Mortgage broker - ask me anything

Leew89

Evening folks!

I currently have a mortgage and in approximately 18 months/2 years looking to move to a bigger house (kids!). 

I have £3744 remaining on my student loan, with a monthly payroll deduction of £104.

I also have approx £8800 on an interest free credit card.

I was looking to get my student loan paid off first and pay the minimum on the card, and then once paid off move onto paying as much of the card balance as possible.

What would be looked on more favourably by a lender, having the student loan paid off in full and gone, but perhaps having a card balance of 5k rather than 2k, or the student loan still being there but with more credit card debt paid off?

Hope that makes sense!

K_S

@leew89 As far as a mortgage is concerned -

- the impact of the student loan is the £104 as a committed monthly outgoing. The o/s amount being 10k or 50k doesn't really matter.

- the impact of an 8k cc debt (doesn't matter if it's at 0% or 25%) is firstly as a committed monthly outgoing of around 3-5% (depending on the lender) of the o/s amount, so around £240-400. Usually, the size of the cc debt matters only when it's quite sizeable in proportion to your income. 8k cc debt with a 50k income would not be sizeable. But if you had 20-25k+ of cc debt with 40-50k income, then that might have an impact beyond just the affordability bit.

Whether an outgoing of £104 and £240-400 will make a difference to your borrowing options will depend on the specific numbers involved, how much you need to borrow, etc.

To get a very rough idea, you could play around with a couple of lender affordability calculators to see what impact it may have.
https://online.accordmortgages.com/public/mortgages/quick_enquiry.do
https://portal.intermediaries.hsbc.co.uk/affordabilitycalculator/affordabilitycalculatorpage.php

Leew89 said:

Evening folks!

I currently have a mortgage and in approximately 18 months/2 years looking to move to a bigger house (kids!). 

I have £3744 remaining on my student loan, with a monthly payroll deduction of £104.

I also have approx £8800 on an interest free credit card.

I was looking to get my student loan paid off first and pay the minimum on the card, and then once paid off move onto paying as much of the card balance as possible.

What would be looked on more favourably by a lender, having the student loan paid off in full and gone, but perhaps having a card balance of 5k rather than 2k, or the student loan still being there but with more credit card debt paid off?

Hope that makes sense!

happydaisy11

Hi, I saw you say you deal with a lot of shared ownerships. I've just sold my home and it's due to complete around mid-Feb. I then will be staying with my mum until the shared ownership properties I am looking at become available. I've already gone through an affordibility check, registered with Help to Buy and received my AIP.

However, I'm really worried a move so soon to applying will affect my full mortgage application. I'll update driving license, bank statements and electoral roll address ASAP, but you have to be so quick with shared ownership what if electoral roll address hasn't updated when I submit my application. Is there anything I can do?

Also, as I won't be paying the utility bills at my mum's would a mobile phone bill be enough?

Thank you in advance for any advice.

nabznab1

Just needed some advice on my upcoming mortgage renewal. 

I’m currently on a 3.24% fix that is ending end of April. I’ve had a look at the options and wondering what the consensus is on tracker mortgages. I’m currently paying around £635. 

The next cheapest 2 year fix is from Nationwide at 4.99% where payments would hike to £803/month. 

Coventry is currently offering 3.88% + 0.38% tracker for 2 years. There are no ERC. Payments on this would start at £680/month. 

It also worth noting that I do plan to move home in less than 5 years. 

Any thoughts? 

K_S

nabznab1 said:

Just needed some advice on my upcoming mortgage renewal. 

I’m currently on a 3.24% fix that is ending end of April. I’ve had a look at the options and wondering what the consensus is on tracker mortgages. I’m currently paying around £635. 

The next cheapest 2 year fix is from Nationwide at 4.99% where payments would hike to £803/month. 

Coventry is currently offering 3.88% + 0.38% tracker for 2 years. There are no ERC. Payments on this would start at £680/month. 

It also worth noting that I do plan to move home in less than 5 years. 

Any thoughts? 

@nabznab1 Whether or not you should go for a variable rate will depend on your personal circumstances, when you expect to move, preferences and need for certainty.

A 2yr tracker might well be the best option for you, some alternativesbto consider are as follows -

If you would be fine with access to just one lender and would like the certainty of a long fix, you could potentially take out a 5 year portable fix with a stepped ERC and then rely on porting when it comes to moving.

Alternatively you could take a variable product with a compatible ERC structure (eg: 5 year discount with no ERC after 3 years), etc.

Unless you expect mortgage rates to jump significantly in the near future, I personally don't see the point of a 2yr fix over a 2yr variable. With a 2yr fix you don't get the potential savings of a variable during the 2 years and will still be exposed to whatever rates are available at the end of 2 years.

