantanna

Thank you KS you do a cracking job keeping us all informed : ) 

Rahven

Hello! Thanks very much for the opportunity to ask a q.
We're in the process of sorting a mortgage now. About 68% LTV. The MSE mortgage finder has a 1.25% Newcastle Building Society deal with zero set-up fees listed. I've mentioned this to our broker, but they say they can't find the deal. Is it possible that the deal is only available to certain brokers, and how would you go about finding out which ones?  

K_S

Rahven said:

Hello! Thanks very much for the opportunity to ask a q.
We're in the process of sorting a mortgage now. About 68% LTV. The MSE mortgage finder has a 1.25% Newcastle Building Society deal with zero set-up fees listed. I've mentioned this to our broker, but they say they can't find the deal. Is it possible that the deal is only available to certain brokers, and how would you go about finding out which ones?  

@rahven If it's the 1.25% no-fee 5-yr fix you're referring to, I'm pretty sure that's a government scheme specific (first homes) product so wouldn't be available for standard purchases.

bobbysox1v

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

Hi, we live in a self built barn on our own land. Worth approx £400000.
To get planning consent we had to agree to an equestrian tie even though we DO NOT run any type of business here. We were also restricted to living on the first floor (cartlodge style barn).

To build the barn we used the proceeds of sale of our last house and my redundancy money.  We also took out a couple of personal loans.

We now want to convert the downstairs into a lounge etc and have been granted permission. 

To do this we need a mortgage for around £75000.

Trouble is, we don't seem to be able to get a mortgage as we have restricted use but no business accounts.

Help !!

K_S

bobbysox1v 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

Hi, we live in a self built barn on our own land. Worth approx £400000.
To get planning consent we had to agree to an equestrian tie even though we DO NOT run any type of business here. We were also restricted to living on the first floor (cartlodge style barn).

To build the barn we used the proceeds of sale of our last house and my redundancy money.  We also took out a couple of personal loans.

We now want to convert the downstairs into a lounge etc and have been granted permission. 

To do this we need a mortgage for around £75000.

Trouble is, we don't seem to be able to get a mortgage as we have restricted use but no business accounts.

Help !!

@bobbysox1v Your case is clearly specialist (the equestrian tie with no tied activity, self-built property, restrictions on living space, raising capital for development, etc). On the plus side, you're only looking for 75k on a property worth 400k so that should help.

Based on the very limited info in your post, and assuming you aren't expecting Halifax-Nationwide rates, all I can suggest is approaching a few specialist brokers who will know how to approach the case. Do make sure you mention the equestrian-tie and lack of equestrian activity right at the outset.

If you have already done that and come up against multiple can't-helps, I'm afraid it might be a dead-end.

jonk524

Hello K-S thanks for all the advice you give.
i am 64 retired and live in a rental property but wish to purchase my own house.
MY annual income is £40000 from a drawdown pension but i would be able to lower this by £10000 once I buy my own place and reduce it by another £9000 once I receive my state pension in August 2023.
Will I be able to obtain an interest only mortgage of £50000 with a deposit £250000, the mortgage would be cleared when i pass away with funds from my pension pot.
Thank you for your help.

Aliliva

Hi K_S,

I have a quick question on switching from a residential to a BtL mortgage at the end of the mortgage fix.

I am looking to start renting out my place roughly in the month my residential mortgage fix comes to an end - should I try and fix again to a residential mortgage with the same lender ASAP, then ask for Consent to Let, or is it better if I get a BtL mortgage directly? I cannot apply for the latter yet, as we still live in my property and don't have a completion date for our onward purchase yet, so the mortgage will have to arranged possibly after the fix is ended.

Hope it makes sense and thank you!

K_S

Aliliva said:

Hi K_S,

I have a quick question on switching from a residential to a BtL mortgage at the end of the mortgage fix.

I am looking to start renting out my place roughly in the month my residential mortgage fix comes to an end - should I try and fix again to a residential mortgage with the same lender ASAP, then ask for Consent to Let, or is it better if I get a BtL mortgage directly? I cannot apply for the latter yet, as we still live in my property and don't have a completion date for our onward purchase yet, so the mortgage will have to arranged possibly after the fix is ended.

Hope it makes sense and thank you!

@aliliva It depends on the specifics but very generally speaking, a let-to-buy mortgage is what most people would consider in your situation. So you would simultaneously complete on your resi-to-BTL remortgage and your onward purchase. If you're looking at no more than a month or so on SVR, it may not be the worst thing in the world to simply wait it out.

Alternatively, if you are lucky enough to be with a lender (like Nationwide) that offers no-fee no-ERC trackers, you could consider a product switch to a tracker and then a let-to-buy as above.

The CTL is definitely an option, but you will need to do the numbers (some lenders will tack on an interest-rate surcharge which negates any savings), ask about your specific lender's policy and then weigh up the pros and cons.

Aliliva

K_S said:

Aliliva said:

Hi K_S,

I have a quick question on switching from a residential to a BtL mortgage at the end of the mortgage fix.

I am looking to start renting out my place roughly in the month my residential mortgage fix comes to an end - should I try and fix again to a residential mortgage with the same lender ASAP, then ask for Consent to Let, or is it better if I get a BtL mortgage directly? I cannot apply for the latter yet, as we still live in my property and don't have a completion date for our onward purchase yet, so the mortgage will have to arranged possibly after the fix is ended.

Hope it makes sense and thank you!

@aliliva It depends on the specifics but very generally speaking, a let-to-buy mortgage is what most people would consider in your situation. So you would simultaneously complete on your resi-to-BTL remortgage and your onward purchase. If you're looking at no more than a month or so on SVR, it may not be the worst thing in the world to simply wait it out.

Alternatively, if you are lucky enough to be with a lender (like Nationwide) that offers no-fee no-ERC trackers, you could consider a product switch to a tracker and then a let-to-buy as above.

The CTL is definitely an option, but you will need to do the numbers (some lenders will tack on an interest-rate surcharge which negates any savings), ask about your specific lender's policy and then weigh up the pros and cons.

thank you so much!

Just to clarify, the onward purchase will be entirely in my partner's name and completely disconnected from my current property (one less headache for us all). Am I right thinking that even in this case the best option would be asking my current lender to give me CLT and, either when my current fix terminates or, if I'm already in the SVR period, when the tenants move in, switch to a BTL product? or is there a chance that if I fix again on resi with my current lender they will give me CTL basically from day zero of the new fix?