Mortgage broker - ask me anything

K_S

becky_rtw said:

Quick question. 

We own our building outright. Its a flat and part commercial. Value has been done by a chartered surveyor at £700k. Could we get a mortgage to buy a second place of £500k? Or does that only apply on the flat? Its freehold. 

We could do 20% deposit, possibly more. 

Ultimate aim is to sell the commercial business + property and buy, but this process is slow (possibly another year) so I'd be happy to pay a mortgage for this time + fees for paying off the mortgage early. Bridging loans seem too short a period for our purposes. 

Just exploring options at this stage. 

@becky_rtw Sorry if I've got this wrong - are you asking if you can buy a 500k property with a 20% deposit (so borrowing 400k) on the basis of this part-commercial property as security? If so, that is unlikely to be possible. For most non-bridge short/medium term residential lending, you will likely need to be able to demonstrate some form of income which supports a 400k mortgage. Almost all lending for the purpose of buying a house to live-in is regulated, so lenders have to tick a lot of boxes before they can lend.

Alternatively, depending on the kind of income you have from the business, you could look at trying to release 400k (< 60% LTV) on the unencumbered 700k part-commercial property and then using the released cash to buy a home to live in outright. The exact options (if any) will also depend upon multiple factors (over and above your personal financial circumstances) such as whether you have any income from the property, how substantial the commercial element is, kind of commercial business, etc.

To quote an example I had a client who leased a part-commercial building (supermarket on ground floor that was run as a business by the applicant and a flat above it which the applicant sublet out) and wanted a mortgage to buy the property from the LL who was looking to sell. I could only get the applicant a commercial mortgage - noticeably higher rates than mainstream residential, exit fees, high conveyancing costs, commercial terms, etc.

Just to be clear, I'm not saying that you will need a commercial mortgage or that you will get what you need, the example was simply to illustrate a potential avenue.

I'm probably stating the obvious here, but if it's only a year away it might just be easier to wait till the property was sold. And you're right, bridging would be a very expensive (and potentially risky) option if you estimate the sale to take another year.

becky_rtw

Thanks for your reply KS. Very detailed. 

We both also work full time, but one of us is self employed. I can raise a £270k mortgage on my salary alone, but I'm not sure how OHs income would be calculated as its primarily dividends. I just was wondering if the value in the property could be used in that way, but as expected the commercial part complicates matters. Since I've never had a mortgage I'm not really clear on what is and isn't possible. 

Waiting is of course the simpler option🙂

K_S

becky_rtw said:

Thanks for your reply KS. Very detailed. 

We both also work full time, but one of us is self employed. I can raise a £270k mortgage on my salary alone, but I'm not sure how OHs income would be calculated as its primarily dividends. I just was wondering if the value in the property could be used in that way, but as expected the commercial part complicates matters. Since I've never had a mortgage I'm not really clear on what is and isn't possible. 

Waiting is of course the simpler option🙂

@becky_rtw In that case your first port of call should definitely be looking at how much you can borrow on a joint application. Self-employed mortgage lending has come a long way in the past few years and as long as your OH has a 2 year track record as a ltd.co.director, and the company structure isn't overly complex, there's a very good chance that his income can be used with the right lender, either as sal+divs or sal+netprofit (useful where ltd.co.directors retain profits inside the company without extracting all of it), whichever works out better for affordability. As a very very rough rule of thumb, if his income totals up to 25k+, that may open up options to borrow the balance £130k at 80% LTV.

becky_rtw

Thanks again @K_S that has been super useful! We will take a look. 

propertyhunter

Hello,

Something ridiculous happened over the weekend. A merchant tried to take a payment from an account which had insufficient funds, so the transaction was stopped. The payment was made with another account straight away - no bills are unpaid or listed as unpaid on my credit file. There is no overdraft, so it didn't affect that - and no additional borrowing occurred. What impact is this likely to have on my mortgage completion with HSBC? I have received the offer already, but wonder whether the issuing bank of the card which declined the transaction will put a note on my credit file?

