Mortgage broker - ask me anything

K_S

bubby08 said:

@K_S I received feedback regarding the decline decision one part was use of overdraft in business banking account, another issue was my default. As it happens the valuation was 0 so would have been declined anyway.  May I ask, surely the lender was aware of the default when I got a DIP? Why would it be an issue now? Regarding the valuation I have spoken to the valuation agency and nationwide and both are in agreement that despite renovations I meet the criteria so i don’t know why the valuer has taken it up in himself to suggest a valuation of zero??  My broker suggest due to a change in how Halifax calculate self employed salary that they are now the best option. However I am concerned that despite being able to clearly demonstrate affordability and my LTV being less than 55% that another mainstream lenders underwriter may take exception to this historical default and my self employed status. I would also need to find out `Halifax’s criteria for valuation when undergoing renovations. From your experience is Halifax even viable?

thanks 

@bubby08 There are lot of different things in your post to unpack. I'm going by memory so apologies if I'm confusing you for another forumite.

The zero val - not entirely a surprise if your house is in the midst of undergoing major renovation and unoccupied at the moment. It's down to the subjective opinion of the valuer and there's no guarantee that the Halifax Val won't return the same result.

Historic default - with mainstream lenders, it can always cause a decline when the underwriter assesses it in combination with the rest of what they see. Again, there's a lot of subjectivity involved

Self-employed income - Very very generally speaking, if you have 2 years SA302s+TYOs, Halifax are less nit-picky than Nationwide.

Is it not an option to complete the renovations and then remortgage or do you need the remortgage funds to complete it?

K_S

Maximus5 said:

Hi, I’ve had my mortgage offer through From CBS this week. Unfortunately due to our sale falling through the home we were purchasing has been re marketed and sold. 

I’ve been told we should be able to do a change of property for the same offer but I wondered if you know how this works on the amount, whether more or less than the 200k price of the property we were going to buy?

@maximus5 Haven't done this for CBS recently so can't describe the mechanics. But generally speaking, as long as it's still in the same LTV band, you should be able to keep the same product. 

K_S

raygcon said:

Any idea why would the lender ( Barclays ) want to review mortgage in principle again after it's been underwriting and valuation ( which has all passed ) ? I just got the response from my case manager that this happened and it will take another week for them to reach the decision. It doesn't seems to make much sense to me as I thought AIP is only used for indication and not an agreement by any mean.

@raygcon Apologies, I have no idea how Barclays direct applications work. Perhaps if you post in the main forum someone might be able to comment usefully.

K_S

segovia1 said:

Crystal ball question!

I understand that some lenders' 2 year fixes are currently more expensive than their 5 year fixes - which sort of suggests that they expect rates to be lower in the medium term.  I'm expecting to remortgage next May (60% LTV) and wondering if rates might be lower then.  I could remortgage now without an ERC, though, so I'm wondering if I should just go for the fix now whilst I can.  I'm currently on 1.94% and lucky in that affordability is not a big issue for me so if rates are 2.5% or 3.5% won't make a big difference.

@segovia1 Other than lender BDMs telling me that mortgage rates are expected to rise in the short term, I'm as clueless as the next person as to what will happen in 2-5 years time

Setting aside my mortgage broker hat, for my recent personal remortgage I took out a 2-year no-ERC tracker product as I don't like fixing for longer than 2 years and don't (personally) see the point of paying a large premium (over the tracker) for a 2 year fix.

K_S

Dda37 said:

Me and my partner are in the process of purchasing our first home, offer was accepted in April and we've since had our mortgage offer from Barclays through, had a survey done and the solicitors have began searches etc and doing their thing. 

We don't have any dates for exchanging contracts or completion as of yet.  

Now the curveball, my partner has just been offered a new job, in the same industry and £10k PA more than she is on now. They want her to start sooner than she expected so its likely to occur before we are completed. 

Where do we stand with this, do we need to inform Barclays and is this likely to affect our mortgage offer ? 

@dda37 I don't have an opinion on what you should do, you may want to speak to your broker or Barclays (if direct) about the hypothetical situation.

Ordinarily, Barclays requires one month's payslip in the new job before they will consider that income.

snowqueen555

How low is too low to offer on a flat. I know they tend to go for 10-20% or above where I am in the South West, but is it shooting myself in the foot to offer 10% below?

bubby08

@K_S thanks KS your memory is correct the default is historic and as mentioned previously I know it’s not any kind of guarantee but the default didn’t seem to be issue with the AIP.  

Regarding the valuation what seems strange is although there is a lot of work going on the advisors at nationwide and countrywide both said as long as there is a functional shower or bath/toilet/kitchen sink /place to prepare food/running and hot water/boiler and electrics then it should be fine. It’s not like doesn’t have a roof or anything. This is made further annoying because I can’t actually speak to the valuer and get a gauge of what he thought needed to be done. 

On the basis that nationwide instructed a valuation is it likely Halifax would??

Also I don’t understand what’s changed from 2 months ago that made me not suitable for Halifax to being suitable and warranting such confidence from the broker

thanks as always,

kingstreet

raygcon said:

Any idea why would the lender ( Barclays ) want to review mortgage in principle again after it's been underwriting and valuation ( which has all passed ) ? I just got the response from my case manager that this happened and it will take another week for them to reach the decision. It doesn't seems to make much sense to me as I thought AIP is only used for indication and not an agreement by any mean.

Several lenders, notably Nationwide and Barclays, have a "live" DIP even after the full application has been submitted. If a piece of data comes in which doesn't fit for some reason, the DIP can change to decline or review which tells the UW an explanation or further information is required.

As an example, if verification of part of income is required after payslips are uploaded, this may result in a temporary affordability decline until the verification evidence is received.

metalloz

My mortgage with Halifax is due to expire at the end of June but it is looking like we may be able to exchange just in time. How often do banks recheck affordability etc (and is this done when my solicitor calls the bank to give notice of exchange)? It's been nearly 6 months since I was issued the offer and I am a contractor. My concern is I started salary sacrificing into a pension and if they were to then come back and decline. 

K_S

metalloz said:

My mortgage with Halifax is due to expire at the end of June but it is looking like we may be able to exchange just in time. How often do banks recheck affordability etc (and is this done when my solicitor calls the bank to give notice of exchange)? It's been nearly 6 months since I was issued the offer and I am a contractor. My concern is I started salary sacrificing into a pension and if they were to then come back and decline. 

@metalloz I'm assuming you mean 'complete' just in time? I've never had a case where Halifax asked for fresh income documentation prior to completion so you should be fine.

I don't know how it works direct, but the couple of times that I have needed to select a new Halifax product with a longer expiry for a client because of a delayed completion, it hasn't triggered a requirement for fresh documentation.