Mortgage broker - ask me anything

K_S

Squibble said:

Hi,

I have a BTL mortgage with BM - looking to see if can get a further advance from them to release some equity rather than re-mortgage as in a fixed period and will have a hefty ERC to pay. What will I be required to provide? thanks

@squibble The exact requirements will depend on what the BM system throws up, but generally speaking it'll be very similar to taking out a new mortgage -
- proof of income (payslip if PAYE employed, SA302s if self-employed, etc.)
- proof of rental income (could be just the tenancy agreement, could be that plus statements, etc.) 

K_S

Nikster73 said:

I'm looking for some advice please.  I've had an offer from Natwest - 5 year fixed deal at 3.22% .  We will be hoping to move house within 5 years.  Am I better taking a 2 year fixed deal? And can the offer be simply changed over from a 5 year to a 2 year, without any complications? 

Thanks 

@nikster73 Can't comment on the 2yr vs 5yr question, there are a lot of aspects involved.

NatWest sometimes allows a higher amount of borrowing on a 5 year fix. If you are still able to get the required borrowing on a 2 year fix, then it should be fairly straightforward. However, you will likely be looking at a current 2 year fix, not what was available back when you took out the 5 year one, if that makes sense.

If you have a broker, just drop them a note and see what they say. Alternatively, you could try playing around with the NatWest calculator here to see what it says
https://spa.mortgages.natwest.com/calculator/residential-affordability

K_S

jimbo83 said:

Hi 

We are coming to end of our fixed rate and have been offered very similar rates for 5 year and 10 year fixed.

The 5 year fixed is slightly below 3.5% and the 10 year slightly above. Our current rate is circa 2%. 

What would you advice be around which term to go for? 

Ordinarily we would fix for 5 years but how do you view the 10 year fixed given where we are economically at the moment?

Thanks 

@jimbo83 What will turn out to be most cost-effective in hindsight will depend on future interest rates. And on that topic, your guess is as good as mine. 5 years ago, I didn't predict that 60% LTV rates would be around 1%-1.2% in 2021 or ~3.5% in 2022, so my record in this matter is quite poor

If you don't expect to move for 10 years, are happy with a 3.5% rate and willing to accept the risk of not being able to take advantage if rates are lower in 5/7 years time, then you should consider a 10 year fix.

sully1311

Hi,
I'm looking to do a mortgage switch with HSBC (existing mortgage) ASAP when I do not have to pay a ERC. 

When getting a product transfer/switch, can you add the product fee to the balance?

Sarahf

K_S said:

Sarahf said:

Hi, My current situation is I am looking to remortgage to get additional borrowing to clear debts of around £25k, existing mortgage is just under £60k. I tried additional borrowing with my current lender (halifax) and was declined. The current value of property is around £260k so I don't understand when we have £200k equity in the house they said no. My question is if I go to a different lender, I.e. Nationwide, could I take out a brand new mortgage for £85k. Only ever missed 2 payments, Jan and Feb 21 due to lockdown but paid these when hubby got Swiss grant. For info, I work ft, secure job £29k a year, hubby is a driving instructor, profits Apr 21 £8k but April 22 £15k as things have got back to pre covid. Sorry for the long post i have 2 dependant children aswell. 

@sarahf Yes, you could move to a different lender (it would be a debt-consolidation remortgage) though you may need to pay ERC to Halifax if you're currently in a fixed period.

If you are looking at moving lenders, I would recommend getting in touch with a broker who can look at the whole scenario and advise you accordingly. The MSE guide here can help you find one, including fee-free options.
https://www.moneysavingexpert.com/mortgages/best-mortgages-cashback/#step3

Good luck!

When they look at affordability etc, say I wanted to take out over 10 years if they said no to that would they then say but if you did it over 12 that would be ok?  

