Mortgage broker - ask me anything

purplelila-2007

K_S said:

purplelila-2007 said:

If a property has been valued at 500,000 by a bank, and we are selling our property for £400,000 at the last minute our buyer requests a discount of say £10,000 and we were were looking to pass this onto our onward purchase how would that work if the valuations had already been done on both properties which have been valued the property at the asking price?

If the buyer wants to buy ours at £390,000 and our onward purchase agrees to £490,000 will our mortgage offer reduce and how would loan to values be affected if the deposit amount remained the same ?

@purplelila-2007 If your vendor agrees to a reduced purchase price of 490k, whether or not it has any impact on your existing mortgage offer will depend on the mortgage size.

K_S loan to value is 60%

K_S

MasterplanC said:

K_S said:

MasterplanC said:

Assume we got a 5-year fixed rate mortgage offer at the end of July [Barclays, valid until January], which stated the rate is fixed until end of August 2027 and it has an early repayment charge during the first 5 years.
If we don't complete and start paying the mortgage before October or November, is it correct to assume it's not really fixed for 5 years, but in fact until August 2027? Would that shorten the period for the early repayment charge as well? I am just wondering whether otherwise one might have to swallow a worse interest rate for a few months before being able to remortgage without the extra charge.

@masterplan The ERC will only be until 31 Aug 2027. To verify this, go to section 8 of your mortgage offer which should be titled 'Early repayment'. The third line should say "Early repayment charges are payable on this mortgage until xxxxx as follows."

Confusingly, section 8 states "The figures assume a start date for the mortgage of 01 August 2022. Early repayment charges are payable on this mortgage until 31 August 2027 as follows." Then they list a table that basically relays the same information and computes how much the ERC would be at most given the total mortgage amount.
So based on this it wasn't so obvious to me whether it would be 5 years from the start of the mortgage or indeed August like the fixed interest period.

@masterplanC The ERC will not extend beyond the fixed period.

K_S

purplelila-2007 said:

K_S said:

purplelila-2007 said:

If a property has been valued at 500,000 by a bank, and we are selling our property for £400,000 at the last minute our buyer requests a discount of say £10,000 and we were were looking to pass this onto our onward purchase how would that work if the valuations had already been done on both properties which have been valued the property at the asking price?

If the buyer wants to buy ours at £390,000 and our onward purchase agrees to £490,000 will our mortgage offer reduce and how would loan to values be affected if the deposit amount remained the same ?

@purplelila-2007 If your vendor agrees to a reduced purchase price of 490k, whether or not it has any impact on your existing mortgage offer will depend on the mortgage size.

K_S loan to value is 60%

@purplelila-2007 This thread should help answer your question

https://forums.moneysavingexpert.com/discussion/comment/79454956#Comment_79454956

K_S

Hayterking said:

What happens if my remortgage offer expires before optima legal set a completion date? Surely it doesn’t just expire and I have to start the entire process again, I mean I’ve paid them?! I only used them because the bank set it up so do you think the bank would just extend the mortgage offer? I mean I’d have thought they want the offer to be processed so why wouldnt they?Appreciate any help, I’m pretty nervy about this. 

@hayterking Whether an offer extension will be considered will depend on the specific lender. For example, Halifax has a complete-by date beyond which they will only extend if you pick a new rate/product. Otoh, NatWest will consider a one-month extension.

K_S

Martisha said:

We have pulled out from the purchase after mortgage application has been submitted but before mortgage offer given.

the lender is Nationwide

what do we need to do now? Cancel it?

@martisha I don't want to comment and unknowingly mislead you due to the lack of context. I don't know how direct apps work but if you're using a broker they should be able to guide you on next steps. Good luck! 

kingstreet

MasterplanC said:

K_S said:

MasterplanC said:

Assume we got a 5-year fixed rate mortgage offer at the end of July [Barclays, valid until January], which stated the rate is fixed until end of August 2027 and it has an early repayment charge during the first 5 years.
If we don't complete and start paying the mortgage before October or November, is it correct to assume it's not really fixed for 5 years, but in fact until August 2027? Would that shorten the period for the early repayment charge as well? I am just wondering whether otherwise one might have to swallow a worse interest rate for a few months before being able to remortgage without the extra charge.

@masterplan The ERC will only be until 31 Aug 2027. To verify this, go to section 8 of your mortgage offer which should be titled 'Early repayment'. The third line should say "Early repayment charges are payable on this mortgage until xxxxx as follows."

