Mortgage broker - ask me anything

Joyousrox

I am in the final stages of a divorce, so will be looking to get a mortgage once I have my share of the marital home. I have been keeping an eye on my credit reports, following the advice on this site to make sure I am in as good standing as possible credit-wise. My only credit card is the John Lewis Partnership card which will be closed at the end of October (they are changing provider). Is it better for me to have one "hard search" as I start a new credit card, or no credit card on my credit record? The timing couldn't be worse for me!

K_S

Joyousrox said:

I am in the final stages of a divorce, so will be looking to get a mortgage once I have my share of the marital home. I have been keeping an eye on my credit reports, following the advice on this site to make sure I am in as good standing as possible credit-wise. My only credit card is the John Lewis Partnership card which will be closed at the end of October (they are changing provider). Is it better for me to have one "hard search" as I start a new credit card, or no credit card on my credit record? The timing couldn't be worse for me!

@Joyousrox Unless you have adverse credit in the background and are borrowing at high LTV, I wouldn't expect one hard footprint credit search or one/none credit cards to make a material difference either way.

spinningsheep

Hey. Really appreciate the chance to ask a question!

I've moved home to my parents to save for a mortgage, finally getting a hold on my finances now, lots of positive payment history, very low monthly outgoings, I'm aiming for a £20k deposit by end of 2023, aim to buy a property around £85k in Stoke on Trent area. I've got various defaults that will fall off my credit file during late 22/early 23, but have a settled CCJ that will fall off in April 24. My concern is if interest rates and property prices rise, my deposit will be less meaningful and I may end up having to delay purchase until late 24 earliest. Would I be better waiting till the CCJ is gone then take my chances on what I can afford, or, jump into purchase in late 23 with the CCJ on file and have to go subprime. Would there be much difference in monthly payment/interest rate on high St vs sub prime?

Thanks again in advance from a property ladder newbie. 

tab99uk

hi

how do i make a complaint about a broker the mortgage was for a 230k  he got me 131k for first mortgage the second mortgage was for 90k 2 buy to let mortgages got refused 1 with natwest  due to house not having investors in the area with  the second with santader refused no reason given.

he charged me half of the mortgage amount upfront and half when mortgage is compete i got a mortgage with trussle Birmingham midhsires for free it took him 6 months still no buy to let mortgage.

he failed to get me mortgage and he wont refund saying he did work for me i nearly lost the house because of him  it was 2 month since the moratge got refused with santader he never contacted me or put another application in and was very slow to reply to my messages or calls.

JW2709

K_S said:

JW2709 said:

Hi- FTB here...employed (not self employed)

Apologise in advance for what might seem like a stupid question.  Do mortgage lenders look at gross pay or net pay on payslips?

Reason I ask is that the company I work for is moving to a salary sacrifice scheme for our company cars which means that they will be paying me a car allowance and then deducting the total cost pre-tax (which will be more than the allowance they are providing, which I am fine with).  I'm worried that the car payments will impact how much I can borrow.  

Any thoughts/advice?

@jw2709 Generally speaking, for PAYE applicants, lenders will start with the gross pay and apply deductions based on their I individual policies/processes.

Exactly what impact (if any) your salary sacrifice deductions will have on your borrowing capacity depends on the specific lender, the details, what it looks like on your payslip, etc.

Based on the limited info into your post, if I've understood it correctly, the gross pay considered by most lenders is likely to be your basic + car allowance - car deduction. But again, it may differ across lenders depending on how it's worded and where it shows on the payslips.

thanks for the advice @K_S

Before I commit to taking the car I wanted to know the impact as I need to make a decision in the coming weeks but will not be applying for the mortgage for at least 6 months.

Currently my payslips is shown in the following way

Salary                    4269
Flex holiday sell     82
P-sip shares         -81
Smart Pensions   -213

Total Earnings       4057

Then leads on to my NI and Tax deductions.  Im not clear on how the additional car allowance of £6500 per year will be shown and how the car salary sacrifice of £1128 will be shown in terms of text etc but I'm confident in saying that both mentioned will be listed under salary before tax and NI.

I'd like to understand if the likely hood is that my mortgage application will be based on the 4269(salary) or total earnings number (post salary sacrifice).  I'm checking affordability calculators but obviously the difference in which number to use will impact the borrowing amount.  

K_S

tab99uk said:

hi

how do i make a complaint about a broker the mortgage was for a 230k  he got me 131k for first mortgage the second mortgage was for 90k 2 buy to let mortgages got refused 1 with natwest  due to house not having investors in the area with  the second with santader refused no reason given.

he charged me half of the mortgage amount upfront and half when mortgage is compete i got a mortgage with trussle Birmingham midhsires for free it took him 6 months still no buy to let mortgage.

he failed to get me mortgage and he wont refund saying he did work for me i nearly lost the house because of him  it was 2 month since the moratge got refused with santader he never contacted me or put another application in and was very slow to reply to my messages or calls.

@tab99uk The broker's terms of business will usually tell you how to make a complaint. If you can't find that, then just look up the firm on the FCA https://register.fca.org.uk/s/ , the entry should have contact details on how to make a complaint.

K_S

spinningsheep said:

Hey. Really appreciate the chance to ask a question!

