Mortgage broker - ask me anything

IAMIAM

Hi, Which 'good' mainstream lenders allow you to move a residential mortgage (a house you've lived in) to a buy to let interest only mortgage 'straight away' with 75% LTV without having to have a second property in place or be an owner occupier elsewhere, effectively moving out when it completes/rental takes affect....Thanks

donblako

Hi,
Ive been spending money on the house and with hindsight I should have remortgaged to raise equity rather than creat credit card and loan debt to then repay with remortgage! Anyway…

I’ve 50k to pay debt across 50k credit cards and 20k loan. I will soon be raising more to renovate the house further and was planning to pay 30k credit cards and clear loan, leaving 20k on 0% cc.

If I’m remortgaging is it better to have 20k cc on 0% or 20k on low interest loan, from perspective of ease of remortgage? Appreciate your help

K_S

donblako said:

Hi,
Ive been spending money on the house and with hindsight I should have remortgaged to raise equity rather than creat credit card and loan debt to then repay with remortgage! Anyway…

I’ve 50k to pay debt across 50k credit cards and 20k loan. I will soon be raising more to renovate the house further and was planning to pay 30k credit cards and clear loan, leaving 20k on 0% cc.

If I’m remortgaging is it better to have 20k cc on 0% or 20k on low interest loan, from perspective of ease of remortgage? Appreciate your help

@donblako Very very roughly speaking, with regard to affordability, 20k of cc debt (0% or 20% doesn't matter to the lender) will equate to a monthly payment of about 3% of the outstanding amount, so about £600. The impact of the personal loan will be based on the size of the monthly payment, so £20k over 5 years would have less of of an impact that £20k over 2 years. I hope that makes sense.

That is just the affordability part - try playing around with a couple of lender affordability calcs to see which works out better 
https://www.nationwide-intermediary.co.uk/calculators/affordability-calculator
https://online.accordmortgages.com/public/mortgages/quick_enquiry.do

The size of the debt in relation to your income may also have an impact (especially if you're consolidating debt on to the remortgage) and that will be fairly similar whether it's a cc or a loan.

K_S

IAMIAM said:

Hi, Which 'good' mainstream lenders allow you to move a residential mortgage (a house you've lived in) to a buy to let interest only mortgage 'straight away' with 75% LTV without having to have a second property in place or be an owner occupier elsewhere, effectively moving out when it completes/rental takes affect....Thanks

@iamiam While you're living in the property and not doing a let-to-buy? It's not just the lender criteria that'll be the issue here, it's the subjective opinion of the underwriter as to whether it is plausible that you will move out or whether you're doing it just for an interest-only mortgage for the house you live in.

Once you've moved out of the property and that address is no longer reflected as a current address in your credit reports, it'll be much easier.

MrBounce

I am in the process of going through a mortgage through Halifax Intermediary and my anxiety is going through the roof, waiting for a decision. I am self employed. 

My MA submitted on full app on Thursday and they did a hard search and took payment for Valuation. I have no personal borrowing as pay off my credit card in full each month and just some BTLs.

The MA said it was accepted through the system, so not concerned about it... I am stressing until i get an official decision.

If the system says yes, is it normally straightforward from there? 

K_S

MrBounce said:

I am in the process of going through a mortgage through Halifax Intermediary and my anxiety is going through the roof, waiting for a decision. I am self employed. 

My MA submitted on full app on Thursday and they did a hard search and took payment for Valuation. I have no personal borrowing as pay off my credit card in full each month and just some BTLs.

The MA said it was accepted through the system, so not concerned about it... I am stressing until i get an official decision.

If the system says yes, is it normally straightforward from there? 

@mrbounce I can't comment on your specific case or outcome, but generally speaking, the answer to your question is Yes

Flyer14

Hi, Hoping for some advice.

Myself and my partner are hoping to buy within the next 6 months - We are currently staying in a house owned by one of her family members who is moving in with their partner and happy to sell to us. Expect property valuation to go for between £200-210k (given recent sales of 3 properties on either side all going between £175k-£215k. Likely to have around £42-45k deposit (approx 20%) although we have the option to access inheritance from her late grandparents, we are hoping not to touch this money however - that could push the deposit up to c£65k. Combined income is £52k annually shortly to rise to £58-60k so looking to borrow around 3.5x income. 

My partner previously owned a flat till she sold 6 months ago - has fantastic credit, no blemishes at all, card limit and available overdraft of approx £5k each but lucky if £50 goes on it each month and paid off immediately. Took out a PCP car finance deal in January replacing her current one and agreeing to a new 3 year deal - with the same finance company.

