Mortgage broker - ask me anything

BritishGent

K_S said:

BritishGent said:

K_S said:

BritishGent said:

Hi,

Looking for some advice/maybe reassurance from a Mortgage adviser on our situation ahead of a Mortgage Adviser meeting with Natwest next Wednesday.

December 2021 my wife and I bought a £275k property with a 10% deposit on combined salaries of ~£73k, monthly repayments of £1220 per month.

16mths later, we're now earning combined £93k (Take home roughly 4.5k per month) and because of a job opportunity we're now moving again, and the house is now being sold for ~£330k and we've had an offer accepted on a house for £235k. We're porting the mortgage but we need to go through the mortgage reapplication process with Natwest again.

The bit that is causing me a bit of anxiety is Credit Card debt- I've used credit cards to pay for furniture for the house on a 0% Balance Transfer card, it's currently £5.9k overall, split between £3.5k on one card, £1.7k on another (19.5% overall credit usage) and each month I'm getting paid into my current account, transferring out important funds (Mortgage, Bills, Groceries, etc) to a joint account, then using the remaining money (~£800) to pay down that amount. 

Is this going to be an issue? I've got it in my head that this credit card debt is going to ruin our mortgage application and spiralling slightly. 

Appreciate any advice with this.

Is 235k the new house price or the total borrowing required (original mortgage + additional borrowing) or size of additional-borrowing required?

If 235k is the house price or the total borrowing required - based on the numbers you've shared I don't see the cc debt making any difference one way or the other.

If 235k is the additional-borrowing required - then it may have an impact

This might be a good question to ask now as well and I realise you may not be able to give a definitive answer. In the Natwest Digidocs it just asks for bank statements, would you say to include the credit card statements in that? I've seen some advice yes and others say it's not needed. Since January my current account is just used for paying in my wage then forwarding onto joint account/sending it to pay off furniture

@britishgent My recommendation would be to keep it simple, just give what they've asked for  

If the underwriter needs to see any additional documentation they'll ask for it and you can provide it then.

I will say here that I've never had a mainstream lender ask to see a client's cc statements. It is fairly common for the lender to come back and ask for the bank statements for the account from which the main direct debits, etc. go out if those aren't visible on the salary account so if you wish you could provide that upfront.

Thanks so much, you've helped relieve a lot of my concerns with this. I think just coming into this with a lot larger credit card debt than last time has just made me panic slightly, but you've helped that a lot!

Penguin_

Just a quick one, as mentioned earlier I have managed to get rid of CC debt (woo hoo!!), how long will it take for the balances to be updated on average across the various credit reference agencies? 

K_S

jonnyniner said:

I was hoping for some advice on a complex dilemma I currently have when moving home.

We have two properties that we are selling. One belonged to my late mother-in-law and we be inheriting 50% of that property (around 75k after fees etc) and the other is our own house - a similar property of which we will be selling ourselves at a value of around 150k. We have some savings of around 30k-35k which we will be using against a house we have just been accepted on at a value of 320k. We will be taking a mortgage of around 85k to fund the rest of which I have been approved in principle for just over 200k. 

Both of our properties were sold and we finally found the home we wanted and then, the day after we finally got our offer accepted, our mother in laws property sale fell through. We have put it straight back on for sale and it sold very quick the first time, we're hoping to sell quickly again.

The problem is that it leaves us with that shortfall of about 75k until we sell that house. We really don't want to lose the house that we have been accepted on and people have suggested a bridging loan, but would we be able to do that with already looking at a mortgage? 

We're really starting to feel the house we want slipping away so any advice is greatly appreciated. At the moment, it seems we're stuck just hoping we can actually sell the house and overtake the buying process if we can do it quickly, but i'm obviously losing sleep about that.

@jonnyniner There are a few options to 'break the chain' in a scenario like yours. All/some/none of these might be available to you as it depends on your specific circumstances, the numbers, etc. All of these may also have varying stamp duty implications.

1. Get the mortgage for the onward property on the basis that the background property (mother-in-law) will remain unsold. So you'd have to up your mortgage to tack on the 75k and meet any lender affordability/criteria with respect to the background property. This is likely to be the most cost effective option.

