Mortgage broker - ask me anything

Chumy

Hello,

I am self employed

On my SA302, I have

"plus benefits and expenses received"  = £40,000
 Dividends from UK companies = £15,000

Total income received = £65,000

minus Personal Allowance = £12,500

I have this for 2 years. 

A broker just told me that my average income for 2years is £30,000 and NOT £65,000?

I always assumed it was my total yearly income that counts

Are there lenders that will see my annual income as £65,000?

TIA

Kimonos88

K_S said:

40yearoldgraduate said:

Hello. Thanks for this amazing thread. I’ve made it up to page 204 so far! 

Haven’t seen this asked yet - 

Does anyone know how the timeline for Scottish Widows mortgage applications work? 

I’ve learned from this thread that some lenders do the property valuations as the final check and others do it at the start - so before the deep dive. 

Just wondering how close to the finish line a property valuation being arranged by SW is. 

Thanks again for this epic thread! 

@40yearoldgraduateOff of the top of my head, SW instruct the valuation when they confirm that a fully packaged application has been submitted. Underwriting (if required, as not all applications will require full-underwriting) is the next stage and will happen in parallel with the valuation.

Is this the same for NatWest? Full app went in 2 weeks tomorrow. Valuation booked for this Friday. 🤞🏽

K_S

Chumy said:

Hello,

I am self employed

On my SA302, I have

"plus benefits and expenses received"  = £40,000
 Dividends from UK companies = £15,000

Total income received = £65,000

minus Personal Allowance = £12,500

I have this for 2 years. 

A broker just told me that my average income for 2years is £30,000 and NOT £65,000?

I always assumed it was my total yearly income that counts

Are there lenders that will see my annual income as £65,000?

TIA

@chumy I'm assuming you're a ltd.co.director. You probably already know this - usually, the 'benefits and expenses received' line on the SA302 will correspond to your P11D which captures the non-cash benefits provided to you by your company like company car, health insurance, etc. Usually, lenders will not consider this for affordability as these benefits aren't going to pay the mortgage.

I hesitate to expand any further as I don't want to unknowingly mislead you one way or the other, as ltd.co. income can be structured in a lot of different ways and different lenders have different criteria. 

K_S

Kimonos88 said:

K_S said:

40yearoldgraduate said:

Hello. Thanks for this amazing thread. I’ve made it up to page 204 so far! 

Haven’t seen this asked yet - 

Does anyone know how the timeline for Scottish Widows mortgage applications work? 

I’ve learned from this thread that some lenders do the property valuations as the final check and others do it at the start - so before the deep dive. 

Just wondering how close to the finish line a property valuation being arranged by SW is. 

Thanks again for this epic thread! 

@40yearoldgraduateOff of the top of my head, SW instruct the valuation when they confirm that a fully packaged application has been submitted. Underwriting (if required, as not all applications will require full-underwriting) is the next stage and will happen in parallel with the valuation.

Is this the same for NatWest? Full app went in 2 weeks tomorrow. Valuation booked for this Friday. 🤞🏽

@kimonos88 Pretty much. NatWest instructs a valuation at the initial review stage and then the application goes into the underwriting queue.

Chumy

K_S said:

Chumy said:

Hello,

I am self employed

On my SA302, I have

"plus benefits and expenses received"  = £40,000
 Dividends from UK companies = £15,000

Total income received = £65,000

minus Personal Allowance = £12,500

I have this for 2 years. 

A broker just told me that my average income for 2years is £30,000 and NOT £65,000?

I always assumed it was my total yearly income that counts

Are there lenders that will see my annual income as £65,000?

TIA

@chumy I'm assuming you're a ltd.co.director. You probably already know this - usually, the 'benefits and expenses received' line on the SA302 will correspond to your P11D which captures the non-cash benefits provided to you by your company like company car, health insurance, etc. Usually, lenders will not consider this for affordability as these benefits aren't going to pay the mortgage.

I hesitate to expand any further as I don't want to unknowingly mislead you one way or the other, as ltd.co. income can be structured in a lot of different ways and different lenders have different criteria. 

Thanks for this.

