Mortgage broker - ask me anything

Peco141

My x2 year fix mortgage year fixed ends 31st March 2023.  To keep the monthly payment as low as possible and based on the rumours of the Base rate or is it the Standard variable rate... decreasing over the next few months, should I sit tight rather than applying for another fix now?

I'd be willing to pay a little more initially if it meant the monthly fees over a 2 or 3 year fix were lower.

Also are products fees added to then overall mortgage.  I've always gone for a deal with no product fee.  Does it work out cheaper to get a remortgage with or without a product fee?

candycain

Hi, I am applying for a shared ownership, 5% deposit, single occupant earning £40k. 
I am occasionally in my arranged OD and have previous late payments (over a year ago). 
My MB seems confident, but what are my chances of a approval with LBS?

Ellalou

What are average mortgage rates in the Uk now? 

I’m due to remortgage in May so need to start sorting now! 

We currently have £177k outstanding, current term 22 years. At 3.49%, monthly payment £860. 

Our home is worth 290k-£300k.

Are we looking at a much higher monthly payment now? I really don’t think we can be paying much more than we are now with the rising costs of everything else and a young family! 

We may have to consider a longer term (in the short term). We are both 41 & 42 years old. 

Thanks for any advice. L x

G8311374

Mortgage and Property in Scotland

I am a disabled veteran. My income is made up of War and Service Invaliding Pension and welfare benefits.  I am currently in a protected Trust Deed (Scottish equivalent of an IVA) with 2.5 years left to serve and unable to get life insurance so unable to get a mortgage. I currently rent a bungalow through a charity but it does not meet my needs and whilst my landlord is legally obligated to make certain adaptations to the property for my disability, there are other things that need to be done that do not need to be provided legally and my landlord is not willing to provide nor allow me to provide at my own expense. My mum who is 64 and retired would like to purchase a bungalow for me and rent it to me, all above board with a tenancy agreement in place and registering with the local council as a landlord. She has vascular dementia but still has capacity. She receives a full NHS pension and my Dad’s police pension so has a decent income and no debt, owning 50% of her home outright, Dad’s 50% went into Trust when he died. She has a sizeable deposit so would only need a small mortgage which would basically free up enough money left in her savings to make necessary renovations and improvements to the property, rather than purchasing outright and not being able to afford to do all the work required. 

Mum and Dad had the foresight to create a family Trust to protect my financial wellbeing after they died or lost capacity, with everything being left in Trust (Dad’s share of their home is now in this Trust). The property would be owned by the Trust. We would like to know whether subject to passing credit checks, my Mum would be able to get a mortgage given her medical condition, or if the Trust can get a mortgage and how that would work because the Trust is not a person. The rent I pay, would pay for the mortgage with a bit left over to go towards the overall maintenance of the property.

We have looked at shared ownership through local housing associations, but the properties are not suitable and not in the area where I want to live. Also, I would be subject to only being able to get a one bedroom property as I am single and don’t have children. I also approached a veteran’s Housing Trust which would have allowed me to have a property the size I wanted, but I don’t meet their criteria. I have looked into the Scottish Open Market Shared Equity Scheme (OMSE) but there is a limit on the value of the property which they would contribute upto 75% (I think). Unfortunately, there are no bungalows in my area below that value there is quite a significant difference between what they will allow upto and how much a 2-3 bed bungalow starts at, and that’s even considering ones in less desirable areas locally or ones that need to be completely overhauled.

So really we are stuck between a rock and a hard place. If anyone can offer help or advice I would be grateful.

Thankyou.

silvercar

G8311374 said:

Mortgage and Property in Scotland

I am a disabled veteran. My income is made up of War and Service Invaliding Pension and welfare benefits.  I am currently in a protected Trust Deed (Scottish equivalent of an IVA) with 2.5 years left to serve and unable to get life insurance so unable to get a mortgage. I currently rent a bungalow through a charity but it does not meet my needs and whilst my landlord is legally obligated to make certain adaptations to the property for my disability, there are other things that need to be done that do not need to be provided legally and my landlord is not willing to provide nor allow me to provide at my own expense. My mum who is 64 and retired would like to purchase a bungalow for me and rent it to me, all above board with a tenancy agreement in place and registering with the local council as a landlord. She has vascular dementia but still has capacity. She receives a full NHS pension and my Dad’s police pension so has a decent income and no debt, owning 50% of her home outright, Dad’s 50% went into Trust when he died. She has a sizeable deposit so would only need a small mortgage which would basically free up enough money left in her savings to make necessary renovations and improvements to the property, rather than purchasing outright and not being able to afford to do all the work required. 

