Mortgage broker - ask me anything

K_S

toria12386 said:

I started another thread before seeing this one, just a quick question.

do you know if Coventry will accept payslips or statement or earning if I can’t get my p60?

I have been on maternity and seem to have lost mine I also can’t get back into work because of COVID to print it out 

thank you 

@toria12386 I can't comment on Coventry, your specific case or how it works direct. But generally speaking, on the odd occasion that a client cannot produce a P60 and the lender requires it as part of standard documentation, I've always been able to get them to accept alternative documentation as long as it confirms the information that a P60 would.

toria12386

K_S said:

toria12386 said:

I started another thread before seeing this one, just a quick question.

do you know if Coventry will accept payslips or statement or earning if I can’t get my p60?

I have been on maternity and seem to have lost mine I also can’t get back into work because of COVID to print it out 

thank you 

@toria12386 I can't comment on Coventry, your specific case or how it works direct. But generally speaking, on the odd occasion that a client cannot produce a P60 and the lender requires it as part of standard documentation, I've always been able to get them to accept alternative documentation as long as it confirms the information that a P60 would.

Thank you so much I think this is all they are waiting for I was worried this would stop our application completely.

really appreciate your advice  

Flyinghigh

Good afternoon, Do you think nationwide would accept me for helping hand with a satisfied default or partially satisfied default that at time of application will be 3 years old?

K_S

Flyinghigh said:

Good afternoon, Do you think nationwide would accept me for helping hand with a satisfied default or partially satisfied default that at time of application will be 3 years old?

@Flyinghigh Nationwide doesn't have an explicit yes/no criteria for defaults. In theory, all that is taken into account during the "credit-scoring" done by the system when you click 'submit' on an AIP application.

As you would expect, the lender "credit-scoring" (not to be confused with the experian/clearscore/credit-karma score) threshold for the Helping Hand product is higher than the standard range.

If your reason for using HH is the 5.5x multiple, even if Nationwide doesn't work out, there are a couple of other lenders who may consider lending up to 5.5x with a 3+ year old satisfied default.

Flyinghigh

K_S said:

Flyinghigh said:

Good afternoon, Do you think nationwide would accept me for helping hand with a satisfied default or partially satisfied default that at time of application will be 3 years old?

@Flyinghigh Nationwide doesn't have an explicit yes/no criteria for defaults. In theory, all that is taken into account during the "credit-scoring" done by the system when you click 'submit' on an AIP application.

As you would expect, the lender "credit-scoring" (not to be confused with the experian/clearscore/credit-karma score) threshold for the Helping Hand product is higher than the standard range.

If your reason for using HH is the 5.5x multiple, even if Nationwide doesn't work out, there are a couple of other lenders who may consider lending up to 5.5x with a 3+ year old satisfied default.

Thank you for your reply, I may not need to use helping hand just a option i can bare in mind whilst looking for a property. Thank you again for your help.

Ftba.d

K_S said:

@Ftba.d Without going into too much detail, it looks like you're aiming to do what's called a let-to-buy in a few years. Which is essentially remortgaging your flat to a BTL mortgage and simultaneously taking out a new residential mortgage to buy your next home. The 2 mortgages can be with the same lender, though usually it's with 2 different lenders.

Assuming that you'll have at least 20-25% equity in the flat and are looking to put it on a mainstream interest-only BTL mortgage, the impact on your residential affordability should be minimal or none. All it needs is the right lender for each of the mortgages and the estimated rent to more than cover the mortgage plus expenses of running the BTL flat.

I hope that makes sense.

To maximise your options, in the intervening two years you could focus on building equity in the flat, saving up for a deposit, etc.

Thanks for this great info !

Researched the let to buy … I see it’s a way of paying off the interest on the property and renting it out to make a bit of profit to help pay the mortgage on a new residential mortgage .

Can I pick your brains on a couple of things :

1. If I were to show I have a rent to buy and will take home (hopefully ) some profit each month , would this mean lenders may lend me for the residential mortgage I will be going for ? As ideally I would be able to make larger monthly mortgage payments due to making a bit of money on the flat I was letting out . So for example lenders seem to lend me , based on my income , a maximum of £340,000… with a let to buy mortgage would this still be the case or would they be willing to lend me more ? Or less the case may be ???

I’m suspecting the answer to the above is no as it wouldn’t be deemed as a guaranteed income as there could be periods without tenants etc ? 

2. If I do a let to buy on my property on a mainstream interest only mortgage and the property price goes up in a couple of years … do I profit on this ?  For example . Let’s say I have 72 grand equity in the flat . The flat is currently valued at £385,000. I do a let to buy on the flat and a get a residential mortgage elsewhere . Three years time the flat is valued at 400 grand . Would I benefit form the 15 grand added value . I’m guessing yes?

