Mortgage broker - ask me anything

K_S

22225 said:

Dear broker, please help... we have a deposit of 560k and are borrowing or hoping to borrow 318k. Both of us are employed. The price we got accepted on for the house is 886k. We just found out that Nationwide our mortgage provider has done a desktop valuation on it and has undervalued it (they say it's only worth 850k.) However they say its with the underwriters who may still decide to give us the loan???? I dont really understand this. How does that work exactly??

My second worry is that the deposit is partially made up from equity from our house sale. We have just exchanged on our present home and complete in 3 weeks. Then we are moving into my in laws until the new house deal is done. But it's just occurred to me... will this change of address harm my mortgage application with Nationwide??? I am v stressed now. We agreed our sale of our current buyers in January. We didnt want to lose them, so once we had an offer accepted on a house and a DIP we decided to get on with exchanging. Was this a terrible idea?? I'm worried wevecsort of ruined our lives a bit... sorry for hyperbole but please could a broker advise. Our own broker isnt v communicative. Thank you x

@22225 Unless I'm missing something obvious, the down-valuation seems immaterial.

Old LTV - loan size of 326k and purchase price of 886k, so 36.8% LTV. With Nationwide that probably means you have a 60% LTV product.

New LTV - loan size of 326k and purchase price of 850k, so 38.4% LTV. Again, well within 60% LTV so no change to the product or rate that you have applied for.

You already have the deposit and a low enough LTV to make up the difference, so there should be no impact on the mortgage offer, I hope that makes sense.

The change of address should not be an issue, your broker will be best placed to explain the mechanics of getting that changed after you have a mortgage offer issued.

Good luck, hope it comes through soon!

Dalton31

Hi, from your experience can lending criteria be changed/ignored in specific cases? Our ltv is less than 50% and I'm guessing that's why we are being considered as we don't meet one of the criteria. Our broker says we are fine and we have a dip. But I'm not convinced as another broker told us it was impossible regardless of the size of deposit.

I have asked my broker but he's not very forthcoming with this info. He's just said he's cleared it with the lender and it's ok to proceed.

Any thoughts thanks

K_S

Dalton31 said:

Hi, from your experience can lending criteria be changed/ignored in specific cases? Our ltv is less than 50% and I'm guessing that's why we are being considered as we don't meet one of the criteria. Our broker says we are fine and we have a dip. But I'm not convinced as another broker told us it was impossible regardless of the size of deposit.

I have asked my broker but he's not very forthcoming with this info. He's just said he's cleared it with the lender and it's ok to proceed.

Any thoughts thanks

@dalton31 Sorry there's not enough to go on to give a useful opinion. Specifically what criteria are you referring to?

Lenders (even tick-box mainstream ones) sometimes can and do go beyond published criteria (eg: need minimum two years self-employed history, need 2 year bonus track record to consider, can't have any missed payment in 2 years, etc.) on occasion, low LTV can be one of the reasons as can others like the kind of profession, how close to max affordability it is, the kind of employer, loan size., etc, etc.

22225

K_S said:

22225 said:

Dear broker, please help... we have a deposit of 560k and are borrowing or hoping to borrow 318k. Both of us are employed. The price we got accepted on for the house is 886k. We just found out that Nationwide our mortgage provider has done a desktop valuation on it and has undervalued it (they say it's only worth 850k.) However they say its with the underwriters who may still decide to give us the loan???? I dont really understand this. How does that work exactly??

My second worry is that the deposit is partially made up from equity from our house sale. We have just exchanged on our present home and complete in 3 weeks. Then we are moving into my in laws until the new house deal is done. But it's just occurred to me... will this change of address harm my mortgage application with Nationwide??? I am v stressed now. We agreed our sale of our current buyers in January. We didnt want to lose them, so once we had an offer accepted on a house and a DIP we decided to get on with exchanging. Was this a terrible idea?? I'm worried wevecsort of ruined our lives a bit... sorry for hyperbole but please could a broker advise. Our own broker isnt v communicative. Thank you x

@22225 Unless I'm missing something obvious, the down-valuation seems immaterial.

Old LTV - loan size of 326k and purchase price of 886k, so 36.8% LTV. With Nationwide that probably means you have a 60% LTV product.

New LTV - loan size of 326k and purchase price of 850k, so 38.4% LTV. Again, well within 60% LTV so no change to the product or rate that you have applied for.

You already have the deposit and a low enough LTV to make up the difference, so there should be no impact on the mortgage offer, I hope that makes sense.

The change of address should not be an issue, your broker will be best placed to explain the mechanics of getting that changed after you have a mortgage offer issued.

Good luck, hope it comes through soon!

Thanks for responding so quickly I really appreciate it. But does this mean we wont be lent the amount we need from nationwide? I cant get my head round it. Dont we gave to make up the shortfall in cash?

Dalton31

K_S said:

Dalton31 said:

Hi, from your experience can lending criteria be changed/ignored in specific cases? Our ltv is less than 50% and I'm guessing that's why we are being considered as we don't meet one of the criteria. Our broker says we are fine and we have a dip. But I'm not convinced as another broker told us it was impossible regardless of the size of deposit.

I have asked my broker but he's not very forthcoming with this info. He's just said he's cleared it with the lender and it's ok to proceed.

Any thoughts thanks

@dalton31 Sorry there's not enough to go on to give a useful opinion. Specifically what criteria are you referring to?

Lenders (even tick-box mainstream ones) sometimes can and do go beyond published criteria (eg: need minimum two years self-employed history, need 2 year bonus track record to consider, can't have any missed payment in 2 years, etc.) on occasion, low LTV can be one of the reasons as can others like the kind of profession, how close to max affordability it is, the kind of employer, loan size., etc, etc.