Mum and Dad had the foresight to create a family Trust to protect my financial wellbeing after they died or lost capacity, with everything being left in Trust (Dad’s share of their home is now in this Trust). The property would be owned by the Trust. We would like to know whether subject to passing credit checks, my Mum would be able to get a mortgage given her medical condition, or if the Trust can get a mortgage and how that would work because the Trust is not a person. The rent I pay, would pay for the mortgage with a bit left over to go towards the overall maintenance of the property.

We have looked at shared ownership through local housing associations, but the properties are not suitable and not in the area where I want to live. Also, I would be subject to only being able to get a one bedroom property as I am single and don’t have children. I also approached a veteran’s Housing Trust which would have allowed me to have a property the size I wanted, but I don’t meet their criteria. I have looked into the Scottish Open Market Shared Equity Scheme (OMSE) but there is a limit on the value of the property which they would contribute upto 75% (I think). Unfortunately, there are no bungalows in my area below that value there is quite a significant difference between what they will allow upto and how much a 2-3 bed bungalow starts at, and that’s even considering ones in less desirable areas locally or ones that need to be completely overhauled.

So really we are stuck between a rock and a hard place. If anyone can offer help or advice I would be grateful.

Thankyou.

You definitely don’t have to have life insurance with a mortgage. My son has bought recently and with no dependents he has decided not to take out life insurance.

Also, I’m not sure why you think shared ownership restricts the number of bedrooms in the property you want to buy, my understanding is that the number of bedrooms can effect housing benefits rent contributions, not buying. While we are talking about benefits, if you rent from your Mum you wouldn’t be eligible for housing benefit as you would be renting off a relative.

I would also look at the impact on your IVA of owning rather than renting, it can cause some problems at the end of the IVA.

G8311374

silvercar said:

G8311374 said:

Mortgage and Property in Scotland

I am a disabled veteran. My income is made up of War and Service Invaliding Pension and welfare benefits.  I am currently in a protected Trust Deed (Scottish equivalent of an IVA) with 2.5 years left to serve and unable to get life insurance so unable to get a mortgage. I currently rent a bungalow through a charity but it does not meet my needs and whilst my landlord is legally obligated to make certain adaptations to the property for my disability, there are other things that need to be done that do not need to be provided legally and my landlord is not willing to provide nor allow me to provide at my own expense. My mum who is 64 and retired would like to purchase a bungalow for me and rent it to me, all above board with a tenancy agreement in place and registering with the local council as a landlord. She has vascular dementia but still has capacity. She receives a full NHS pension and my Dad’s police pension so has a decent income and no debt, owning 50% of her home outright, Dad’s 50% went into Trust when he died. She has a sizeable deposit so would only need a small mortgage which would basically free up enough money left in her savings to make necessary renovations and improvements to the property, rather than purchasing outright and not being able to afford to do all the work required. 

Mum and Dad had the foresight to create a family Trust to protect my financial wellbeing after they died or lost capacity, with everything being left in Trust (Dad’s share of their home is now in this Trust). The property would be owned by the Trust. We would like to know whether subject to passing credit checks, my Mum would be able to get a mortgage given her medical condition, or if the Trust can get a mortgage and how that would work because the Trust is not a person. The rent I pay, would pay for the mortgage with a bit left over to go towards the overall maintenance of the property.

We have looked at shared ownership through local housing associations, but the properties are not suitable and not in the area where I want to live. Also, I would be subject to only being able to get a one bedroom property as I am single and don’t have children. I also approached a veteran’s Housing Trust which would have allowed me to have a property the size I wanted, but I don’t meet their criteria. I have looked into the Scottish Open Market Shared Equity Scheme (OMSE) but there is a limit on the value of the property which they would contribute upto 75% (I think). Unfortunately, there are no bungalows in my area below that value there is quite a significant difference between what they will allow upto and how much a 2-3 bed bungalow starts at, and that’s even considering ones in less desirable areas locally or ones that need to be completely overhauled.