Thanks in advance. 

K_S

propertyhunter said:

Hello,

Something ridiculous happened over the weekend. A merchant tried to take a payment from an account which had insufficient funds, so the transaction was stopped. The payment was made with another account straight away - no bills are unpaid or listed as unpaid on my credit file. There is no overdraft, so it didn't affect that - and no additional borrowing occurred. What impact is this likely to have on my mortgage completion with HSBC? I have received the offer already, but wonder whether the issuing bank of the card which declined the transaction will put a note on my credit file?

Thanks in advance. 

@propertyhunter Based on the limited info in your post, it shouldn't have any impact on your offer. Even if it were prior to an application, I wouldn't expect it to cause anything more than a perfunctory query (in the unlikely event that it showed on the statement in some way).

propertyhunter

Thank you @K_S - appreciate the prompt response. I am grateful for all of the advice you've given directly and indirectly on this thread. 

debtout

Hi, I'm hoping you can provide some advise, with regards to pepper money. I posted in an old pepper money thread, but figured might get better support on here. Our situation :

25.3.22 broker submits application.

Same day hard search on Credit file and broker comes back to say pepper money requested a letter from my workplace, confirming my start date which I promptly sent back same day. Again its only been a few days, but very anxious to know what could be happening in the background, does it look good if pepper money only asked for a few documents? What could they be doing in the background? 

We also applied for the help to buy first time equity loan and this was done by broker on 24. 3.22 but again not heard back. Apologies for bringing my anxieties on here, its just that the waiting is stressful 😂.. Looking forward to your advise... 

K_S

debtout said:

Hi, I'm hoping you can provide some advise, with regards to pepper money. I posted in an old pepper money thread, but figured might get better support on here. Our situation :

25.3.22 broker submits application.

Same day hard search on Credit file and broker comes back to say pepper money requested a letter from my workplace, confirming my start date which I promptly sent back same day. Again its only been a few days, but very anxious to know what could be happening in the background, does it look good if pepper money only asked for a few documents? What could they be doing in the background? 

We also applied for the help to buy first time equity loan and this was done by broker on 24. 3.22 but again not heard back. Apologies for bringing my anxieties on here, its just that the waiting is stressful 😂.. Looking forward to your advise... 

@debtout It's too soon to start worrying!

At least in my book, as a broker, Pepper are a good lender who give you a clear yes/no when you run the case past them before placing it with them. As per their published service levels, they're currently working on applications submitted on the 25th. Specialist lenders can take a while to assess applications and supporting documents, but that varies as the clients using them usually aren't standard cases.

I would give it some time and perhaps follow up with your broker around the end of the week or so. Good luck!

debtout

K_S said:

debtout said:

Hi, I'm hoping you can provide some advise, with regards to pepper money. I posted in an old pepper money thread, but figured might get better support on here. Our situation :

25.3.22 broker submits application.

Same day hard search on Credit file and broker comes back to say pepper money requested a letter from my workplace, confirming my start date which I promptly sent back same day. Again its only been a few days, but very anxious to know what could be happening in the background, does it look good if pepper money only asked for a few documents? What could they be doing in the background? 

We also applied for the help to buy first time equity loan and this was done by broker on 24. 3.22 but again not heard back. Apologies for bringing my anxieties on here, its just that the waiting is stressful 😂.. Looking forward to your advise... 

@debtout It's too soon to start worrying!

At least in my book, as a broker, Pepper are a good lender who give you a clear yes/no when you run the case past them before placing it with them. As per their published service levels, they're currently working on applications submitted on the 25th. Specialist lenders can take a while to assess applications and supporting documents, but that varies as the clients using them usually aren't standard cases.

I would give it some time and perhaps follow up with your broker around the end of the week or so. Good luck!

Thanks for your prompt reply. With the help to buy equity loan scheme, any idea time frames with them please?. Any reason they could turn anyone down?