Mortgage broker - ask me anything

jola139

Hi, total newbie.
My oh and I,we got first time buyers mortgage in March 2021, 5 yrs fix on 3.45%. We would like to move. Done valuation, value increased from £185k to £230k. Property we'll be buying will be probably around £230k. So we are not gaining anything.
My question is : is it a good move with a recession on the door step? Or shall we hold? 

sunmoon99

If I have one mortgage application already and its unsuccessful, can I apply with a different lender? Will unsuccessful application affect my credit score much? (It’s excellent BTW - no default or debts). 

K_S

sunmoon99 said:

If I have one mortgage application already and its unsuccessful, can I apply with a different lender? Will unsuccessful application affect my credit score much? (It’s excellent BTW - no default or debts). 

@sunmoon99 Yes, you can apply with a new lender. The hard search from the first application may have a small temporary impact, but it's never been an issue that's derailed an application.

Needless to say, it's important to understand the reason for the first decline before going for another lender.

newdriver101

Hi @K_S
Please can I have your thoughts on my CTL + capital raise query?

Background:
Have struggled to sell my flat (due to an onerous doubling ground rent clause).
I am trying to convert flat to LTB but struggling to find a lender owing to the same onerous GR clause issue.  Have also lost faith in my broker (but that’s another story…) so was hoping to get your views on this idea before I change broker.

I am now contemplating CTL as I am in the process of buying a new place and will need to complete on my onward purchase very soon + also need some equity in my current flat for the move.

My questions: 
1. Is it possible to apply for CTL and a capital raise/additional borrowing at the same time?

2. My current fixed term is due to end in June (+ I hope to move to the new place in September/October).  I plan to switch to a tracker or stay on the SVR in July - should I wait to switch to the tracker/SVR before making the application for CTL + additional borrowing? Does it make a difference if I apply before/after the fix term ends?

Lender = HSBC
Current valuation = £300k (HSBC’s estimated value)
Current mortgage outstanding = £175,000 (60% LTV)
Equity required = £30k (this would take me to 70-75% LTV)

3. The £300k valuation is the lender’s estimated value - will an application for additional lending necessitate a formal valuation?

Just to add: yes, I can afford the 2 mortgages + I do plan to eventually extend the lease (+ remove ground rent) but my impending move means I don’t have sufficient time/money to do so now .

Thanks in advance

K_S

newdriver101 said:

Hi @K_S
Please can I have your thoughts on my CTL + capital raise query?

Background:
Have struggled to sell my flat (due to an onerous doubling ground rent clause).
I am trying to convert flat to LTB but struggling to find a lender owing to the same onerous GR clause issue.  Have also lost faith in my broker (but that’s another story…) so was hoping to get your views on this idea before I change broker.

I am now contemplating CTL as I am in the process of buying a new place and will need to complete on my onward purchase very soon + also need some equity in my current flat for the move.

My questions: 
1. Is it possible to apply for CTL and a capital raise/additional borrowing at the same time?

2. My current fixed term is due to end in June (+ I hope to move to the new place in September/October).  I plan to switch to a tracker or stay on the SVR in July - should I wait to switch to the tracker/SVR before making the application for CTL + additional borrowing? Does it make a difference if I apply before/after the fix term ends?

Lender = HSBC
Current valuation = £300k (HSBC’s estimated value)
Current mortgage outstanding = £175,000 (60% LTV)
Equity required = £30k (this would take me to 70-75% LTV)

3. The £300k valuation is the lender’s estimated value - will an application for additional lending necessitate a formal valuation?

Just to add: yes, I can afford the 2 mortgages + I do plan to eventually extend the lease (+ remove ground rent) but my impending move means I don’t have sufficient time/money to do so now .

Thanks in advance

@newdriver101

1. Not afaik. These are two completely different applications and if you needed to do both, you would have to do additional borrowing/further advance first, complete on that and then apply for CTL. I wouldn't expect the lender to be ok with letting you raise additional cash at resi rates and also give you permission to let the property at the same time.

2. Shouldn't make any difference either way. If you can, it would be best to align the additional borrowing to the main mortgage part for ease of future product-transfers/re-mortgaging.

3. In most cases, the lender will use an automated indexed valuation for a further advance/additional borrowing application. In a minority of cases, it will trigger a proper revaluation.

newdriver101

Many thanks @K_S
Much appreciated.

bubby08

@K_S Hi Ks I have just received notification my application has been received by Nationwide, however I saw they ran a hard search dated on the 4th, Do you know the time scales involved from here before I find out if it’s been rejected or not?

Best Regards

K_S

bubby08 said:

@K_S Hi Ks I have just received notification my application has been received by Nationwide, however I saw they ran a hard search dated on the 4th, Do you know the time scales involved from here before I find out if it’s been rejected or not?

Best Regards

@bubby08 These are the current average timescales for Nationwide

https://www.nationwide-intermediary.co.uk/placing-business/service-updates

bubby08

Great thank you so much.

r9230245

I had a couple of returned payments on my bank statement for a phone bill for about £30, they both appeared on my bank statements I used for the mortgage application. 

Not on my credit file though as they tried to take the payment again a few days later and did so successfully as I added the funds in. It was just total oversight on my behalf as I was really stressed with work and forgot to move some funds into my current account for that direct debit (one was in December and the other in March) 

Am I likely to get rejected on that basis?