Confusingly, section 8 states "The figures assume a start date for the mortgage of 01 August 2022. Early repayment charges are payable on this mortgage until 31 August 2027 as follows." Then they list a table that basically relays the same information and computes how much the ERC would be at most given the total mortgage amount.
So based on this it wasn't so obvious to me whether it would be 5 years from the start of the mortgage or indeed August like the fixed interest period.

The assumption is made merely to illustrate the impact of accrued interest. That is due from the completion date to the end of the month of completion. By assuming 1st, it makes the accrued interest (and hence the first payment) look as big as it could be. You will only start to pay interest on completion. Although it might be termed a two year fix, or a five year fix, most products have an actual end-date so a tranche of mortgages all end at the same time making securitisation easier. That's when lenders sell the rights to the income from a batch of mortgages to an institutional investor.

silvercar

Hayterking said:

What happens if my remortgage offer expires before optima legal set a completion date? Surely it doesn’t just expire and I have to start the entire process again, I mean I’ve paid them?! I only used them because the bank set it up so do you think the bank would just extend the mortgage offer? I mean I’d have thought they want the offer to be processed so why wouldnt they?Appreciate any help, I’m pretty nervy about this. 

If the mortgage offer expires you haven’t got a mortgage offer! You would need to apply for an extension before it expires, which may or may not be granted depending on the policy of the lender. 

Optima legal should be well aware of the completion date and advise you accordingly. 

doglover34

QQ - Natwest have said with my mums application that there was a discrepancy in her credit card balance.  She had paid this off and advised her broker when she applied.  He apparently declared it anyway as it was showing on her credit file as active and with the balance.  She was told last week from Natwest it was passed to offer BUT now Natwest are saying they have noticed a discrepancy on her credit card balance and to wait for the underwriters decision in 2 days. whats the likelihood of this going through?? she told the broker from the beginning this was paid off but hadnt updated on her file, he said he will sort it ... but shes not so sure?? any reassuance?

K_S

doglover34 said:

QQ - Natwest have said with my mums application that there was a discrepancy in her credit card balance.  She had paid this off and advised her broker when she applied.  He apparently declared it anyway as it was showing on her credit file as active and with the balance.  She was told last week from Natwest it was passed to offer BUT now Natwest are saying they have noticed a discrepancy on her credit card balance and to wait for the underwriters decision in 2 days. whats the likelihood of this going through?? she told the broker from the beginning this was paid off but hadnt updated on her file, he said he will sort it ... but shes not so sure?? any reassuance?

@doglover34 I would have done the same as your broker as the lender DIP and systems will automatically pick up whatever is in the credit report at the time, even if its outdated. I'd also mark it as to be paid off in full before completion.

It's not clear to me what the issue is at this point though. The only 'discrepancy' that could potentially cause an issue at this point would be that the current balance on the credit report (as shown on it now) is materially higher than that declared on the application and different enough to cause affordability issues.

The above is just an educated guess based on the very limited info in your post, so it may or may not be accurate. It's your broker who should be answering your questions as they have all the information and can speak to NatWest about the case.

doglover34

K_S said:

doglover34 said:

QQ - Natwest have said with my mums application that there was a discrepancy in her credit card balance.  She had paid this off and advised her broker when she applied.  He apparently declared it anyway as it was showing on her credit file as active and with the balance.  She was told last week from Natwest it was passed to offer BUT now Natwest are saying they have noticed a discrepancy on her credit card balance and to wait for the underwriters decision in 2 days. whats the likelihood of this going through?? she told the broker from the beginning this was paid off but hadnt updated on her file, he said he will sort it ... but shes not so sure?? any reassuance?

@doglover34 I would have done the same as your broker as the lender DIP and systems will automatically pick up whatever is in the credit report at the time, even if its outdated. I'd also mark it as to be paid off in full before completion.

It's not clear to me what the issue is at this point though. The only 'discrepancy' that could potentially cause an issue at this point would be that the current balance on the credit report (as shown on it now) is materially higher than that declared on the application and different enough to cause affordability issues.

The above is just an educated guess based on the very limited info in your post, so it may or may not be accurate. It's your broker who should be answering your questions as they have all the information and can speak to NatWest about the case.

Thank you Broker called back and said that when she applied on 17th august they ran a hard search but the dob was wrong, they ran another on the 23rd August, when it went to offer on 30th the credit card had been removed from the 23rd August so the the balances didnt add up and the computer passed it back to underwriting, he has spoke with the underwriter and he just needs to take this credit card off and resubmit to offer which will happen monday - phew!!.  fingers crossed it all works out - my poor mum