Do you know any lender that would consider this as income? Thanks

JW2709

Hi

Wife and I are FTB's.  Combined income is approx £75K

Wife credit file is clear but score is fair (no adverse credit other than a late payments on a credit agreement about 2 years ago which have all been up to date since and did not result in a default).  Couple of credit cards and store cards all with 0 balances ( credit cards have limits of around £4K but with 0 balance).

My credit file:  Had some credit issues in the past with CCJ's and defaults.  All are clear except for 1 CCJ for the value of £465 which is now paid and was registered back in 2019.  I have multiple credit cards with decent credit limits (AMEX & Barclaycards limits around 3K each) and have low balances (about £200).  I also have a loan for when I purchased a car which will be complete next year.  I have no history of late payments.  Credit score is poor but on the verge or being fair.  Equifax is high and showing a very good score however Experian is showing a poor score which I am assuming is down to the CCJ's and defaults that were only registered on Experian.

We have managed to saved a deposit of approx £50K through lifetime ISA and general savings.

As mentioned we have low credit scores and wanted to understand the chances of being accepted for a mortgage.  Other than the above we only have 1 committed spend which is my child school fees which are about 13K per year.  We are fortunate to live with my parents currently which means all other out goings are minimal but do pay bills and rent.

We have seen some properties in the region of around £325K- £350K but would like to understand also how much we could potentially borrow based on the above and how much of a deposit (%) we would need.   We can than look either look for a cheaper property or try and save more of a deposit.

Chance of being accepted for a mortgage? and for the amount we need (£300K)

debtout

Hi I have a question if I may ask please. we are currently at the valuation stage and our date for valuation is Monday the 11th, next week. The property we are buying is a new build and it should be ready sometime in August. My question is that if we do get the mortgage offer, after valuation,  does it mean we can exchange contracts and get all the moneies, deposit etc paid now and the house will formally and legally be ours,  or this will need to wait untill the house is finished being built?

K_S

Chumy said:

K_S said:

Chumy said:

Hello,

I am self employed

On my SA302, I have

"plus benefits and expenses received"  = £40,000
 Dividends from UK companies = £15,000

Total income received = £65,000

minus Personal Allowance = £12,500

I have this for 2 years. 

A broker just told me that my average income for 2years is £30,000 and NOT £65,000?

I always assumed it was my total yearly income that counts

Are there lenders that will see my annual income as £65,000?

TIA

@chumy I'm assuming you're a ltd.co.director. You probably already know this - usually, the 'benefits and expenses received' line on the SA302 will correspond to your P11D which captures the non-cash benefits provided to you by your company like company car, health insurance, etc. Usually, lenders will not consider this for affordability as these benefits aren't going to pay the mortgage.

I hesitate to expand any further as I don't want to unknowingly mislead you one way or the other, as ltd.co. income can be structured in a lot of different ways and different lenders have different criteria. 

Thanks for this.

Do you know any lender that would consider this as income? Thanks

@chumy Sorry there just simply isn't enough information to say. I would recommend getting in touch with two good whole of market brokers and seeing what they say. The MSE guide here https://www.moneysavingexpert.com/mortgages/best-mortgages-cashback/#step3 has a list of brokers, good luck!

K_S

debtout said:

Hi I have a question if I may ask please. we are currently at the valuation stage and our date for valuation is Monday the 11th, next week. The property we are buying is a new build and it should be ready sometime in August. My question is that if we do get the mortgage offer, after valuation,  does it mean we can exchange contracts and get all the moneies, deposit etc paid now and the house will formally and legally be ours,  or this will need to wait untill the house is finished being built?

@debtout Once you have the offer, you can exchange contracts at which point both vendor and buyer are contractually obligated to complete on the purchase.

Once the property is close to getting ready to move in to, the solicitors will agree a completion date and your solicitor will request the lender to release funds a day or two before the completion date.

Once completion has taken place, the house is formally and legally yours.

manotreats

My mortgage offer came through on 22 March, but my first payment was due to start on 25th April. Is is better to make the first payment asap, or would it make any difference  to wait until 25 April for the first payment. The interest is being charged daily between now and April 25th. What should I do? Pay now or it doesn't matter to wait for the first payment?