Mortgage broker - ask me anything

K_S

bubby08 said:

Apologies auto correct went a bit crazy!

Hi K_S I am aiming for a remortgage on a mortgage-less property. My earnings come from basic salary and company dividends, however my dividends have gone up over the last year or so, but I only plan to use my earning figures from a couple of years ago as these are the figures I have returns for. 

Do you have an ideas of what income and expenditure I will need to demonstrate or they will be looking for on my statements?

thanks in advance 

@bubby08 The specifics may vary across lenders, but very generally speaking, as a ltd. co. director if you are looking to use sal+divs for affordability, as a starting point these numbers will be taken off of your SA302s for 2020-21 and 2019-20. It'll usually be the average or (if the latest year numbers are lower) then the latest year's. 

There will be different add-ons to the above depending on the lender such as - that will consider ignoring the 20/21 numbers if they were covid affected, lenders that will adjust for any covid grants or CJRS income, lenders that will ask for accountant projections for current year, etc etc etc. There's a wide range of different criteria to fit pretty much any type of ltd. co. income structure including those that don't extract a lot of cash as dividends.

If you are a contractor/PSC and your working arrangements are relatively straightforward, it may be simpler to go with a lender who will calculate affordability based on your day-rate.

K_S

onejontwo said:

Hi, we are thinking of moving house this year to a different area but as I remember last time we moved 20+ years ago we firstly found a house we liked got into negotiation with the sellers then put our house on the market. Whereas my daughter recently moved house but was told she had to put her house on the market BEFORE she could actually view other houses, which worked out that she accepted an offer on her house before she had actually found a place to move to. As her house moving journey was the opposite of ours where do stand today ie. view first os sell first? Thanks in anticipation.

@onejontwo Afaik, EAs are unlikely to take your offer seriously unless you have a buyer for your property.

junglist_matty

If you switch your existing mortage whilst still within a fixed deal period (which has an early repayment charge), exactly when is the ERC due?

1. Before the mortgage is transferred (i.e. lender makes contact to request the ERC payment "up front"; maybe on the morning of the transfer)
2. After the mortgage has been transferred (i.e. they will send an invoice requesting the ERC)
3. Conditionally during the transfer process (i.e. your mortgage can't be transferred until you pay the ERC for your existing mortgage on the date of the transfer)
4. Some other time (how, or what happens?)

I need to know when I need my funds to be available in my bank to cover an ERC; if it makes any difference, my current lender is HSBC.

bubby08

K_S said:

bubby08 said:

Apologies auto correct went a bit crazy!

Hi K_S I am aiming for a remortgage on a mortgage-less property. My earnings come from basic salary and company dividends, however my dividends have gone up over the last year or so, but I only plan to use my earning figures from a couple of years ago as these are the figures I have returns for. 

Do you have an ideas of what income and expenditure I will need to demonstrate or they will be looking for on my statements?

thanks in advance 

@bubby08 The specifics may vary across lenders, but very generally speaking, as a ltd. co. director if you are looking to use sal+divs for affordability, as a starting point these numbers will be taken off of your SA302s for 2020-21 and 2019-20. It'll usually be the average or (if the latest year numbers are lower) then the latest year's. 

There will be different add-ons to the above depending on the lender such as - that will consider ignoring the 20/21 numbers if they were covid affected, lenders that will adjust for any covid grants or CJRS income, lenders that will ask for accountant projections for current year, etc etc etc. There's a wide range of different criteria to fit pretty much any type of ltd. co. income structure including those that don't extract a lot of cash as dividends.

If you are a contractor/PSC and your working arrangements are relatively straightforward, it may be simpler to go with a lender who will calculate affordability based on your day-rate.

Thank you so much K_S in terms of the remortgage the property has no existing mortgage and I am probably looking to only remortgage 55% of its value. I hope earning shouldn’t be an issue. Would the lender criteria for me be  different than for those looking to buy?

K_S

bubby08 said:

K_S said:

bubby08 said:

Apologies auto correct went a bit crazy!

Hi K_S I am aiming for a remortgage on a mortgage-less property. My earnings come from basic salary and company dividends, however my dividends have gone up over the last year or so, but I only plan to use my earning figures from a couple of years ago as these are the figures I have returns for. 

Do you have an ideas of what income and expenditure I will need to demonstrate or they will be looking for on my statements?

thanks in advance 

@bubby08 The specifics may vary across lenders, but very generally speaking, as a ltd. co. director if you are looking to use sal+divs for affordability, as a starting point these numbers will be taken off of your SA302s for 2020-21 and 2019-20. It'll usually be the average or (if the latest year numbers are lower) then the latest year's. 

There will be different add-ons to the above depending on the lender such as - that will consider ignoring the 20/21 numbers if they were covid affected, lenders that will adjust for any covid grants or CJRS income, lenders that will ask for accountant projections for current year, etc etc etc. There's a wide range of different criteria to fit pretty much any type of ltd. co. income structure including those that don't extract a lot of cash as dividends.

