Mortgage broker - ask me anything

K_S

kokolino23 said:

@K_S most probably a remortgage (changing to a new lender), as this will increase our chances to find a better deal. A bit tricky because we'll increase our savings by the end of September so I don't know exactly the amount of money involved for remortgage. We can pay a lump sum at the end of our current fix term.

@kokolino23 You don't really need an exact number, within a few thousand quid should be fine. And in any case that'll likely have a material impact only if it means a different LTV band.

As for the lump sum, you could pay it through the remortgage process via your solicitor as well. On the completion date (usually the first working day after your fixed period) the solicitor will use these funds along with the new mortgage to pay off the current lender.

Heinlein

I have a mortgage with Natwest that I want to port to a new property (fixed rate period doesn't end til 2026.) I've just been rejected at decision in principle stage because of my credit file. I have two historical defaults (credit cards) which are due to drop off by July this year. I have no other defaults and have not made a late payment for over 3 years. If I were to pay the default accounts off, borrowing from family, would that improve my chances or make little difference? I guess I'm asking whether it would make a difference for NatWest in particular, if you happen to know, but also with most lenders. I'm conscious if I leave them then they're gone from my credit file by July, if I pay them off then they sit on there as satisfied for another 6 years. I know I can apply and ask them to look at it on a special basis but I don't know whether to pay off those two default debts first. Thank you.  

K_S

Heinlein said:

I have a mortgage with Natwest that I want to port to a new property (fixed rate period doesn't end til 2026.) I've just been rejected at decision in principle stage because of my credit file. I have two historical defaults (credit cards) which are due to drop off by July this year. I have no other defaults and have not made a late payment for over 3 years. If I were to pay the default accounts off, borrowing from family, would that improve my chances or make little difference? I guess I'm asking whether it would make a difference for NatWest in particular, if you happen to know, but also with most lenders. I'm conscious if I leave them then they're gone from my credit file by July, if I pay them off then they sit on there as satisfied for another 6 years. I know I can apply and ask them to look at it on a special basis but I don't know whether to pay off those two default debts first. Thank you.  

@heinlein I just want to point out that the defaulted account/s will drop off your credit record six years after the default date. As far as the drop-off is concerned, it doesn’t really matter what happens after the default, whether you pay it off in full, part-pay it, start paying it of in instalments, a partial settlement, or just ignore it, the account will still drop off your credit files after six years from the default date.

NatWest doesn't have explicit criteria re defaults, it's just subject to 'credit-score'. I can't really comment on whether or not it would make a difference to NatWest and/or other mainstream lenders as that depends on the rest of the scenario as well.

If you're only considering a home move at present, and the NatWest ERCs are sizeable enough to stop you from using another lender, it might make sense to wait till the defaults drop of in July and then try again.

I can't speak for NatWest specifically but some mainstream lenders do have some amount of flexibility to make porting cases fit. I don't know how it works direct but it may be worth speaking to them. Good luck! 

riderjules

Hello,

We are planning to apply for additional mortgage borrowing loan to recoup our savings that have gone into renovation/extension work on our property. We meet the affordability criteria, but want the property revalued to get a higher loan. 

1) How will our lender decide the new property value (there's not a huge amount of similar properties recently sold to compare to). Aside from increase in space due to extension, will they take into account overall design/finish, increased insulation (Victorian property), re-wiring, re-plumbing, underfloor heating, more light via rooflights and additional glazing, walk-in shower, etc? 

2) Is there anything we should prepare for in advance before we apply - e.g. should we get valuations from estate agents to give them as an indication? Or is that pointless? 

3) Will the bank ask/care how much we actually spent on the works?

K_S

riderjules said:

Hello,

We are planning to apply for additional mortgage borrowing loan to recoup our savings that have gone into renovation/extension work on our property. We meet the affordability criteria, but want the property revalued to get a higher loan. 

1) How will our lender decide the new property value (there's not a huge amount of similar properties recently sold to compare to). Aside from increase in space due to extension, will they take into account overall design/finish, increased insulation (Victorian property), re-wiring, re-plumbing, underfloor heating, more light via rooflights and additional glazing, walk-in shower, etc? 

2) Is there anything we should prepare for in advance before we apply - e.g. should we get valuations from estate agents to give them as an indication? Or is that pointless? 

3) Will the bank ask/care how much we actually spent on the works?

@riderjules         

1. For additional borrowing requests, the lender will normally use an indexed valuation (last valuation at purchase/remortgage plus an automatic uplift based on the valuation index for that part of the country). To take the changes to the property into account, you may have the option to request for a full valuation, just give them a ring and ask. The vast majority of any valuation uplift will be down to increased living space. The rest may have a marginal impact, if that. 

2. The valuation will be based solely on the one instructed by the lender. Just make sure you insist (if at all possible) on an internal inspection valuation.

3. No.

Heinlein

Thank you, K_S, that's really good to know, I had picked up totally the wrong impression about paying off a default then. This thread is a great resource.  

riotlady

Hi We are currently paying a good chunk in nursery fees each month but this will end when our mortgage starts- we're planning on moving to the town where my parents live so they'll be helping us with childcare and our daughter will also be starting school. Is this something lenders will take into account or do they only look at current numbers? 

K_S

riotlady said:

Hi We are currently paying a good chunk in nursery fees each month but this will end when our mortgage starts- we're planning on moving to the town where my parents live so they'll be helping us with childcare and our daughter will also be starting school. Is this something lenders will take into account or do they only look at current numbers? 

@riotlady Generally speaking, if your childcare costs will stop in the new house and the explanation provided for the same is plausible, most mainstream lenders will consider leaving it out of affordability calcs.

riotlady

@K_S thanks! 

chrmc

We have an application in with NatWest at the moment and the Underwriters have came back with a few queries, they want to see evidence of my bonus which is fair enough but they've also asked us to explain some transactions on our bank statements such as Amazon Prime £7.99 p/m, a payment to River Island £80 (which was a christmas present) and a car parking charge (I pre-pay £50 of parking for work every other month).

It seems very picky to me and getting us a bit nervous, is this a bad sign?