Mortgage broker - ask me anything

7sefton

Looking for some advice please - my partner and I are in the middle of a direct application with Santander. Our mortgage has been accepted, but waiting on them to value property before issuing the offer. 

Meanwhile, I have been offered a new job (same industry and similar role, but much higher salary). We debated whether to tell the lender this (as it’s unlikely they will check our finances again) but decided it’s best to be upfront just in case they do a last minute employment check before completion. 

The question is: do we tell them now, or after the offer has been issued? Will it make any difference? Will they be less inclined to send the case back to the underwriters once the offer has been sent? 

We have checked, and Santander seem to be happy to accept a contract as proof of employment - also, we aren’t asking to increase the size of the loan, and there will be no gap in my employment history. 

Thanks! 

Moffatt95

Hi, 
I’m hoping someone can clarify a few things for me. 

I currently have bad credit with defaults roughly 1-2 years old, but me and my girlfriend have went through a bad credit broker to match us with our AIP. 

We have a sizeable deposit with LTV of just less than 50%, and will be taking out a mortgage with a 2 year fixed rate at 4.45% 

we were wondering is every mortgage remortgable? (If that’s a word)

Our hope is that, in 2 years time we can remortgage to a slightly better fixed interest rate, and then again 2 years later as my defaults should be off my file by then.  

We don’t want to commit to this mortgage for the full 20 years if we cannot remortgage, as we hope to have kids one day in the future and the extra funds we would rather keep aside for them. 

Thanks for any help, any additional information you require just let me know. 

K_S

Moffatt95 said:

Hi, 
I’m hoping someone can clarify a few things for me. 

I currently have bad credit with defaults roughly 1-2 years old, but me and my girlfriend have went through a bad credit broker to match us with our AIP. 

We have a sizeable deposit with LTV of just less than 50%, and will be taking out a mortgage with a 2 year fixed rate at 4.45% 

we were wondering is every mortgage remortgable? (If that’s a word)

Our hope is that, in 2 years time we can remortgage to a slightly better fixed interest rate, and then again 2 years later as my defaults should be off my file by then.  

We don’t want to commit to this mortgage for the full 20 years if we cannot remortgage, as we hope to have kids one day in the future and the extra funds we would rather keep aside for them. 

Thanks for any help, any additional information you require just let me know. 

@moffatt95 Yes, there's nothing stopping you from remortgaging away at the end of your fix in 2 years. Whether or not you'll get a better rate at the time will depend both on the state of your credit files and the rate environment at the time.

Given that a 60% LTV 2 year fix with Nationwide is 3.4-3.7% at the moment, your rate isn't too bad tbh.

snowqueen555

From a brokers perspective, how difficult is it to get mortgages for flats above shops and is this enough to make them worth avoiding. Is it overblown, because a broker will say it's not too bad, but regular buyers say otherwise.

K_S

snowqueen555 said:

From a brokers perspective, how difficult is it to get mortgages for flats above shops and is this enough to make them worth avoiding. Is it overblown, because a broker will say it's not too bad, but regular buyers say otherwise.

@snowqueen555 Very very generally speaking, not very difficult in London (as there are rarely any saleability issues and even above-commercial flats have a relatively high value), but can be difficult outside depending on the location and price.

Normally, if there are mortgageability issues, that will reflect in the price. So if the price is right and the property meets your requirements, it's worth considering.

But as you rightly say, there's an element of individual preference there as well. If you have to hunt around a bit for the right lender, then your prospective buyers will likely have the same issue, so you can't expect it to fly off the shelf if that makes sense.

You need to keep in mind that future changes in planning laws can also make a difference, for the better or worse. A few years ago, there was less of an issue with above-commercial flats but in 2014-15 the planning laws liberalised (Permitted Development Rights) to the extent that a solicitor's office (A1/A2) can change into a restaurant (A3) for a 2 year period (and then a review after that) without any consultation required. Lenders naturally became more cautious about above-commercial properties then.

snowqueen555

K_S said:

snowqueen555 said:

From a brokers perspective, how difficult is it to get mortgages for flats above shops and is this enough to make them worth avoiding. Is it overblown, because a broker will say it's not too bad, but regular buyers say otherwise.

@snowqueen555 Very very generally speaking, not very difficult in London (as there are rarely any saleability issues and even above-commercial flats have a relatively high value), but can be difficult outside depending on the location and price.

Normally, if there are mortgageability issues, that will reflect in the price. So if the price is right and the property meets your requirements, it's worth considering.

But as you rightly say, there's an element of individual preference there as well. If you have to hunt around a bit for the right lender, then your prospective buyers will likely have the same issue, so you can't expect it to fly off the shelf if that makes sense.

You need to keep in mind that future changes in planning laws can also make a difference, for the better or worse. A few years ago, there was less of an issue with above-commercial flats but in 2014-15 the planning laws liberalised (Permitted Development Rights) to the extent that a solicitor's office (A1/A2) can change into a restaurant (A3) for a 2 year period (and then a review after that) without any consultation required. Lenders naturally became more cautious about above-commercial properties then.

This is useful to know, thanks. I'm waiting on the banks valuation, I think I have offered too much.

kylaria

My mortgage broker has admitted that they mishandled my mortgage application (which was then rejected due to their mishandling) and have offered compensation amounting to the difference in payments between that mortgage and the one which we eventually had approved.

From my POV, the difference in interest is contributing to the mortgage balance being higher at the end of the fixed term as well, not just the higher payments for that period, but they've said basically that when they calculate the cost of the mortgage they follow FCA guidelines, which just look at the payments for the fixed period as the total cost and that's why they don't take the remaining balance into account. Does this sound correct? I'm trying to work out if it's worth escalating to the Ombudsman or if I should just take the compensation offered. 

Thanks!

K_S

kylaria said:

My mortgage broker has admitted that they mishandled my mortgage application (which was then rejected due to their mishandling) and have offered compensation amounting to the difference in payments between that mortgage and the one which we eventually had approved.

From my POV, the difference in interest is contributing to the mortgage balance being higher at the end of the fixed term as well, not just the higher payments for that period, but they've said basically that when they calculate the cost of the mortgage they follow FCA guidelines, which just look at the payments for the fixed period as the total cost and that's why they don't take the remaining balance into account. Does this sound correct? I'm trying to work out if it's worth escalating to the Ombudsman or if I should just take the compensation offered. 

Thanks!

@kylaria I would side with the way you've calculated it. Whether or not you think it worth taking to the FOS would depend on the amount at stake and whether or not you need the cash straight away as the FOS complaint can take well over a year for a resolution.

Esiuol_1

We are putting down a deposit of just over 18% (LTV just over 81%)  does a mortgage rate of 3.44% fixed for 5 years sound about right in the current climate?

K_S

Esiuol_1 said:

We are putting down a deposit of just over 18% (LTV just over 81%)  does a mortgage rate of 3.44% fixed for 5 years sound about right in the current climate?

@esiuol_1 Given that Nationwide's 85% LTV resi 5yr fix purchase rate is current 3.49-3.69%, that sounds par for the course.