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Mortgage broker - ask me anything

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  • TJJones123TJJones123 Forumite
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    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!
  • winniemockerwinniemocker Forumite
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    Are you able to give your thoughts on our situation?
    We have seen a property we would like but is likely to sell quickly. We have a mortgage free house that is market ready and could go on Rightmove immediately following a phone call.
    We are worried that the other house will sell before we sell ours.
    We have a good deposit, 33%, of the asking price. Would it be a good idea to take out a 20 year mortgage for the purchase but pay off the mortgage as soon as our present home sells.
    Thank you for any advice you might be able to give us.
  • edited 20 August at 11:05AM
    NannaHNannaH Forumite
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    edited 20 August at 11:05AM
    What percentage rate do Nationwide use when calculating house value rise for the purpose of remortgage?
    My Daughter’s mortgage fix ends on 31 March so she will be looking around in another month or so to fix and remortgage.
    She is currently trying to remove an erronious CCJ caused by a parking fine / house move situation,  it happened in May 21 and only came to light recently. The parking firm are happy to quash it but the court has requested more proof, which she provided and is now waiting. 
    If it’s not removed then presumably Nationwide, her current lender, is her only option?  Hence my question.
    It was a 90% mortgage so is it likely the house, 4 bedroom detached, has risen enough to get her under 85% or even 80% ltv ?   They paid £268000 / pay £1250 a month and similar houses are now advertised at £300k.   Nothing else has been sold in her postcode in the last 18 months so it’s hard to judge.  
    I will advise her to see a broker but wanted some insight first.
    The mortgage is less than 3x joint income,  they earn £50k each. 
  • K_SK_S Forumite, Ambassador
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    BigBoss said:
    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. Not sure what you mean by this, but it's only really worth relying on if it has a lender's name on it. If not, ask your broker to give you a lender AIP/DIP.
    • 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?) It should, but I couldn't really say without knowing what your report looks like exactly
    • 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? No, and neither will the fact that your expenses are lower than the average person. Mainstream lending is based a broad set of assumptions (a lot of it based on your credit report) and multiple factors, they don't really go into that level of detail or personal underwriting. There are some smaller building societies and specialist lenders who may go to the level, but from a cost point of view you want to stick to mainstream lenders.
    @bigboss Quick comments in-line above

    I’m a Forum Ambassador and I support the Forum Team on the 'Mortgages & Endowments', 'House Buying, Renting & Selling' and 'Mortgage-free Wannabe' boards. If you need any help on these boards, do let me know.

    Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.

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    I am a Mortgage Adviser - You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.

  • edited 20 August at 4:16PM
    K_SK_S Forumite, Ambassador
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    edited 20 August at 4:16PM
    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!
    @tjjones123 If you were a client, my general advice would probably be to avoid new finance commitments that will show as debt on your credit report, between offer and completion. But the likelihood of it having an impact or not on you will depend on the specifics.

    I’m a Forum Ambassador and I support the Forum Team on the 'Mortgages & Endowments', 'House Buying, Renting & Selling' and 'Mortgage-free Wannabe' boards. If you need any help on these boards, do let me know.

    Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.

    ------------------------------------------------------------------------------

    I am a Mortgage Adviser - You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.

  • K_SK_S Forumite, Ambassador
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    Are you able to give your thoughts on our situation?
    We have seen a property we would like but is likely to sell quickly. We have a mortgage free house that is market ready and could go on Rightmove immediately following a phone call.
    We are worried that the other house will sell before we sell ours.
    We have a good deposit, 33%, of the asking price. Would it be a good idea to take out a 20 year mortgage for the purchase but pay off the mortgage as soon as our present home sells.
    Thank you for any advice you might be able to give us.
    @winniemocker Can't really say whether it's a good idea or not, but practically speaking, there's nothing stopping you from doing what you propose if your income will support a mortgage of the size that you need.

    I’m a Forum Ambassador and I support the Forum Team on the 'Mortgages & Endowments', 'House Buying, Renting & Selling' and 'Mortgage-free Wannabe' boards. If you need any help on these boards, do let me know.

    Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.