I have what I would consider quite poor credit history - After being rather naïve and not living in my means I built up approx £17k of debt (Payday Loans, 2 bank loans (approx £3k each), one store card) and entered into a Debt Arrangement Scheme (Scotland) in Nov2018. This was cleared in November 2021 and is now starting to reflect on my credit file - Experian picking up fairly quickly but Equifax still seems really low scores. There is approx 5 defaults total, all of which were included within the DAS. Only credit I have is mobile phone, Credit card and overdraft with £250 limits each, both of which are paid off immediately as soon as used. Coming up on 6 months of clean payment history on credit files and as of next spring some of the oldest payday lending accounts will drop off as have hit the 6 year mark.

I appreciate we will likely not get the best rate but given the DAS is now clear and her excellent credit history, do you see it being possible to obtain a mortgage before 2023? We asked a broker whilst i was still in the scheme and it wasn't satisfied, his general view was that any arrangement scheme meant a minimum of 3 years post completion for anyone to come near you but everything I find online seems to contradict him!

Thanks in advance

Flyer

K_S

Flyer14 said:

Hi, Hoping for some advice.

Myself and my partner are hoping to buy within the next 6 months - We are currently staying in a house owned by one of her family members who is moving in with their partner and happy to sell to us. Expect property valuation to go for between £200-210k (given recent sales of 3 properties on either side all going between £175k-£215k. Likely to have around £42-45k deposit (approx 20%) although we have the option to access inheritance from her late grandparents, we are hoping not to touch this money however - that could push the deposit up to c£65k. Combined income is £52k annually shortly to rise to £58-60k so looking to borrow around 3.5x income. 

My partner previously owned a flat till she sold 6 months ago - has fantastic credit, no blemishes at all, card limit and available overdraft of approx £5k each but lucky if £50 goes on it each month and paid off immediately. Took out a PCP car finance deal in January replacing her current one and agreeing to a new 3 year deal - with the same finance company.

I have what I would consider quite poor credit history - After being rather naïve and not living in my means I built up approx £17k of debt (Payday Loans, 2 bank loans (approx £3k each), one store card) and entered into a Debt Arrangement Scheme (Scotland) in Nov2018. This was cleared in November 2021 and is now starting to reflect on my credit file - Experian picking up fairly quickly but Equifax still seems really low scores. There is approx 5 defaults total, all of which were included within the DAS. Only credit I have is mobile phone, Credit card and overdraft with £250 limits each, both of which are paid off immediately as soon as used. Coming up on 6 months of clean payment history on credit files and as of next spring some of the oldest payday lending accounts will drop off as have hit the 6 year mark.

I appreciate we will likely not get the best rate but given the DAS is now clear and her excellent credit history, do you see it being possible to obtain a mortgage before 2023? We asked a broker whilst i was still in the scheme and it wasn't satisfied, his general view was that any arrangement scheme meant a minimum of 3 years post completion for anyone to come near you but everything I find online seems to contradict him!

Thanks in advance

Flyer

@flyer14 I'm sure you will appreciate that the details matter a lot in cases like these so please only take the below as general comments based on the limited info in your post -
- ignore the Experian/Equifax credit scores, they don't really matter. All that matters to the lender is what actually is in your credit reports.
- given that the DAS was satisfied less than 2 years ago, there are likely to be only a few lenders who will consider at this point, and you will likely need a 30-35% deposit.
- Once the 2 year mark is past, a few more lenders come into the picture and a 20-25% deposit should be sufficient.
- Once it's 3 years+, you should have a wide pool of lenders

When you think you may want to start looking, I would recommend getting in touch with a good experienced broker to get a realistic idea of your options. The likes of L&C/Habito/Trussle are unlikely to be able to help.

homewishes

Hi. My wife took out an IVA in Sept 2016 and in June 2021 I paid off all of the remaining balance. The IVA is showing satisfied as of Nov 21. We would like to move house this year to accommodate our growing family. 

We have not found a house yet to pull the trigger on but new houses are being built in an area we would like to move too which are will be available later this year.

Timings of applying for a mortgage...

Say house is ready Nov 2022

Best to start applying for mortgages post Sept 2022 to get more lenders? "6 year period for IVA to disappear from Credit file".

silvermountains

Does the Coventry BS communicate that a mortgage has been approved pending the valuation to follow, or does it all come in one communication?