Thanks for replying. 
The criteria states they will only expect married couples as a joint application. However I am applying on my own without my wife who will be living in the property with me. This is because of her adverse credit.
Thanks 

K_S

Dalton31 said:

K_S said:

Dalton31 said:

Hi, from your experience can lending criteria be changed/ignored in specific cases? Our ltv is less than 50% and I'm guessing that's why we are being considered as we don't meet one of the criteria. Our broker says we are fine and we have a dip. But I'm not convinced as another broker told us it was impossible regardless of the size of deposit.

I have asked my broker but he's not very forthcoming with this info. He's just said he's cleared it with the lender and it's ok to proceed.

Any thoughts thanks

@dalton31 Sorry there's not enough to go on to give a useful opinion. Specifically what criteria are you referring to?

Lenders (even tick-box mainstream ones) sometimes can and do go beyond published criteria (eg: need minimum two years self-employed history, need 2 year bonus track record to consider, can't have any missed payment in 2 years, etc.) on occasion, low LTV can be one of the reasons as can others like the kind of profession, how close to max affordability it is, the kind of employer, loan size., etc, etc.

Thanks for replying. 
The criteria states they will only expect married couples as a joint application. However I am applying on my own without my wife who will be living in the property with me. This is because of her adverse credit.
Thanks 

@dalton31 Normally, lenders that specify that they expect married couples to apply in joint names will have exceptions to that rule depending on the reason for leaving the spouse off and will consider referrals so that the case can be run past a BDM/underwriter prior to submitting it.

Normally, if they have that criteria (most specialist lenders, a lot of smaller building societies and a few mainstream lenders), they don't usually like the spouse being left off for reasons of adverse credit history and will ask the question to check if that is the case. Just to be clear, this is a general statement.

However, if your broker has confirmed that he has spoken to the BDM/lender and confirmed that they will consider, then it looks like they're happy to see your case as an exception, it's not unknown for that to happen. I wouldn't worry too much at this stage, there's no real reason for your broker to go through all the work up to a full application unless he was fairly confident of a positive outcome.

K_S

22225 said:

K_S said:

22225 said:

Dear broker, please help... we have a deposit of 560k and are borrowing or hoping to borrow 318k. Both of us are employed. The price we got accepted on for the house is 886k. We just found out that Nationwide our mortgage provider has done a desktop valuation on it and has undervalued it (they say it's only worth 850k.) However they say its with the underwriters who may still decide to give us the loan???? I dont really understand this. How does that work exactly??

My second worry is that the deposit is partially made up from equity from our house sale. We have just exchanged on our present home and complete in 3 weeks. Then we are moving into my in laws until the new house deal is done. But it's just occurred to me... will this change of address harm my mortgage application with Nationwide??? I am v stressed now. We agreed our sale of our current buyers in January. We didnt want to lose them, so once we had an offer accepted on a house and a DIP we decided to get on with exchanging. Was this a terrible idea?? I'm worried wevecsort of ruined our lives a bit... sorry for hyperbole but please could a broker advise. Our own broker isnt v communicative. Thank you x

@22225 Unless I'm missing something obvious, the down-valuation seems immaterial.

Old LTV - loan size of 326k and purchase price of 886k, so 36.8% LTV. With Nationwide that probably means you have a 60% LTV product.

New LTV - loan size of 326k and purchase price of 850k, so 38.4% LTV. Again, well within 60% LTV so no change to the product or rate that you have applied for.

You already have the deposit and a low enough LTV to make up the difference, so there should be no impact on the mortgage offer, I hope that makes sense.

The change of address should not be an issue, your broker will be best placed to explain the mechanics of getting that changed after you have a mortgage offer issued.

Good luck, hope it comes through soon!

Thanks for responding so quickly I really appreciate it. But does this mean we wont be lent the amount we need from nationwide? I cant get my head round it. Dont we gave to make up the shortfall in cash?

@22225 You don't need any extra deposit.

Previously your purchase price was 886k, loan size was 326k, deposit (difference between purchase price and loan size) is 560k and lender LTV was 36.8%.

Now your purchase price is still 886k, loan size is still 326k, deposit (difference between purchase price and loan size) is still 560k and lender LTV has gone up slightly to 38.4%.

You are not asking Nationwide to lend you any extra cash and you are not increasing the risk to Nationwide as the LTV is still well within the product LTV (60% I'm guessing?) you have applied for. So as far as they are concerned, it shouldn't make any difference for them.

22225

Dear K_S
Sorry im not v good at using quotes.. pls forgive me and thanks for all ur help 
Sorry yo be dense, but I thought if a bank undervalued a property it would not want to lend the agreed money on it in case it had to be somd. I didn't think they wanted to bet on an inflated asset. Are u saying that if the LtV is ok then they dont mind?

22225

I guess maybe I just have misunderstood the whole down valuation thing? My understanding of it was that if the property wasnt worth the amount agreed upon, banks would not want to lend on it? In case they couldn't get their money back if there was a distressed sale? Or have I basically not really grasped this right? As in, if you have a bigger enough deposit they are more relaxed? Thsnk you and i won't bother you again!!

K_S

@2225 You are right, it's the large deposit/low-LTV that makes the small down-valuation immaterial.

As far as Nationwide is concerned, for a 60% LTV product (which is probably what you have, the illustration provided by the broker should tell you), the maximum they will lend is 60% of their valuation of the property and the risk is priced accordingly.

Whether the valuation is 886k or 850k or 800k or even 700k, your required loan size of 326k is still well within 60% LTV, so there is no increased risk to the lender as far as the mortgage is concerned.