    ------------------------------------------------------------------------------

    I am a Mortgage Adviser - You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.

  • K_SK_S Forumite, Ambassador
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    NannaH said:
    What percentage rate do Nationwide use when calculating house value rise for the purpose of remortgage?
    My Daughter’s mortgage fix ends on 31 March so she will be looking around in another month or so to fix and remortgage.
    She is currently trying to remove an erronious CCJ caused by a parking fine / house move situation,  it happened in May 21 and only came to light recently. The parking firm are happy to quash it but the court has requested more proof, which she provided and is now waiting. 
    If it’s not removed then presumably Nationwide, her current lender, is her only option?  Hence my question.
    It was a 90% mortgage so is it likely the house, 4 bedroom detached, has risen enough to get her under 85% or even 80% ltv ?   They paid £268000 / pay £1250 a month and similar houses are now advertised at £300k.   Nothing else has been sold in her postcode in the last 18 months so it’s hard to judge.  
    I will advise her to see a broker but wanted some insight first.
    The mortgage is less than 3x joint income,  they earn £50k each. 
    @nannah Afaik, Nationwide use the Nationwide HPI. You could perhaps play around with their house price calculator here for a rough estimate https://www.nationwide.co.uk/house-price-index/

    I don't know if this feature is available on the Nationwide login, but with some lenders if you login to your online mortgage account, it shows what the estimated property value is at the moment.

    If your fix is ending 31/03/2023 then you should be able to start looking remortgage (changing lenders) options in October or so and product-switch (staying with Nationwide) from 1st November. A single parking CCJ may or may not stop you from moving lenders, it'll depend on the details. Even if you are limited to Nationwide, their product-switch rates are always competitive so you might not be losing out by much, if at all.

    I’m a Forum Ambassador and I support the Forum Team on the 'Mortgages & Endowments', 'House Buying, Renting & Selling' and 'Mortgage-free Wannabe' boards. If you need any help on these boards, do let me know.

    Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.

    ------------------------------------------------------------------------------

    I am a Mortgage Adviser - You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.

  • edited 21 August at 12:41PM
    brominebromine Forumite
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    edited 21 August at 12:41PM
    I would like to know how a house is valuated for remortgaging. Suppose I buy a house for £250k with 10% deposit in 2022. In 5 years, my initial fix will be coming to an end. At this point, let;s say I have built up equity of 20% (i.e. equity=50k, remaining loan=200k). Would the bank consider any appreciation or depreciation in property price at that time? If yes, how would they do the valuation? For example, If they looked for comparable properties on Rightmove and valued the house at 300k in 2027, does that mean my LTV would automatically become 67% (loan=200k out of property value of 300k)? Have I understood this correctly?
  • K_SK_S Forumite, Ambassador
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    bromine said:
    I would like to know how a house is valuated for remortgaging. Suppose I buy a house for £250k with 10% deposit in 2022. In 5 years, my initial fix will be coming to an end. At this point, let;s say I have built up equity of 20% (i.e. equity=50k, remaining loan=200k). Would the bank consider any appreciation or depreciation in property price at that time? If yes, how would they do the valuation? For example, If they looked for comparable properties on Rightmove and valued the house at 300k in 2027, does that mean my LTV would automatically become 67% (loan=200k out of property value of 300k)? Have I understood this correctly?
    @bromine Your understanding is correct.

    I’m a Forum Ambassador and I support the Forum Team on the 'Mortgages & Endowments', 'House Buying, Renting & Selling' and 'Mortgage-free Wannabe' boards. If you need any help on these boards, do let me know.

    Please note that Ambassadors are not moderators. Any posts you spot in breach of the Forum Rules should be reported via the report button, or by emailing [email protected]. All views are my own and not the official line of MoneySavingExpert.

    ------------------------------------------------------------------------------

    I am a Mortgage Adviser - You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.

  • NannaHNannaH Forumite
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    According to the Hpi,  the house value has increased by 16%,  which would take her to under 75% ltv,  happy days if that’s the case as to fix at their 5 year deal would mean paying the same as she does now at 80% ltv so it should actually be less.  
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