Sorry if the questions are very basic and obvious , I always find this side of things quite complex .

thanks in advance for all your help .

K_S

@ftba.d 

1. Very unlikely before the property is let. Once you have a history of rental income and SA302s to evidence profits, there are lenders who will consider the rental profit as secondary income for affordability subject to the numbers adding up.

2. First off, if you have less than 25% equity in the property you may struggle to remortgage to a mainstream BTL product when you do the let-to-buy. If your equity goes up in the property over time, you could "profit" at remortgage time by reducing mortgage costs through a lower LTV, release some of the equity, etc. To get the profit free of any strings in your bank account, you'd need to sell it.

mcfly2015

Hi just looking for some advice…..

Fixed mortgage comes to an end on 30/4/22. (no ERC if staying with same lender and taking on a new mortgage in last 90 days of fixed term)

Looking to move to larger property and want to get the process started sooner rather than later.

Factors I want advice on –

I recently changed employer (Nov 21) so only have two payslips to date – should I wait to get a few more payslips before doing anything? It's a permanent position with a reputable business in a solid industry.

I have a relatively small loan (around £6k) outstanding and around £3k on a credit card (0% interest). I can pay off both of these from savings right now if I need to – would that be seen as a good or a bad thing from a mortgage application perspective in the near future? Based on figures below would I need to pay these off to get the mortgage amount required?

No adverse credit history.

For completeness, likely purchase values etc below.

Purchase Price - £500k-£525k

Mortgage required - £400k-£425k

 

Basic salary + car allowance - £91k – ish

Annual bonus £7.5k

thanks!

K_S

mcfly2015 said:

Hi just looking for some advice…..

Fixed mortgage comes to an end on 30/4/22. (no ERC if staying with same lender and taking on a new mortgage in last 90 days of fixed term)

Looking to move to larger property and want to get the process started sooner rather than later.

Factors I want advice on –

I recently changed employer (Nov 21) so only have two payslips to date – should I wait to get a few more payslips before doing anything? It's a permanent position with a reputable business in a solid industry.

I have a relatively small loan (around £6k) outstanding and around £3k on a credit card (0% interest). I can pay off both of these from savings right now if I need to – would that be seen as a good or a bad thing from a mortgage application perspective in the near future? Based on figures below would I need to pay these off to get the mortgage amount required?

No adverse credit history.

For completeness, likely purchase values etc below.

Purchase Price - £500k-£525k

Mortgage required - £400k-£425k

Basic salary + car allowance - £91k – ish

Annual bonus £7.5k

thanks!

@mcfly2015 Based on the limited info in your post -

New job - won't make any material difference for mainstream lending. Not all lenders will consider the bonus from your current employer without a 2 year track record or it being contractually guaranteed. 

Background debt - as long as you aren't term limited due to age, I wouldn't expect the debt levels mentioned to have a material impact on your max borrowing at 80% LTV. 

Just play around with a few lender affordability calcs to see how the numbers stack up.
https://online.accordmortgages.com/public/mortgages/quick_enquiry.do
https://www.santanderforintermediaries.co.uk/calculators-and-forms/affordability/

mcfly2015

K_S said:

mcfly2015 said:

Hi just looking for some advice…..

Fixed mortgage comes to an end on 30/4/22. (no ERC if staying with same lender and taking on a new mortgage in last 90 days of fixed term)

Looking to move to larger property and want to get the process started sooner rather than later.

Factors I want advice on –

I recently changed employer (Nov 21) so only have two payslips to date – should I wait to get a few more payslips before doing anything? It's a permanent position with a reputable business in a solid industry.

I have a relatively small loan (around £6k) outstanding and around £3k on a credit card (0% interest). I can pay off both of these from savings right now if I need to – would that be seen as a good or a bad thing from a mortgage application perspective in the near future? Based on figures below would I need to pay these off to get the mortgage amount required?

No adverse credit history.

For completeness, likely purchase values etc below.

Purchase Price - £500k-£525k

Mortgage required - £400k-£425k

Basic salary + car allowance - £91k – ish

Annual bonus £7.5k

thanks!

@mcfly2015 Based on the limited info in your post -

New job - won't make any material difference for mainstream lending. Not all lenders will consider the bonus from your current employer without a 2 year track record or it being contractually guaranteed. 

Background debt - as long as you aren't term limited due to age, I wouldn't expect the debt levels mentioned to have a material impact on your max borrowing at 80% LTV. 

Just play around with a few lender affordability calcs to see how the numbers stack up.

Thanks so much for the quick response. The first bonus payment is contractually guaranteed at the end of April '22. Future bonus payments then become annual and variable beyond that.

In terms of age-limited, I'm mid thirties and looking at a 25 year term so assume no issues there.

Checked out the calculators and results looked positive. My biggest worry was the recent job change but glad to hear this shouldn't have a negative impact!