2. Get a regulated bridging loan and pay it off when the house sells. This is likely to be the most costly option though also the easiest/quickest to sort out as it's all based on LTVs and not affordability.

3. Get a bridging-loan alternative (short term mortgage offered by some smaller lenders) to cover the time period between completion and sale of the property. The cost of this option is likely to be somewhere between options 1 and 2 above.

K_S

Penguin_ said:

Just a quick one, as mentioned earlier I have managed to get rid of CC debt (woo hoo!!), how long will it take for the balances to be updated on average across the various credit reference agencies? 

@penguin_ Generally speaking, a few weeks to 1-2 months. 

Penguin_

K_S said:

Penguin_ said:

Just a quick one, as mentioned earlier I have managed to get rid of CC debt (woo hoo!!), how long will it take for the balances to be updated on average across the various credit reference agencies? 

@penguin_ Generally speaking, a few weeks to 1-2 months. 

Thanks, we're going to have a look at some AIPs in a few months so should be ok by then

Meg7711

Hi . I wonder if you know the real turnaround time for mortgage app with NatWest ( 1 person self employed (ltd) , 2nd person employed by self employed (person 1). 

Charlotte_Brown

We're in process of buying a flat. Its in a Grade II listed building and has been a flat for years... But because it's been recently updated (new kitchen, carpets, lick of paint) lenders are classing it as a NEW BUILD which means the loan to value ratio is 80% (with Virgin who our current mortgage is with). We've been tgold its not just Virgin that would have this view.
How is it a 'new build' and when did this new rule come into place?
Seems grossly unfair when we could get a flat in the same "block" which doesn't have a new kitchen on a totally different ratio.
Any advice, knowledge, help greatly received! 

perdusys

Hoping for some advice for son and DIL.  They are both working full time, and their intention is to buy a property with my DIL's parents. Son and DIL have debts, loans and credit cards, which the parents intend to pay off in full.  They are intending to sell their property and use this to pay off son & DIL's debts, and put down a healthy deposit on the new property.  They are intending to either put an annexe in the garden, or refit the house to provide a self contained annexe. I understand they will need to have solicitors advice about that they do, but I wondered how the mortgage companies would view their plans.  Combined salaries are around £55K, they have been told some mortgage companies will give them a mortgage on the understanding their debts are paid before the advance is made.  Parents are intending to sell their flat before they buy, and rent until a property can be found.

K_S

Meg7711 said:

Hi . I wonder if you know the real turnaround time for mortgage app with NatWest ( 1 person self employed (ltd) , 2nd person employed by self employed (person 1). 

@meg7711 You can see the average service levels here for NatWest applications currently.
https://www.intermediary.natwest.com/intermediary-solutions/service-levels.html

If your application meets criteria, is fully packaged for ltd.co.dir income and your income situation, valuation happens with no delay and there are no queries raised by the underwriter, you should have an offer within a few days.

If effectively you're employed by your partner (ie a company in which they are a director and majority shareholder) then from the lender's point of view what they want to ensure is that it is sustainable and not something set up in a manner to boost borrowing. 

K_S

Charlotte_Brown said:

We're in process of buying a flat. Its in a Grade II listed building and has been a flat for years... But because it's been recently updated (new kitchen, carpets, lick of paint) lenders are classing it as a NEW BUILD which means the loan to value ratio is 80% (with Virgin who our current mortgage is with). We've been tgold its not just Virgin that would have this view.
How is it a 'new build' and when did this new rule come into place?
Seems grossly unfair when we could get a flat in the same "block" which doesn't have a new kitchen on a totally different ratio.
Any advice, knowledge, help greatly received! 

@charlotte_brown If the property has been occupied as a flat over the past many years until recently, and the only work done recently on it is cosmetic then I wouldn't expect it to be classed as new build and haven't ever seen that happen myself.

Has a full valuation been done by a valuer? Is that what classed it as a new-build?

If you are stuck with Virgin (because you're porting), it might be worth making a formal complaint, perhaps the valuer made an error.

Alternatively if you're aren't limited to Virgin, based on the limited info in your post, it should be fairly easy to find another lender. Even so, before you go down this route it would be useful to know why exactly Virgin classed it as a new-build as there might be something you aren't aware of.