Mortgage broker - ask me anything

snowqueen555

If I were to pull out of a sale after offer was accepted last week would there be much financial repercussion (see below for reference as having second thoughts mainly because its above a shop and that I am possibly overpaying)? Conveyancer instructed and they have some of my documents but not much else has happened with them. My broker is applying right now for a mortgage but I figure if that gets accepted I can use that agreement on another property. Thanks

https://forums.moneysavingexpert.com/discussion/6372746/have-i-overpaid-on-this-flat#latest

K_S

snowqueen555 said:

If I were to pull out of a sale after offer was accepted last week would there be much financial repercussion (see below for reference as having second thoughts mainly because its above a shop and that I am possibly overpaying)? Conveyancer instructed and they have some of my documents but not much else has happened with them. My broker is applying right now for a mortgage but I figure if that gets accepted I can use that agreement on another property. Thanks

https://forums.moneysavingexpert.com/discussion/6372746/have-i-overpaid-on-this-flat#latest

@snowqueen555 Quick thoughts -

- Unless it's a no-completion no-fee solicitor, they may charge abortive costs. But if it's just sign-up stuff that you've done until now and you use them for your next property, there shouldn't be any sunk costs.

- don't assume that you can simply change the property on the offer. That depends on the specific lender policy. For example, with Nationwide your broker will have to put in a fresh new application from scratch if you change the property, with HSBC they'll be able to apply to 'transfer' the offer to a new property. Also given that your property is flat above commercial, you are likely to be limited lender-wise, which may not be the case when you find your next property.

GordsPars

Hi!

I have a weird situation that is making it harder to get a mortgage and any advice on it would be greatly appreciated.

I have worked for the same company for the past 3 years. The company is based in North America and I am based in the UK. I'm part of the senior management team and work for them exclusively, permanently, and full-time. Because, however, they are not in the UK, I was not able to be an 'employee' as such, so I worked as a freelancer. With IR35 coming in, that had to change. They were unable to set themselves up in the UK to become my employer over here, so in order to ensure I did not fall foul of the rules on being a deemed employee I established myself as a Ltd company. Every month, my company invoices the North American org for my gross wage + employers NI. I then pay that all out to myself and HMRC entirely as PAYE (with my company issuing me a payslip each month). Noone outside would ever know that I work through my own company. It's simply an arrangement to ensure I pay tax properly.

I've been looking at buying a house with my partner, however when I contact mortgage brokers/providers they just tell me that despite my arrangement, I am still only regarded as purely self-employed and so what they'll lend me is not based on my last 3 months earnings, but on the average of my past 2 years income. That's an issue because in the last 5 months my income has increased by around £20,000 a year. Therefore, I'm able to borrow far less than I would be able to if I was regarded as an employee.

Has anyone else had a similar situation?! Or does anyone have any advice about what can be done to get providers to recognise my new wage?

Any help greatly appreciated. 

Thanks!

K_S

GordsPars said:

Hi!

I have a weird situation that is making it harder to get a mortgage and any advice on it would be greatly appreciated.

I have worked for the same company for the past 3 years. The company is based in North America and I am based in the UK. I'm part of the senior management team and work for them exclusively, permanently, and full-time. Because, however, they are not in the UK, I was not able to be an 'employee' as such, so I worked as a freelancer. With IR35 coming in, that had to change. They were unable to set themselves up in the UK to become my employer over here, so in order to ensure I did not fall foul of the rules on being a deemed employee I established myself as a Ltd company. Every month, my company invoices the North American org for my gross wage + employers NI. I then pay that all out to myself and HMRC entirely as PAYE (with my company issuing me a payslip each month). Noone outside would ever know that I work through my own company. It's simply an arrangement to ensure I pay tax properly.

I've been looking at buying a house with my partner, however when I contact mortgage brokers/providers they just tell me that despite my arrangement, I am still only regarded as purely self-employed and so what they'll lend me is not based on my last 3 months earnings, but on the average of my past 2 years income. That's an issue because in the last 5 months my income has increased by around £20,000 a year. Therefore, I'm able to borrow far less than I would be able to if I was regarded as an employee.

Has anyone else had a similar situation?! Or does anyone have any advice about what can be done to get providers to recognise my new wage?

Any help greatly appreciated. 

