Mortgage broker - ask me anything

emm12345

K_S said:

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.

Thank you so much, definitely feel better about it! 

Kitty97

K_S said:

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.

We’ve asked them to do that and they’re refusing even though we can more than afford interest only payments and would be able to pay towards capital too with lump sums as and when poss. Lender wants to repossess rather than work with us 😕

K_S

Kitty97 said:

K_S said:

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.

We’ve asked them to do that and they’re refusing even though we can more than afford interest only payments and would be able to pay towards capital too with lump sums as and when poss. Lender wants to repossess rather than work with us 😕

@kitty97 I'm sorry to hear that. Given the seriousness of the situation, you should look at getting proper advice from a debt advice charity. Good luck!
https://england.shelter.org.uk/housing_advice/repossession/how_to_deal_with_mortgage_arrears

neogeo

getmore4less said:

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)

Hi, being so close to being mortgage free, and being mortgage free opening up so many personal options, is why I would like to get the mortgage paid off asap.
I considered a five year mortgage and over payments to clear it sooner but assumed two things:
1. I could only see 10% max over-payments allowed
2. If I look to clear the mortgage within whatever term I take (my final remortgage for this outstanding balance), any over-payment will mean the mortgage will ultimately finish early, meaning an early repayment charge
Or have I got both of those assumptions incorrect?

getmore4less

neogeo said:

getmore4less said:

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)

Hi, being so close to being mortgage free, and being mortgage free opening up so many personal options, is why I would like to get the mortgage paid off asap.
I considered a five year mortgage and over payments to clear it sooner but assumed two things:
1. I could only see 10% max over-payments allowed
2. If I look to clear the mortgage within whatever term I take (my final remortgage for this outstanding balance), any over-payment will mean the mortgage will ultimately finish early, meaning an early repayment charge
Or have I got both of those assumptions incorrect?

Depends on lender some the ERC is on initial balance, some just what's left let the normal payments finish early.
Eg.
FD allow unlimited overpayments but not paying off in full(ERC on initial balance) you can run the balance down.

Barclays you can do 3x normal payment and 10% without ERC.

Any offset allows 100% offset net zero payment from income

Some lenders have option of more flexible overpayment for a slightly higher rate.
Some lenders allow 10% of initial amount each year.

Does the mortgage have to be paid off completely or would just having a small outstanding balance with tiny payment do the job.

The term/payment suggest maybe high rate tax there may be better options than paying the mortgage of quickly.

Stauncho

Hi I have had to temporarily pay for childcare the last couple of months as my mum, who is a retired nurse, helped out with the vaccine drive. She is no longer doing this and is back looking after the kid a couple of days while we work

Me and my wife are about to apply for a mortgage & I understand that a lender may ask for the last 3 months bank statements which will show 2 payments to a childcare provider that will not be happening again. The last thing I want to happen is for these payments to negatively impact out affordability. 

Is this something that a lender would include as part of my affordability even though there will be no further payments??

Many thanks. 

K_S

Stauncho said:

Hi I have had to temporarily pay for childcare the last couple of months as my mum, who is a retired nurse, helped out with the vaccine drive. She is no longer doing this and is back looking after the kid a couple of days while we work

Me and my wife are about to apply for a mortgage & I understand that a lender may ask for the last 3 months bank statements which will show 2 payments to a childcare provider that will not be happening again. The last thing I want to happen is for these payments to negatively impact out affordability. 

Is this something that a lender would include as part of my affordability even though there will be no further payments??

Many thanks. 

@Stauncho Tbh nowadays it's quite rare that mainstream lenders ask for 3 months bank statements as they have other sources of data.

If you no longer have any ongoing childcare costs then it shouldn't be included as part of the affordability calcs.

simon_or

What an amazing thread! Wish I'd known about this the last time around.

I've bookmarked it for my mortgage coming up soon. 

Ramie2021

Hi, a few questions if I may:

1) when is a gift not a gift for a mortgage application/deposit? For example, if it is coming for an account I am named on would it still be considered a gift?


2) How many months do typically lenders look back on bank statements?

Thank you

K_S

Ramie2021 said:

Hi, a few questions if I may:

1) when is a gift not a gift for a mortgage application/deposit? For example, if it is coming for an account I am named on would it still be considered a gift?


2) How many months do typically lenders look back on bank statements?

Thank you

@Ramie2021

1) If you're asking how to make a gifted deposit look like it isn't, I can't answer that question Generally speaking, for a deposit to not be gifted, it needs to come from the applicants' savings, earnings, etc.

2) Typically, a lot of mainstream lenders nowadays don't ask for bank statements at all. Where they do it's usually a month stretching up to 3 months.