Mortgage broker - ask me anything

debtout

K_S said:

debtout said:

Hi again, more questions to ask if I may. We've had a call back from our lender pepper money. They are just going through the final checks, but it's all likely to go through as they have taken direct debit details. Now the only concern is that they have advised me that the mortgage offer, is for 3 months. Unfortunately our new build home, will not be ready until at least September October. What is likely to happen then in the 3 months? Can the lender increase the offer for longer? I called the developer and they told me that most mortgage offers are for 6 months, so now very worried that the offer is only 3 months. What's your experience please with regards to mortgage offer extensions? 

@debtout It's 90 days + 30 days (extension) for Pepper's HTB mortgage offers. Beyond that usually you'll have to reapply.

But do check with your broker, perhaps my information above is out of date. 

Hi many thanks for your input. The broker has advised that pepper can give 2x 30 months extensions after the 3 months offer. Also please when does the actual offer start? Is it the day the lender sends it to us or its when we sign and send the offer back to them? 

K_S

stormpassing said:

Hi K_S, I’m currently applying for a mortgage with LBS and the valuation came in at £5k less than offer. The vendor is happy with the new price and I have sent my MB the updated memorandum of sale. I tried to ask what happens now but the answer wasn’t clear. I do know the underwriter hadn’t seen the valuation at that point. Is this common and am I likely to encounter any issues because of it? Thanks in advance

@stormpassing I'd can't recall Leeds process off of the top of my head but a downward change in purchase price post-offer is very common and what usually happens is that the broker goes into the system and updates the purchase price and resubmits it.

This thread should help understand the rest of what happens - https://forums.moneysavingexpert.com/discussion/6348321/what-ltv-to-apply-for-when-expecting-a-downvalue

K_S

debtout said:

K_S said:

debtout said:

Hi again, more questions to ask if I may. We've had a call back from our lender pepper money. They are just going through the final checks, but it's all likely to go through as they have taken direct debit details. Now the only concern is that they have advised me that the mortgage offer, is for 3 months. Unfortunately our new build home, will not be ready until at least September October. What is likely to happen then in the 3 months? Can the lender increase the offer for longer? I called the developer and they told me that most mortgage offers are for 6 months, so now very worried that the offer is only 3 months. What's your experience please with regards to mortgage offer extensions? 

@debtout It's 90 days + 30 days (extension) for Pepper's HTB mortgage offers. Beyond that usually you'll have to reapply.

But do check with your broker, perhaps my information above is out of date. 

Hi many thanks for your input. The broker has advised that pepper can give 2x 30 months extensions after the 3 months offer. Also please when does the actual offer start? Is it the day the lender sends it to us or its when we sign and send the offer back to them? 

@debtout Thanks for coming back, that's good to know. Will that get you to Sep/Oct though?

Unless Pepper has a different system, normally the clock starts ticking from the date the offer is issued on the system.

KA_

Hi, I’m looking for some advice on how I can best align my mortgage loans in the future. I currently have my flat mortgaged with £80k balance remaining, the fixed term ends in January 2023.

We’ve reserved a new build due to be built in roughly August time, valued at around £260k.

Santander has offered to port our mortgage so we will have two parts to our loan. The 80k portion will be ported so will be fixed until January. The remainder will be on a new five year deal fixed to current rates. The offer is valid until the end of August, so we may need to apply for an extension but solicitor has advised this should be straightforward.

We inquired about possibly getting a new deal on the full amount, however lender says we need to be within 4 months of our fixed deal ending before we can get a new deal. Santander advised that we could apply to re-mortgage the existing loan portion after we move in once we’re within the four months. Though I’m concerned that our term end dates then wouldn’t be aligned and we would need to remortgage each portion separately in five years time. This could also tie us to this lender for longer. Is there any way to try and align the re-mortgage into one term?

If our new build is delayed, we could potentially apply for a new loan for the full amount, though I’d be concerned about interest rates rising again and getting a worse deal. 