Thanks!

@gordspars Based on the limited info in your post, I would say the same, that you will be considered as self-employed given that your 'employer' is the UK company (of which you are the 100% shareholder-director) that invoices the American firm and pays you your UK wages.

If you've spoken to multiple brokers, then I presume they've already looked at whether you may qualify as a day-rate contractor.

JW2709

Hi all, 

I was hoping to get some advice please.  My wife and I are FTB and I have some adverse credit but with what I consider a decent deposit. 

Current financial situation:

• Joint income: £77K (Wife £25K, mine £52K)
• I'm 37 and wife is 36
• Wife receives no additional income or bonus

My bonus previous years- Year 1 gross £6K, this year expected gross £4K
1 dependant aged 7
Wife credit history and file is clean with 1 late payment on a catalogue back in 2020
I have 3 CCJ's

• amount 1 £4K which is removed in March 2023 not satisfied
• amount 2 £1K which is removed in Sep 2023 not satisfied
• amount 3 £450 currently unsatisfied and will be removed in Jan 2025

Other than the above I have no other adverse credit such as late payments or defaults

Outgoings:

We both have credit cards, with some balances, I have £1K and wife have approx £1.5K which we should be able to clear relatively quickly.

I have an unsecured personal loan with current balance of £4K
We pay for school fees which is £1100 per month

We are both FTB and are looking are purchasing a property in 2023 as I figured we'd stand a better chance as 2/3 CCJ's will have dropped off my credit file.

We are using the Lifetime ISA scheme to help save for our deposit.  By April 2023 we will have saved a total of £55K.  Based on multiple calculators I've found via google it seems we can borrow approx £275K given our outgoings which outside of the school fees isn't much.

I expect us to have cleared our credit cards and the loan before applying.

I'd be grateful if you help me understand the following please:

-should we look to wait until Sep until the 2/3 ccj is cleared before applying
-should I look to satisfy the £457ccj
-based on the above ( happy to provide more info) how much do you think we could roughly borrow
-how much of a deposit should we push to save to give us the best chance of getting a mortgage. 
-we were looking at a 32 year term to borrow the max and keep payments at around £1200 per month
-Based on the above should we expect to find it difficult to get a mortgage?

Appreciate any advice and experience in this space please.

simon_or

JW2709 said:

Hi all, 

I was hoping to get some advice please.  My wife and I are FTB and I have some adverse credit but with what I consider a decent deposit. 

Current financial situation:

• Joint income: £77K (Wife £25K, mine £52K)
• I'm 37 and wife is 36
• Wife receives no additional income or bonus

My bonus previous years- Year 1 gross £6K, this year expected gross £4K
1 dependant aged 7
Wife credit history and file is clean with 1 late payment on a catalogue back in 2020
I have 3 CCJ's

• amount 1 £4K which is removed in March 2023 not satisfied
• amount 2 £1K which is removed in Sep 2023 not satisfied
• amount 3 £450 currently unsatisfied and will be removed in Jan 2025

Other than the above I have no other adverse credit such as late payments or defaults

Outgoings:

We both have credit cards, with some balances, I have £1K and wife have approx £1.5K which we should be able to clear relatively quickly.

I have an unsecured personal loan with current balance of £4K
We pay for school fees which is £1100 per month

We are both FTB and are looking are purchasing a property in 2023 as I figured we'd stand a better chance as 2/3 CCJ's will have dropped off my credit file.

We are using the Lifetime ISA scheme to help save for our deposit.  By April 2023 we will have saved a total of £55K.  Based on multiple calculators I've found via google it seems we can borrow approx £275K given our outgoings which outside of the school fees isn't much.

I expect us to have cleared our credit cards and the loan before applying.

I'd be grateful if you help me understand the following please:

-should we look to wait until Sep until the 2/3 ccj is cleared before applying
-should I look to satisfy the £457ccj
-based on the above ( happy to provide more info) how much do you think we could roughly borrow
-how much of a deposit should we push to save to give us the best chance of getting a mortgage. 
-we were looking at a 32 year term to borrow the max and keep payments at around £1200 per month
-Based on the above should we expect to find it difficult to get a mortgage?