If you are a contractor/PSC and your working arrangements are relatively straightforward, it may be simpler to go with a lender who will calculate affordability based on your day-rate.

Thank you so much K_S in terms of the remortgage the property has no existing mortgage and I am probably looking to only remortgage 55% of its value. I hope earning shouldn’t be an issue. Would the lender criteria for me be  different than for those looking to buy?

@bubby08 Largely similar. One of the main ones will be that the purpose of the funds you're raising will need to be acceptable to the specific lender. Obviously for a purchase that's not relevant.

bubby08

K_S said:

bubby08 said:

K_S said:

bubby08 said:

Apologies auto correct went a bit crazy!

Hi K_S I am aiming for a remortgage on a mortgage-less property. My earnings come from basic salary and company dividends, however my dividends have gone up over the last year or so, but I only plan to use my earning figures from a couple of years ago as these are the figures I have returns for. 

Do you have an ideas of what income and expenditure I will need to demonstrate or they will be looking for on my statements?

thanks in advance 

@bubby08 The specifics may vary across lenders, but very generally speaking, as a ltd. co. director if you are looking to use sal+divs for affordability, as a starting point these numbers will be taken off of your SA302s for 2020-21 and 2019-20. It'll usually be the average or (if the latest year numbers are lower) then the latest year's. 

There will be different add-ons to the above depending on the lender such as - that will consider ignoring the 20/21 numbers if they were covid affected, lenders that will adjust for any covid grants or CJRS income, lenders that will ask for accountant projections for current year, etc etc etc. There's a wide range of different criteria to fit pretty much any type of ltd. co. income structure including those that don't extract a lot of cash as dividends.

If you are a contractor/PSC and your working arrangements are relatively straightforward, it may be simpler to go with a lender who will calculate affordability based on your day-rate.

Thank you so much K_S in terms of the remortgage the property has no existing mortgage and I am probably looking to only remortgage 55% of its value. I hope earning shouldn’t be an issue. Would the lender criteria for me be  different than for those looking to buy?

@bubby08 Largely similar. One of the main ones will be that the purpose of the funds you're raising will need to be acceptable to the specific lender. Obviously for a purchase that's not relevant.

Thank you K_S, it is for renovations, will I need to demonstrate this? 

Many thanks 

msaverpenny93

Can you explain what the markers are on a credit report please. It’s not clear online what the markers are for example what do payday loans show as, what do personal loans show as?

K_S

msaverpenny93 said:

Can you explain what the markers are on a credit report please. It’s not clear online what the markers are for example what do payday loans show as, what do personal loans show as?

@msaverpenny93 It's not consistent across credit bureaus and pdl providers but very generally speaking they may show on the file as “advance against income”, or other similar phrases. It's not always the case though, sometimes they just show as a loan.

In any case, for someone manually looking at the file it's fairly straightforward to identify pdls either though the lender name or the approx interest rate derived from the loan size, term and monthly payments, all of which is usually noted.

K_S

bubby08 said:

K_S said:

bubby08 said:

K_S said:

bubby08 said:

Apologies auto correct went a bit crazy!

Hi K_S I am aiming for a remortgage on a mortgage-less property. My earnings come from basic salary and company dividends, however my dividends have gone up over the last year or so, but I only plan to use my earning figures from a couple of years ago as these are the figures I have returns for. 

Do you have an ideas of what income and expenditure I will need to demonstrate or they will be looking for on my statements?

thanks in advance 

@bubby08 The specifics may vary across lenders, but very generally speaking, as a ltd. co. director if you are looking to use sal+divs for affordability, as a starting point these numbers will be taken off of your SA302s for 2020-21 and 2019-20. It'll usually be the average or (if the latest year numbers are lower) then the latest year's. 

There will be different add-ons to the above depending on the lender such as - that will consider ignoring the 20/21 numbers if they were covid affected, lenders that will adjust for any covid grants or CJRS income, lenders that will ask for accountant projections for current year, etc etc etc. There's a wide range of different criteria to fit pretty much any type of ltd. co. income structure including those that don't extract a lot of cash as dividends.

If you are a contractor/PSC and your working arrangements are relatively straightforward, it may be simpler to go with a lender who will calculate affordability based on your day-rate.

Thank you so much K_S in terms of the remortgage the property has no existing mortgage and I am probably looking to only remortgage 55% of its value. I hope earning shouldn’t be an issue. Would the lender criteria for me be  different than for those looking to buy?

@bubby08 Largely similar. One of the main ones will be that the purpose of the funds you're raising will need to be acceptable to the specific lender. Obviously for a purchase that's not relevant.

Thank you K_S, it is for renovations, will I need to demonstrate this? 

Many thanks 

@bubby08 Will depend on the lender, loan size, any other relevant background details.

jeff23

Hey,

my wife and I bought a house using the help to buy scheme September 2019 so just over 2 years ago. We have been looking to purchase a property to rent out and have managed to save 25%. With us having used the help to buy scheme would that restrict us from buying a buy to let property using a buy to let mortgage at this point? 

Thanks