K_S

Sarahf said:

K_S said:

Sarahf said:

Hi, My current situation is I am looking to remortgage to get additional borrowing to clear debts of around £25k, existing mortgage is just under £60k. I tried additional borrowing with my current lender (halifax) and was declined. The current value of property is around £260k so I don't understand when we have £200k equity in the house they said no. My question is if I go to a different lender, I.e. Nationwide, could I take out a brand new mortgage for £85k. Only ever missed 2 payments, Jan and Feb 21 due to lockdown but paid these when hubby got Swiss grant. For info, I work ft, secure job £29k a year, hubby is a driving instructor, profits Apr 21 £8k but April 22 £15k as things have got back to pre covid. Sorry for the long post i have 2 dependant children aswell. 

@sarahf Yes, you could move to a different lender (it would be a debt-consolidation remortgage) though you may need to pay ERC to Halifax if you're currently in a fixed period.

If you are looking at moving lenders, I would recommend getting in touch with a broker who can look at the whole scenario and advise you accordingly. The MSE guide here can help you find one, including fee-free options.
https://www.moneysavingexpert.com/mortgages/best-mortgages-cashback/#step3

Good luck!

When they look at affordability etc, say I wanted to take out over 10 years if they said no to that would they then say but if you did it over 12 that would be ok?  

@sarahf The short answer to your question is yes. Their job is to get you what you need and if a longer term will make that possible, then that's what they will suggest. And tbh you can always take out a longer term and then overpay to achieve the same interest savings as a shorter term.
https://blog.moneysavingexpert.com/2014/10/dont-shorten-your-mortgage-term-if-you-can-overpay/

BigBoss

Great thread!

• My partner and I are FTBers and we have seen a property that we like and have made an offer. The property is exactly the same size/council tax band as our current rental property so the costs/bills should be very similar. 
• We have no dependents, pets or vehicles, or travel costs because we work 100% from home.
• We earn around 85k combined and have an AIP from L&C for 91% of the property’s value.
• We have around 11% deposit.
• We checked our credit files through CheckMyFile and my partner's is rated highly (around 870) whereas mine was around 691 ('fair') with 2 'adverse accounts listed'
• The adverse accounts were: 1) One late credit card payment in August 2017 2) A credit card that I had an ‘Arrangement to Pay’ until July 2021 because I had no spare money during my MSc degree. I cleared the entire card in July 2021. 
• 2/3 credit referencing agencies are showing that 'AR' lasted until July 2022, which is one year incorrect. Experian is showing that it was correctly cleared at this time. I am I the process of correcting those two incorrect showings.
• I made myself bankrupt in 2008, but this doesn’t show on my credit file AT ALL.
• Our current personal affordability is excellent - we spend way below the ONS averages in all areas, and have been pretty well immune to the cost of living rises of late and have used accounting software to document all of this.
• What are our chances of being accepted? Should we go to a specialist broker or is our situation straightforward?

K_S

BigBoss said:

Great thread!

• My partner and I are FTBers and we have seen a property that we like and have made an offer. The property is exactly the same size/council tax band as our current rental property so the costs/bills should be very similar. 
• We have no dependents, pets or vehicles, or travel costs because we work 100% from home.
• We earn around 85k combined and have an AIP from L&C for 91% of the property’s value.
• We have around 11% deposit.
• We checked our credit files through CheckMyFile and my partner's is rated highly (around 870) whereas mine was around 691 ('fair') with 2 'adverse accounts listed'
• The adverse accounts were: 1) One late credit card payment in August 2017 2) A credit card that I had an ‘Arrangement to Pay’ until July 2021 because I had no spare money during my MSc degree. I cleared the entire card in July 2021. 
• 2/3 credit referencing agencies are showing that 'AR' lasted until July 2022, which is one year incorrect. Experian is showing that it was correctly cleared at this time. I am I the process of correcting those two incorrect showings.
• I made myself bankrupt in 2008, but this doesn’t show on my credit file AT ALL.
• Our current personal affordability is excellent - we spend way below the ONS averages in all areas, and have been pretty well immune to the cost of living rises of late and have used accounting software to document all of this.
• What are our chances of being accepted? Should we go to a specialist broker or is our situation straightforward?