I've moved home to my parents to save for a mortgage, finally getting a hold on my finances now, lots of positive payment history, very low monthky outgoings, I'm aiming for a £20k deposit by end of 2023, aim to buy a property around £85k in Stoke on Trent area. I've got various defaults that will fall off my credit file during late 22/early 23, but have a settled CCJ that will fall off in April 24. My concern is if interest rates and property prices rise, my deposit will be less meaningful and I may end up having to delay purchase until late 24 earliest. Would I be better waiting till the CCJ is gone then take my chances on what I can afford, or, jump into purchase in late 23 with the CCJ on file and have to go subprime. Would there be much difference in monthly payment/interest rate on high St vs sub prime?

Thanks again in advance from a property ladder newbie. 

@spinningsheep As of today your defaults were all registered more than 5 years ago, and the CCJ more than 4 years ago.

It's hard to predict rates, difference between prime and sub-prime rates, property prices etc., and all of these will play a part in what turns up to be the "best" decision in hindsight. With respect to what you are eligible for, that will depend on the exact contents of your credit report, your income, debt and relevant background details.

To give you an example, based on the limited info in your post, you may qualify for a 95% LTV mortgage (so £4,250 deposit) today with a specialist lender. The rate (as of today) will be around 6-6.5% and the comparable high street rate is around 4-4.5%. You can plug in rates and numbers here to see what that means for monthly payments 
https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator/

The rates were very different one year ago and may yet be even more different one/two years in the future, so that's an unknown.

If you think house prices will rise even moderately, then any interest-rate savings from waiting for a year or two will probably be more than wiped out by house price rises, if that makes sense. Otoh, if you think house prices will stay the same or go down, then waiting until you are eligible for a better rate may end up saving you money.

Sorry I couldn't really give you a clear cut answer, there are far too many unknowns. My advice would be to explore your options once you have a deposit and are ready to buy. You can then make a decision on whether to wait or not.

K_S

JW2709 said:

K_S said:

JW2709 said:

Hi- FTB here...employed (not self employed)

Apologise in advance for what might seem like a stupid question.  Do mortgage lenders look at gross pay or net pay on payslips?

Reason I ask is that the company I work for is moving to a salary sacrifice scheme for our company cars which means that they will be paying me a car allowance and then deducting the total cost pre-tax (which will be more than the allowance they are providing, which I am fine with).  I'm worried that the car payments will impact how much I can borrow.  

Any thoughts/advice?

@jw2709 Generally speaking, for PAYE applicants, lenders will start with the gross pay and apply deductions based on their I individual policies/processes.

Exactly what impact (if any) your salary sacrifice deductions will have on your borrowing capacity depends on the specific lender, the details, what it looks like on your payslip, etc.

Based on the limited info into your post, if I've understood it correctly, the gross pay considered by most lenders is likely to be your basic + car allowance - car deduction. But again, it may differ across lenders depending on how it's worded and where it shows on the payslips.

thanks for the advice @K_S

Before I commit to taking the car I wanted to know the impact as I need to make a decision in the coming weeks but will not be applying for the mortgage for at least 6 months.

Currently my payslips is shown in the following way

Salary                    4269
Flex holiday sell     82
P-sip shares         -81
Smart Pensions   -213

Total Earnings       4057

Then leads on to my NI and Tax deductions.  Im not clear on how the additional car allowance of £6500 per year will be shown and how the car salary sacrifice of £1128 will be shown in terms of text etc but I'm confident in saying that both mentioned will be listed under salary before tax and NI.

I'd like to understand if the likely hood is that my mortgage application will be based on the 4269(salary) or total earnings number (post salary sacrifice).  I'm checking affordability calculators but obviously the difference in which number to use will impact the borrowing amount.  

@jw2709 I want to stress at the outset that without knowing what exactly the payslip looks like, please only treat whatever I'm saying below as merely an educated guess.

On the gross side, if your payslip shows -
Basic:                                       4,269
Car allowance:                         541.67
Salary sacrifice car scheme:   -1,128 

I can see some lenders taking (4269+541.67)x12 as gross income and the 1128 as a monthly commitment/outgoing.

I can also see other lenders taking (4269+541-1128)x12 as gross income which probably works out better from a lender affordability point of view

Based on the limited info in your post and going by my assumed payslip above, I personally can't see most lenders being ok with ignoring the salary sacrifice completely but again that is simply an educated guess based on assumptions and the limited info in your post.

Diver22

Hi. I may be in the position shortly of not being able to progress with a house purchase due to the vendor not properly instructing her solicitors and providing all required documentation for them despite repeated requests by them and by my solicitor chasing too. In other words a de facto withdrawal by the vendor even though they have not actually said anything. This has been going on for two and a half months now and proving incredibly frustrating and stressful. My offer is with Leeds Building Society. Do you know Leeds policy on transferring my mortgage offer to a different property or will I have to start from scratch again? 

KAP0365

Probably been asked before but interested in MB's views...

Currently on a 1.6% fixed rate with £342k left and 24 years left to run. Assume by 2025 interest rates will still be higher than when we got the mortgage, but have seen lots of people paying extortionate ERCs in order to fix for longer at the current rates of around 3-4%. 

What do you think will happen? Do you think predictions that the BOE rate will be around 2-2.5% by 2025 are accurate? We are prepared for an inevitable rise but parents have been reminding us of their 15% in the 90s...!!!