Mortgage broker - ask me anything

BigBoss

K_S said:

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

Update:

- I’ve had confirmation from Sainsburys that they were contacted by Equifax and this situation should now be on its way to resolution. 

- The actual scenario being that while a student I completely ran out of money so made an arrangement to pay in July 2021. The balance was cleared (ergo the arrangement to pay) in FULL in November 2021.
- The ONLY other adverse issue on all files is a single late credit card payment in 2017. 
 
I’ve been rejected AIPs from L&C and Halifax with my credit file as it is currently (with the erroneous information on file). What are my chances once the correct info has been added?

lvcol

I have 2 mortgages with Santander as I recently had an extension.  Would like to start to overpay but am confused as to which one to do it on, does It make a difference? Mortgage 1 is the largest amount at 2.39% fixed in the last year of a 5 year fix. Mortgage 2 is the smaller amount at 1.99% fixed in first year of 3 year fix.

K_S

BigBoss said:

K_S said:

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

Update:

- I’ve had confirmation from Sainsburys that they were contacted by Equifax and this situation should now be on its way to resolution. 

- The actual scenario being that while a student I completely ran out of money so made an arrangement to pay in July 2021. The balance was cleared (ergo the arrangement to pay) in FULL in November 2021.
- The ONLY other adverse issue on all files is a single late credit card payment in 2017. 
 
I’ve been rejected AIPs from L&C and Halifax with my credit file as it is currently (with the erroneous information on file). What are my chances once the correct info has been added?

@bigboss Hard to say, depends on what your report looks like, reason for the Halifax DIP decline, your requirements and the rest of the background details. Your broker would be best placed to answer that question.

Halifax uses Experian, so any change on the Equifax report is unlikely to have a material impact either way.

What did the Halifax decline say? Did it give an LTV cap or a straight decline?

BigBoss

K_S said:

@bigboss Hard to say, depends on what your report looks like, reason for the Halifax DIP decline, your requirements and the rest of the background details. Your broker would be best placed to answer that question.

Halifax uses Experian, so any change on the Equifax report is unlikely to have a material impact either way. 

What did the Halifax decline say? Did it give an LTV cap or a straight decline?

Straight decline for “total credit score” being below the approval level. I mentioned Equifax only because they’ve responded quickest - the other agencies have also received a dispute. 

Interestingly, Equifax modified my file immediately and my "score" increased dramatically with them. Now just waiting for the other CRAs to rectify the bank's mistake.

doglover34

Hey this is for my mum, who is just about to re-mortgage.. told her I'd ask the question as she isn't good with computers. Bear with me ... 

So she applied for a mortgage with a broker and got a DIP, and application went in last week - she can track her progress online with the bank BUT she's been putting in her details and they are not recognised. She contacted the bank who advised her that the DOB on the application was different to what she was telling them so the DOB when she logs in isnt recognised and to contact the broker.  The broker said that the DOB is correct and asked her to check her Credit file for a hard search as if it was wrong it would appear.  We've just done this and the hard search is on there.

So 1,... who is wrong here? we cant log in and track this now as the bank wouldnt tell us what dob was entered and will this hold up her application?? 

TIA

Sarahf

K_S said:

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/

So update, Nationwide said no even though both mine & hubby's credit rating is good and only looking for 35% ltv. Am waiting on L & C broker to come back to me but am worried that they won't be able to help either...Will a broker be able to help find a suitable mortgage 

K_S

BigBoss said:

K_S said:

@bigboss Hard to say, depends on what your report looks like, reason for the Halifax DIP decline, your requirements and the rest of the background details. Your broker would be best placed to answer that question.

Halifax uses Experian, so any change on the Equifax report is unlikely to have a material impact either way. 

What did the Halifax decline say? Did it give an LTV cap or a straight decline?

Straight decline for “total credit score” being below the approval level. I mentioned Equifax only because they’ve responded quickest - the other agencies have also received a dispute. 

Interestingly, Equifax modified my file immediately and my "score" increased dramatically with them. Now just waiting for the other CRAs to rectify the bank's mistake.

BigBoss said:

• 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.

@Bigboss Apologies, I went by what you said earlier that your Experian report was showing it correctly.

If the Halifax decline was based on an incorrect Experian report, then there's perhaps a chance for it to change once your Experian report is fixed.

K_S

doglover34 said:

Hey this is for my mum, who is just about to re-mortgage.. told her I'd ask the question as she isn't good with computers. Bear with me ... 

So she applied for a mortgage with a broker and got a DIP, and application went in last week - she can track her progress online with the bank BUT she's been putting in her details and they are not recognised. She contacted the bank who advised her that the DOB on the application was different to what she was telling them so the DOB when she logs in isnt recognised and to contact the broker.  The broker said that the DOB is correct and asked her to check her Credit file for a hard search as if it was wrong it would appear.  We've just done this and the hard search is on there.

So 1,... who is wrong here? we cant log in and track this now as the bank wouldnt tell us what dob was entered and will this hold up her application?? 

TIA

@doglover34 NatWest?

K_S

lvcol said:

I have 2 mortgages with Santander as I recently had an extension.  Would like to start to overpay but am confused as to which one to do it on, does It make a difference? Mortgage 1 is the largest amount at 2.39% fixed in the last year of a 5 year fix. Mortgage 2 is the smaller amount at 1.99% fixed in first year of 3 year fix.

@lvcol Unless I'm missing something obvious, I'd just overpay the 2.39% one.  When you switch products in a few months, that's going to jump to 3%+.

K_S

Sarahf said:

K_S said:

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/

So update, Nationwide said no even though both mine & hubby's credit rating is good and only looking for 35% ltv. Am waiting on L & C broker to come back to me but am worried that they won't be able to help either...Will a broker be able to help find a suitable mortgage 

@sarahf You need to understand what the reason is for Nationwide declining you at low LTV. What is the reason that they gave? Have you looked at your Experian and Equifax credit reports (ignore the credit score number).

If the missed payments in Jan-21 and Feb-21 were for your Halifax mortgage account, then that could be the reason as lenders can take missed payments on mortgages much more seriously than if it were on a credit card. If you haven't already, make sure your broker knows about it and has a copy of both your credit reports.