Hlkns

@K_S
Hi, please give me some advice on this:
We are couple looking to buy our first home. We have AIP in place so right now its time to start hunting house.
I am sole trader and I am wondering how important is income in my last 3 bank statements?
For example my net profits in SA302 for last 2 years is: £53.5k + £64k = £117.5k / 2 = £58.5k - this is what I call my average net profit.

But to find house now I will have to take more day offs which gonna impact my income until we find house. Is income on bank statments very important for banks or they taking more attention to SA302 (which is better proof of regular income IMHO).

Thank you.

debtout

Hi another question please. Are we supposed to have a leggaly agreed date for when the new build home should be completed and ready for us to move in?. The reason I ask is that our developer keeps saying the time line is likely to change and it can be anything from September to October. The initial brochure they sent us, had a date of September but they're now saying it could be September, October or even December. The variation in end dates is causing an issue for us, in terms of giving notice etc. Are developers expected to provide a legal date for when the property is due to be completed? 

Second question, looking at our help to buy equity loan offer, it has a 3 month valid period, in which we have to exchange contracts within the 3 month's. Am I right to assume that even though there is likely to be a delay in our property being completed, which will go over the 3 month period, the exchange of contracts still goes ahead?. Also at exchange of contracts, is it when the developer is expected to provide a legal and binding expected date for when the house should be ready? 

K_S

debtout said:

Hi another question please. Are we supposed to have a leggaly agreed date for when the new build home should be completed and ready for us to move in?. The reason I ask is that our developer keeps saying the time line is likely to change and it can be anything from September to October. The initial brochure they sent us, had a date of September but they're now saying it could be September, October or even December. The variation in end dates is causing an issue for us, in terms of giving notice etc. Are developers expected to provide a legal date for when the property is due to be completed? 

Second question, looking at our help to buy equity loan offer, it has a 3 month valid period, in which we have to exchange contracts within the 3 month's. Am I right to assume that even though there is likely to be a delay in our property being completed, which will go over the 3 month period, the exchange of contracts still goes ahead?. Also at exchange of contracts, is it when the developer is expected to provide a legal and binding expected date for when the house should be ready? 

@debtout              
- no, developers don't have to provide a firm date for completion. There will be a 'long-stop' date in the contract but that'll be many months after the expected completion date.
- normally, most developers will expect you to exchange ASAP, and there is no need for the developer to provide a binding date for completion other than the long-stop date 

New builds getting delayed is extremely common, especially so in the current environment where most builders are struggling to get material and labour. So you would be well advised to heed the message being given by the builder when they say that completion could be "September, October or even December".

K_S

Hlkns said:

@K_S
Hi, please give me some advice on this:
We are couple looking to buy our first home. We have AIP in place so right now its time to start hunting house.
I am sole trader and I am wondering how important is income in my last 3 bank statements?
For example my net profits in SA302 for last 2 years is: £53.5k + £64k = £117.5k / 2 = £58.5k - this is what I call my average net profit.

But to find house now I will have to take more day offs which gonna impact my income until we find house. Is income on bank statments very important for banks or they taking more attention to SA302 (which is better proof of regular income IMHO).

Thank you.

@hlkns If you are asking whether a dip in your current ongoing year will be an issue, it will depend on the lender. Some will simply go by the SA302s, some will ask for recent business bank statements as well, etc. In any case, the underwriter can always ask for more evidence even if it is not a standard requirement.

K_S

KA_ said:

Hi, I’m looking for some advice on how I can best align my mortgage loans in the future. I currently have my flat mortgaged with £80k balance remaining, the fixed term ends in January 2023.

We’ve reserved a new build due to be built in roughly August time, valued at around £260k.

Santander has offered to port our mortgage so we will have two parts to our loan. The 80k portion will be ported so will be fixed until January. The remainder will be on a new five year deal fixed to current rates. The offer is valid until the end of August, so we may need to apply for an extension but solicitor has advised this should be straightforward.