So really we are stuck between a rock and a hard place. If anyone can offer help or advice I would be grateful.

Thankyou.

You definitely don’t have to have life insurance with a mortgage. My son has bought recently and with no dependents he has decided not to take out life insurance.

Also, I’m not sure why you think shared ownership restricts the number of bedrooms in the property you want to buy, my understanding is that the number of bedrooms can effect housing benefits rent contributions, not buying. While we are talking about benefits, if you rent from your Mum you wouldn’t be eligible for housing benefit as you would be renting off a relative.

I would also look at the impact on your IVA of owning rather than renting, it can cause some problems at the end of the IVA.

Thankyou for replying. That is useful to know about the life insurance.  In Scotland, Shared Ownership schemes are operated through housing associations and they will only offer you a property based on occupancy. I have also spoken to the council and as long as there is a tenancy arrangement in place and my mum is a registered landlord I can claim housing benefit. I would not be owning the property, the Family Trust would own the property so it won’t affect my IVA and my IVA won’t affect it at any point. 

joshparker1911

Difficult to tell I know but with a BOE rise expected in Feb. My fix up in April is now the time to pull the trigger on a new deal or do we think fixed rates could drop further between now and then. 

K_S

Ellalou said:

What are average mortgage rates in the Uk now? 

I’m due to remortgage in May so need to start sorting now! 

We currently have £177k outstanding, current term 22 years. At 3.49%, monthly payment £860. 

Our home is worth 290k-£300k.

Are we looking at a much higher monthly payment now? I really don’t think we can be paying much more than we are now with the rising costs of everything else and a young family! 

We may have to consider a longer term (in the short term). We are both 41 & 42 years old. 

Thanks for any advice. L x

@ellalou For a very very rough number, for a mainstream standard 60% LTV resi remortgage, I'd say around 4.5% on a 5 year fix currently, so not too scary compared to what you're currently paying.

For average rates, please see the MSE mortgage best-buy table here. It won't tell you what lenders you are/aren't eligible for but it will give you a sense of the remo rates available in the market as of today.
https://www.moneysavingexpert.com/mortgages/best-buys/

Term - With most lenders, the maximum term will be capped at the lower of your intended retirement age and 70. In those scenarios, assuming a retirement age no less than 70, you're probably looking at a max term of 28 years. If you want to stretch further there are mainstream lenders who will consider up to 75/80 so potentially giving you a max term of up to 38 years assuming that you meet criteria and it is plausible for you to work to that age.

If you play around with the numbers on the MSE mortgage calculator here, you can see what kind of monthly payment you might be looking at different rates and terms. 
https://www.moneysavingexpert.com/mortgages/mortgage-rate-calculator/

K_S

joshparker1911 said:

Difficult to tell I know but with a BOE rise expected in Feb. My fix up in April is now the time to pull the trigger on a new deal or do we think fixed rates could drop further between now and then. 

@joshparker1911 Impossible to say I guess. Unless they come out with a huge surprise and cut significantly more/less than the market expect, I wouldn't expect the Feb BOE rate rise to have any significant impact on mortgage fixed rates.

Personally (this is of course simply an opinion as brokers don't really have any more reliable insight on future mortgage rates than the next person! ) I think that low/mid LTV remo rates might get a bit more competitive on rates in the next couple of months but only by tiny amounts.

For future reference (and for other forumites who come across this post) - there are mainstream lenders whose remo-offers are valid for 6+6 months (eg: Leeds), 6+3 (eg: Platform), 6+1 (eg: NatWest) months, etc. so in theory one could potentially 'secure' a re-mortgage rate up to a year before the fix ends. 

mattyboy7110

K_S said:

mattyboy7110 said:

Hi,
We have an agreed mortgage with HSBC but that property fell through and we are trying to change it to a different property. We've instructed the broker to make the change and they have but they're completely non-responsive at the moment and it's been 6 weeks and no news.
Do you know if HSBC will accept a call from me rather than the broker to chase this up or will they not deal with me at this stage? Would I call the intermediaries number or the number on my mortgage agreement?
Thanks

@mattyboy7110 Hopefully this has been sorted out by now! HSBC have been pretty quick over the last month or two so it definitely shouldn't take them 6 weeks to sort out a change of property post-offer, unless the valuation is taking that long to arrange.

Yep, all sorted now 😀