FYI some 2yr Coventry tracker rates are going up (at least for intermediaries, no idea about direct) from Friday.

debbiejmiller

Hi - I am wanting to find out the tipping point of my repayment mortgage, but it's fixed and I will remortgage at the end of the fixed rate, so does that mean there isn't a tipping point for the length of the fix please?
I've seen there's a tipping point if I continued with the higher rate (SVR) after the fixed period ends, but will I never achieve the tipping point on the fixed part itself?
Thanks

Moneysimples

Hi, ive just posted in the buying a home section also;

Im trying to get my joint mortgage into my sole name - all was accepted and going through, however Help to Buy have refused to complete at the last hurdle - as I had put the solicitors fees and early repayment charge onto the amount I was borrowing within my mortgage (£3k)

This is due to a court order so it should have been expedited, but for one reason or anothers failings - this process has taken 6 months and now my mortage offer is expiring...and I will not be able to afford the new hugely increased rates...thus I will loose my/my childrens home if this offer cannot complete by next week!

I am hoping Help to buy are treating me as a vunerable customer as they stated they had a duty of care(?) and that they will look to see if they could overturn their decision...

But if they dont...I dont know what else I can do, as my new lender has refused to extend at the current offer.

Is there anything else I/my broker etc could try?

Obviously due to the fact this has been ongoing for 6 months I dont feel confident in the people dealing with this at the moment.

silvercar

Moneysimples said:

Hi, ive just posted in the buying a home section also;

Im trying to get my joint mortgage into my sole name - all was accepted and going through, however Help to Buy have refused to complete at the last hurdle - as I had put the solicitors fees and early repayment charge onto the amount I was borrowing within my mortgage (£3k)

This is due to a court order so it should have been expedited, but for one reason or anothers failings - this process has taken 6 months and now my mortage offer is expiring...and I will not be able to afford the new hugely increased rates...thus I will loose my/my childrens home if this offer cannot complete by next week!

I am hoping Help to buy are treating me as a vunerable customer as they stated they had a duty of care(?) and that they will look to see if they could overturn their decision...

But if they dont...I dont know what else I can do, as my new lender has refused to extend at the current offer.

Is there anything else I/my broker etc could try?

Obviously due to the fact this has been ongoing for 6 months I dont feel confident in the people dealing with this at the moment.

Help to Buy is a second charge on the property, after the mortgage lender. If the worst happened and you were repossessed, the proceeds of sale first go to the first charge holder. So by adding to the mortgage, this potentially takes the extra money away from HTB if there wasn't enough money to go round. For this reason it is their ruling that you can't increase the mortgage. If they won't allow an exception, then its a question of funding the fees and charges elsewhere. It may be that your ex joint mortgage holder would be prepared to help out as they get released from the mortgage in return.

If you can't get a mortgage that is affordable, you won't be able to remortgage and the ex joint mortgage holder will have to wait until you can. They would need to go to court to force a sale.

Moneysimples

silvercar said:

Moneysimples said:

Hi, ive just posted in the buying a home section also;

Im trying to get my joint mortgage into my sole name - all was accepted and going through, however Help to Buy have refused to complete at the last hurdle - as I had put the solicitors fees and early repayment charge onto the amount I was borrowing within my mortgage (£3k)

This is due to a court order so it should have been expedited, but for one reason or anothers failings - this process has taken 6 months and now my mortage offer is expiring...and I will not be able to afford the new hugely increased rates...thus I will loose my/my childrens home if this offer cannot complete by next week!

I am hoping Help to buy are treating me as a vunerable customer as they stated they had a duty of care(?) and that they will look to see if they could overturn their decision...

But if they dont...I dont know what else I can do, as my new lender has refused to extend at the current offer.

Is there anything else I/my broker etc could try?

Obviously due to the fact this has been ongoing for 6 months I dont feel confident in the people dealing with this at the moment.

Help to Buy is a second charge on the property, after the mortgage lender. If the worst happened and you were repossessed, the proceeds of sale first go to the first charge holder. So by adding to the mortgage, this potentially takes the extra money away from HTB if there wasn't enough money to go round. For this reason it is their ruling that you can't increase the mortgage. If they won't allow an exception, then its a question of funding the fees and charges elsewhere. It may be that your ex joint mortgage holder would be prepared to help out as they get released from the mortgage in return.

If you can't get a mortgage that is affordable, you won't be able to remortgage and the ex joint mortgage holder will have to wait until you can. They would need to go to court to force a sale.

The exception was what I was hoping for, they have put it to the Deeds team to review now, but the team leader stated that Homes England will refuse any extra borrowing of over £2k. Thats fair enough had we had known that - Id have paid the solicitors fees etc by other means but now its too late.

Now it means I cannot afford the new increased rates.

Im seemingly unclear if they do make exceptions and im shocked as to how much the rates have increased since last July

(My ex wont help out, he wouldnt even wait a few more months to avoid me paying the £2k early repayment fee.

I guess I could declare all this if he takes me to court to enforce and Id hope they consider the cost of living crisis, the increase in rates etc, but I was always afraid that they dont care about standard of living and will simply force a sale to buy anywhere for me and the kids.)

Moneysimples

Sorry ps: The new lender cant reduce the mortgage borrowing amount and keep the original deal, so if any changes are made - so does the rates like applying all over again basically - there is literally no way around this?