We inquired about possibly getting a new deal on the full amount, however lender says we need to be within 4 months of our fixed deal ending before we can get a new deal. Santander advised that we could apply to re-mortgage the existing loan portion after we move in once we’re within the four months. Though I’m concerned that our term end dates then wouldn’t be aligned and we would need to remortgage each portion separately in five years time. This could also tie us to this lender for longer. Is there any way to try and align the re-mortgage into one term?

If our new build is delayed, we could potentially apply for a new loan for the full amount, though I’d be concerned about interest rates rising again and getting a worse deal. 

@KA_

- firstly, off of the top of my head Santander offers do not go beyond the product validity date (top of the first page of the offer - 'The information below remains valid until...'. For new builds, if they haven't completed by then, you'll need to select a new product at the time to extend the offer. For you, I think that deadline will be 31 August, based on your post. I would recommend confirming the same with Santander. Sorry, brain fart, ignore that While typing, I forgot that it's a new-build so the Santander product completion deadlines are usually 9 months long so it probably goes to December for you.

- besides paying the ERC and getting a mortgage, there's nothing else I can think of to align the mortgage parts right now. You could always switch the smaller part to a 2 year fix, another 2 year fix, leave it on variable for a few months and then get it all aligned at the earliest opportunity.

KA_

K_S said:

KA_ said:

Hi, I’m looking for some advice on how I can best align my mortgage loans in the future. I currently have my flat mortgaged with £80k balance remaining, the fixed term ends in January 2023.

We’ve reserved a new build due to be built in roughly August time, valued at around £260k.

Santander has offered to port our mortgage so we will have two parts to our loan. The 80k portion will be ported so will be fixed until January. The remainder will be on a new five year deal fixed to current rates. The offer is valid until the end of August, so we may need to apply for an extension but solicitor has advised this should be straightforward.

We inquired about possibly getting a new deal on the full amount, however lender says we need to be within 4 months of our fixed deal ending before we can get a new deal. Santander advised that we could apply to re-mortgage the existing loan portion after we move in once we’re within the four months. Though I’m concerned that our term end dates then wouldn’t be aligned and we would need to remortgage each portion separately in five years time. This could also tie us to this lender for longer. Is there any way to try and align the re-mortgage into one term?

If our new build is delayed, we could potentially apply for a new loan for the full amount, though I’d be concerned about interest rates rising again and getting a worse deal. 

@KA_

- firstly, off of the top of my head Santander offers do not go beyond the product validity date (top of the first page of the offer - 'The information below remains valid until...'. For new builds, if they haven't completed by then, you'll need to select a new product at the time to extend the offer. For you, I think that deadline will be 31 August, based on your post. I would recommend confirming the same with Santander. Sorry, brain fart, ignore that While typing, I forgot that it's a new-build so the Santander product completion deadlines are usually 9 months long so it probably goes to December for you.

- besides paying the ERC and getting a mortgage, there's nothing else I can think of to align the mortgage parts right now. You could always switch the smaller part to a 2 year fix, another 2 year fix, leave it on variable for a few months and then get it all aligned at the earliest opportunity.

Sorry to clarify, we’ve already applied for the ported mortgage. Received our offer last week with an expiry date of 31st August. Also forgot to mention we we will also be putting in a deposit of 25%, making our total loan roughly  £193k, made up of the £80k port (fixed at 1.84% until Jan 23) and roughly £113k new loan (fixed at 2.19% for five years). The ERC on the existing mortgage is currently £4k.

Assuming there wasn’t a delay and we could complete by 31st Aug, the advisor at Santander had suggested I could complete with the two loans as this to start with, then apply for a re-mortgage on the smaller loan for 5 years at the earliest opportunity (September?). Then try to line up the two loans in 2023. Presumably this would mean a month or two of the larger loan on SV? 

I hadn’t actually considered a shorter fix on the smaller loan, though I’m slightly wary if interest rates continue to rise in the next couple years.

If we’re looking to delay into September, I would prefer applying for a new deal over an extension if the dates all align and the rates haven’t changed too much. Though I’m a bit confused at the exact timescales Santander work on, whether it’s by application date or completion date?