Mortgage broker - ask me anything

EM_DM

@K_S

Hi I was wondering if you could put our minds at ease, we have applied to newbury for a shared ownership and using a broker 5% deposit on £125k mortgage AIP came back fine and I am lead to believe newbury do a hard credit search. Our application has gone in. 

My overdraft is £1000 but only in it £400 max and is cleared every month when pay goes in, partner has circa £1500 (positive) in current account would that off set one another on a joint application?

We have also found out that we forgot to but a credit card on the application which has an outstanding balance of £200 what can we do with this as with the underwriters already?

We are just worried that the underwriters will say no.

ANY HELP PLEASE!

K_S

nicky73 said:

Hi,
I’ve had offer on my house and an offer accepted on a new house. 

During my move I want to clear unsecured debts - £7K credit card and £240 a month loan using equity from the sale. 

Broker has applied to Halifax to do this - LTV is around 35% - affordability is fine with debts excluded but won’t be if they are included but broker says this will be fine. My credit score is excellent (know doesn’t mean much - but never late with any payments). 
After  paying debt with equity I’ll have around £30K (after stamp duty etc) left which I want to use for new house / savings. 

I am worrying myself silly this will be rejected so can you advise if Halifax accept this type of application? 

Thanks 

@nicky73 I can't comment on the outcome of your specific case, but based on the limited info in your post, you should be fine at low LTV. Generally speaking, it's only at the highest LTVs that Halifax will factor in all current commitments for affordability, even if they are to be repaid before/on completion.

K_S

druan7 said:

Hi, I've been speaking to a broker and I've had an agreement in principle from Metro Bank. I've been looking at their lending criteria myself, and it says that they use Equifax as their credit referencing agency, and that they would decline an application if they can see evidence of previous payday lending. I was stupid enough to take out payday loans in the past (over 4 years ago now), but these don’t show on my Equifax report for whatever reason. Do you know if they only use Equifax for an application, or would they look at Transunion or Experian reports as well?

@druan7 Afaik, it's only Equifax.

K_S

EM_DM said:

@K_S

Hi I was wondering if you could put our minds at ease, we have applied to newbury for a shared ownership and using a broker 5% deposit on £125k mortgage AIP came back fine and I am lead to believe newbury do a hard credit search. Our application has gone in. 

My overdraft is £1000 but only in it £400 max and is cleared every month when pay goes in, partner has circa £1500 (positive) in current account would that off set one another on a joint application?

We have also found out that we forgot to but a credit card on the application which has an outstanding balance of £200 what can we do with this as with the underwriters already?

We are just worried that the underwriters will say no.

ANY HELP PLEASE!

@em_dm

- You are correct, Newbury is a hard-footprint at DIP

- Unless you are absolutely at the limit of your max borrowing, it's very unlikely that a cc balance of £200 (which equates to about £6-10/month outgoing for most lenders) will make any difference either way

- Sorry, not sure what your question is re the OD

I wouldn't worry too much. Your broker will have spent a good amount of time and effort up to this stage given that it's an SO app and will a non-mainstream lender. They wouldn't go to all that trouble if they weren't confident of it going through. I hope the offer comes through soon, good luck!

EM_DM

@K_S

Thank you!

Apologies; I am in my overdraft by £400 a month that is cleared every month and no where near the £1000 limit, I'm assuming being in a overdraft isn't ideal in any circumstance and I was wondering because my partners bank account is healthy if the one would out weigh the other as it is a joint app.

Thank you or your help

FSL13

@K_S

I am a first time buyer, have had a mortgage offer accepted with Natwest for 130.5k, with a 20k deposit. However subsequent surveys have revealed some damp issues so have renegotiated the price to 123k, the difference will be needed to spend on the damp work that needs doing right before I move in.

I rang Natwest to discuss this with them and they were incredibly unhelpful and said they could not say anything that might constitute advice. I believe I legally had to inform them the property price is now 123k which I did, but said I needed the difference to do the damp work. She noted the file and said someone will probably be in touch.

My question is, will I still get the difference to spend on the damp. If not what am I meant to do as i do not have 7k spare cash to spend on the unforeseen work that is going to need doing. How will Natwest administer this? Is there anything else I need to do?

Thanks

K_S

FSL13 said:

@K_S

I am a first time buyer, have had a mortgage offer accepted with Natwest for 130.5k, with a 20k deposit. However subsequent surveys have revealed some damp issues so have renegotiated the price to 123k, the difference will be needed to spend on the damp work that needs doing right before I move in.

I rang Natwest to discuss this with them and they were incredibly unhelpful and said they could not say anything that might constitute advice. I believe I legally had to inform them the property price is now 123k which I did, but said I needed the difference to do the damp work. She noted the file and said someone will probably be in touch.

My question is, will I still get the difference to spend on the damp. If not what am I meant to do as i do not have 7k spare cash to spend on the unforeseen work that is going to need doing. How will Natwest administer this? Is there anything else I need to do?

Thanks

@fsl13 Yes, you are right that you need to inform your broker or lender (if direct) of the new purchase price as the lender will need to reissue the offer with the lower purchase price of 123k.

You can keep the loan size the same, but there could be a problem.

Old LTV - 110.5k loan on a value of 130.5, so 84.7% ie an 85% LTV product
New LTV - 110.5k loan on a value of 123k, so 89.8%, ie a 90% LTV product

The alternative (to stay within 85% LTV) would be to reduce the loan size by 6k by increasing the deposit. to 104.5k.

I hope that makes sense.

FSL13

@K_S that makes more sense than I got in 10 minute on the phone with them. I do not really have the funds to increase my deposit as 20k was at the limit of what I had anyway, do I have any other options? Moving from 85% to 90% is going to really mess up my interest rate I would assume

K_S

FSL13 said:

@K_S that makes more sense than I got in 10 minute on the phone with them. I do not really have the funds to increase my deposit as 20k was at the limit of what I had anyway, do I have any other options? Moving from 85% to 90% is going to really mess up my interest rate I would assume

@fsl13 Sorry, perhaps I've confused you.

You don't *need* any extra money to keep the same 85% LTV product for the mortgage. Given that the new purchase price is 123k, a 15% deposit is £18,450, which you already have.

That will leave you with £1,550 spare from the 20k deposit that you have which may not be sufficient for the work that you need to do, but you can always choose to do it slowly over time.

If you want to do the above, all you need to tell NatWest is that you need an amended offer for the new purchase price of 123k and a new loan size of 104.5k. So still within 85% LTV so no change to the product/rate.

It's only if you want to keep the loan-size unchanged at 110.5k that the LTV issue arises and you'll have to give up your current rate for a higher 90% LTV one (and qualify for the 90% LTV product). In this case, the deposit goes down to 12.5k and you are left with 7.5k cash to do any work that you need to.

FSL13

@K_S

What you said makes total sense to me. So basically I save 1.5k but would still need to find the other 4k (initial cost of work would be 5.5k but other things would need doing medium term for 2k) initially to do the work.
 
How much extra would a mortgage cost based on 90% LTV than 85% LTV for a 123k house? Would a better bet to try get a loan or pay for the work on a credit card (I have really good credit and have 10k of unused CC credit)