@bigboss I've only given it a quick read so hopefully haven't missed anything! Quick thoughts -

- the main potential issue I see are the AR markers on your report, especially since you're looking at 90/95% LTV. Equifax showing AR markers until last month is quite likely to be an issue with lenders that use Equifax. So if you aren't in any hurry to put in an application, it would be worth waiting to get the errors fixed on your Equifax and Transunion reports.

- but if your broker has seen all your credit reports, taken it into account, and the AIP has a specific lender's name on it, then I wouldn't be too worried

- other than a couple of lenders that will not lend to ex-BR applicants, that should not be an issue

- you haven't mentioned the loan size but if it's at/below 4.5x then that's not a relevant factor

I don't see enough on there to say that you need a 'specialist' broker, just a good one.

BigBoss

K_S said:

BigBoss said:

Great thread!

• My partner and I are FTBers and we have seen a property that we like and have made an offer. The property is exactly the same size/council tax band as our current rental property so the costs/bills should be very similar. 
• We have no dependents, pets or vehicles, or travel costs because we work 100% from home.
• We earn around 85k combined and have an AIP from L&C for 91% of the property’s value.
• We have around 11% deposit.
• We checked our credit files through CheckMyFile and my partner's is rated highly (around 870) whereas mine was around 691 ('fair') with 2 'adverse accounts listed'
• The adverse accounts were: 1) One late credit card payment in August 2017 2) A credit card that I had an ‘Arrangement to Pay’ until July 2021 because I had no spare money during my MSc degree. I cleared the entire card in July 2021. 
• 2/3 credit referencing agencies are showing that 'AR' lasted until July 2022, which is one year incorrect. Experian is showing that it was correctly cleared at this time. I am I the process of correcting those two incorrect showings.
• I made myself bankrupt in 2008, but this doesn’t show on my credit file AT ALL.
• Our current personal affordability is excellent - we spend way below the ONS averages in all areas, and have been pretty well immune to the cost of living rises of late and have used accounting software to document all of this.
• What are our chances of being accepted? Should we go to a specialist broker or is our situation straightforward?

@bigboss I've only given it a quick read so hopefully haven't missed anything! Quick thoughts -

- the main potential issue I see are the AR markers on your report, especially since you're looking at 90/95% LTV. Equifax showing AR markers until last month is quite likely to be an issue with lenders that use Equifax. So if you aren't in any hurry to put in an application, it would be worth waiting to get the errors fixed on your Equifax and Transunion reports.

- but if your broker has seen all your credit reports, taken it into account, and the AIP has a specific lender's name on it, then I wouldn't be too worried

- other than a couple of lenders that will not lend to ex-BR applicants, that should not be an issue

- you haven't mentioned the loan size but if it's at/below 4.5x then that's not a relevant factor

I don't see enough on there to say that you need a 'specialist' broker, just a good one.

Hi there, thanks for your quick response.

• The loan we are asking for IS around 4.8x according to the L&C AIP.
• The 'AR' tags are definitely incorrect as I cleared the balance on 25 Nov 2021. (I'm assuming that clearing a balance automatically quashes an arrangement to pay?) 
• I've contacted the bank this morning and they are currently processing this with their collections team. They've implicitly acknowledged that this was an error on their part as they did not clear their own records after I'd paid in full. I've also lodged disputes with Equifax, Transunion and CheckMyFile. (I figured that attacking it from all angles might lead to a quicker resolution).
• Also, would a strong reference from my current landlord (who is a developer himself) to show that I have been a consistent payer or 32 months be considered in our mortgage application at all?

TJJones123

We’ve just received our mortgage offer with Halifax. My dad is kindly gifting me a car, but I will need to insure it. With all the upfront costs we’ve paid out recently, I would rather pay the insurance monthly, but will this impact us negatively when they do a final credit check before completion, or is it only things like buying a car on finance that they look at? Thank you!