Mortgage broker - ask me anything

getmore4less

neogeo said:

K_S said:

neogeo said:

Hi,

I've never used a broker before, but think I may for my next renewal.
In April my current deal expires and I will have £103,000 remaining.
On my salary today I can continue with my current payment and clear the mortgage in 5 years.
I have however received a pay rise which will allow me to clear in 4 years, but this will take all my monthly increase up.
My raise is being processed so I hope to see the first payment at the end of February.

Looking online and applying today I can get 1.55% over four years with Coventry BS (for example), but this is taking my pending raise into account.

Q. How should I go about getting the best rate, Should I apply now with a broker who can maybe help get my pending raise taken into account? If I wait until end of Feb to get my raise, it only leaves me two months to renew - rates will possibly have gone up and experience has shown that two months may also be cutting it fine to renew on the exact renewal date.

Any advice appreciated, thank you!

@neogeo You don't really need a broker to get the best rate. By looking for a 4 year term, you will miss out on a few large lenders who have a minimum term of 5 years for re-mortgages.

Thanks for the response.

My concern is that I would like to pay the mortgage off in four years, but to do this I need to take my pending salary increase into account - I'm thinking a broker would be better placed to find a lender who can take this into account, or at least might know who will/won't accept a letter from my company as evidence of pending salary increase before I start applying and getting turned down?
If I wait until my first pay cheque showing this increase, it will be the end of February and rates may have gone up and I am only 5 weeks from needing to renew.

Do you know if pending salary increases are generally accepted or not?

Longer full term and overpay will achieve the same thing(or close)
Then you can pick the best rates even consider a 5y with flexible payment options  that allow unlimited overpayments or offsets.

Depends if you need the mortgage closed in 4 years or just want low/no amount left in 4 years.

£100k paid over 4 years small difference in rates won't make a massive to total interest.
(0.1% ~£200)

emm12345

Hi. We are looking to buy a £500k flat in London via HTB equity loan. We have 5% deposit, our combined income is £168k. I am about to change jobs in Feb. My partner’s credit file is clean but i have 3 missed payments: 1. Paypal (£60), dec 2020; 2. Very (£5), Jan 2019; 3. AMEX (under £100), May 2018. I have £7k in credit cards and about £1.2k on very/paypal and my partner £10k loan. We reserved a flat until June, planning to apply at the end of March/April. I can reduce my cc to £4.5k and £700 on very, my partner’s loan will reduce a bit. Do we have any chance of being accepted? We have DIP but that was before i discovered late payments on my file. I am so worried, can you advise please?

Kitty97

What are the chances (if any) of getting remortgage by capitalising existing arrears and changing to interest only mortgage with sale of home as repayment vehicle? Credit history pretty rubbish due to a tough few years with serious illness and pandemic but things improving and around 65-70% equity in house. Got around 6 years left on mortgage and would want to downsize in that time anyway but circumstances atm mean we really can’t do that now. Arrears are not much less than remaining mortgage.

K_S

Kitty97 said:

What are the chances (if any) of getting remortgage by capitalising existing arrears and changing to interest only mortgage with sale of home as repayment vehicle? Credit history pretty rubbish due to a tough few years with serious illness and pandemic but things improving and around 65-70% equity in house. Got around 6 years left on mortgage and would want to downsize in that time anyway but circumstances atm mean we really can’t do that now. Arrears are not much less than remaining mortgage.

@kitty97 If you're talking about substantial current mortgage arrears, then most likely the only folk who can do anything re capitalising your arrears is your current lender.

K_S

emm12345 said:

Hi. We are looking to buy a £500k flat in London via HTB equity loan. We have 5% deposit, our combined income is £168k. I am about to change jobs in Feb. My partner’s credit file is clean but i have 3 missed payments: 1. Paypal (£60), dec 2020; 2. Very (£5), Jan 2019; 3. AMEX (under £100), May 2018. I have £7k in credit cards and about £1.2k on very/paypal and my partner £10k loan. We reserved a flat until June, planning to apply at the end of March/April. I can reduce my cc to £4.5k and £700 on very, my partner’s loan will reduce a bit. Do we have any chance of being accepted? We have DIP but that was before i discovered late payments on my file. I am so worried, can you advise please?

@emm12345 If you have a DIP, that's as much assurance as you can get with regard to your credit history.

If you have a correctly keyed in DIP and an H2B ATP, then you should be fine affordability-wise.

emm12345

Thanks a lot for your speedy response. Does it matter that i haven’t told broker about late payments when completing DIP as i only saw late payments on file yesterday? I emailed her today, waiting for a response. I am going crazy from worrying and not knowing. 

D123456789

Hello again. If I change deal with my current lender (move to new fixed rate) is this classed as a new mortgage? Essentially I would like to know if I pay off 10 % overpayment, then move to a new rate, can I pay off 10 % again a month later as it’s a new mortgage or is it the same mortgage with a different rate? On my current deal I can only pay off 10 percent per year. It’s with Nat west.

I have considered changing to repayment or remortgaging for a lower value but been told that’s more complicated. 

K_S

D123456789 said:

Hello again. If I change deal with my current lender (move to new fixed rate) is this classed as a new mortgage? Essentially I would like to know if I pay off 10 % overpayment, then move to a new rate, can I pay off 10 % again a month later as it’s a new mortgage or is it the same mortgage with a different rate? On my current deal I can only pay off 10 percent per year. It’s with Nat west.

I have considered changing to repayment or remortgaging for a lower value but been told that’s more complicated. 

@D123456789 You'll have to check with NatWest to be sure, but off of the top of my head, don't they do a reset on the 'anniversary' of the mortgage rather than 1st Jan?

D123456789

@K_S thanks  for your reply I think they would issue a contract variation so not sure if that would reset the ‘anniversary’ or not ….

K_S

emm12345 said:

Thanks a lot for your speedy response. Does it matter that i haven’t told broker about late payments when completing DIP as i only saw late payments on file yesterday? I emailed her today, waiting for a response. I am going crazy from worrying and not knowing. 

@emm12345 It shouldn't matter too much as the DIP usually goes off of what they see on your report but good that you let your broker know as a few lenders ask specifically about missed payments so you want to get that info right.

In any case, please rest assured that the handful of late payments mentioned will not scupper your chances of getting an H2B mortgage as to lenders it's effectively a 75% LTV mortgage so low-risk as far as they're concerned.