Appreciate any advice and experience in this space please.

https://forums.moneysavingexpert.com/discussion/6347945/ftb-mortgage-low-credit-score-and-ccj#latest

Kasper19

Just looking for some clarity. How often or likely is it that an underwriter would give a broker 4 hours to respond to questions they’ve asked or they will immediately close the application?

We are FTB, at 95% LTV and put a full application in with Santander on 29.6 Via broker(passed AIP 28.6). Valuation took place on 12.7. I have heard very little from broker since application. Tried to chase and, finally managed to get in contact yesterday (been on holiday apparently) and he says some questions have come back from the underwriters at 11am yesterday morning and he had 4 hours to answer them or they would not proceed with the application? Is this usual practice? What if broker is away that day? He framed this in a very negative way in respect to our application.

I was expecting the questions as they were relating to a holiday I had from a previous loan whilst I was very unwell in hospital in 2020. 

Nothing out of the ordinary in concerns to the holiday, 3 months at a lower rate whilst I was in hospital then at home recovering from surgery. I couldn’t return to work at that time due to the nature of my job and extent of my operation. I cleared the remaining balance once I returned to work. Never missed a payment and supplied a letter from the lender and loan statement balance to confirm as such. 

Santander asked what happened, why, what address, did the payments default and what have I done to ensure the mortgage will be protected in future. I was able to answer all of them and in a very situation now. I was single with no financial support and having my sick pay reduced at that time, hence the agreed repayment relief. I contacted the loan lender as soon a I found out there may be difficulty so there was never a missed payment or default on the account, now this is a joint application and therefore more in terms of finical support and my job has changed so I wouldn’t need to take that extended period off work in the unlikely I will require future emergency surgeries. 

I’m very worried how this will impact the application and how the broker said it, it wasn’t good and that’s why they had given him 4 hours only to respond. 
 I had informed him prior to application of this event and how it’s detailed on my credit report however he just said it would be fine and took little detail on the matter at the time. 

Many thanks 

 

K_S

@kasper19 I wouldn't worry too much about the "4 hours" deadline. This is the context -

Kasper19

K_S said:

@kasper19 I wouldn't worry too much about the "4 hours" deadline. This is the context -

Thank you! My partner seems to think I’m over worrying about the whole process, as the broker wasn’t too concerned when we put in the application but I know at 95% LTV, the criteria is strict and I’m so nervous it will impact severely on our application. 

GordsPars

K_S said:

GordsPars said:

Hi!

I have a weird situation that is making it harder to get a mortgage and any advice on it would be greatly appreciated.

I have worked for the same company for the past 3 years. The company is based in North America and I am based in the UK. I'm part of the senior management team and work for them exclusively, permanently, and full-time. Because, however, they are not in the UK, I was not able to be an 'employee' as such, so I worked as a freelancer. With IR35 coming in, that had to change. They were unable to set themselves up in the UK to become my employer over here, so in order to ensure I did not fall foul of the rules on being a deemed employee I established myself as a Ltd company. Every month, my company invoices the North American org for my gross wage + employers NI. I then pay that all out to myself and HMRC entirely as PAYE (with my company issuing me a payslip each month). Noone outside would ever know that I work through my own company. It's simply an arrangement to ensure I pay tax properly.

I've been looking at buying a house with my partner, however when I contact mortgage brokers/providers they just tell me that despite my arrangement, I am still only regarded as purely self-employed and so what they'll lend me is not based on my last 3 months earnings, but on the average of my past 2 years income. That's an issue because in the last 5 months my income has increased by around £20,000 a year. Therefore, I'm able to borrow far less than I would be able to if I was regarded as an employee.

Has anyone else had a similar situation?! Or does anyone have any advice about what can be done to get providers to recognise my new wage?

Any help greatly appreciated. 

Thanks!

@gordspars Based on the limited info in your post, I would say the same, that you will be considered as self-employed given that your 'employer' is the UK company (of which you are the 100% shareholder-director) that invoices the American firm and pays you your UK wages.

If you've spoken to multiple brokers, then I presume they've already looked at whether you may qualify as a day-rate contractor.

Thanks so much for this K-S. Apologies for the limited info. FTB so no idea what people need to know. It's very frustrating to have a completely guaranteed monthly income, just as any employee would have, but still only be regarded as self-employed!

As regards contractor mortgages, not had anyone mention them yet but will enquire. Thank you.