Mortgage broker - ask me anything

K_S

perdusys said:

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.

@perdusys Lenders have different policies on self-contained annexes - some are ok with it subject to certain conditions, some will not lend. There's no one blanket approach. So it may be worth making sure that the lender is ok with self-contained annexes in principle.

atlasmm

Do TSB ask for bank statements as part of minimum packaging requirements for a 95 LTV FTB mortgage?

Meg7711

Thank you . I have been employed there for 4 years. The underwriter requested more documents like statements, asked a few questions  on 27 April . I replied and send the documents to my broker on the same day . Today I asked MB if they have had any other questions as no update since then. He replied that they had one silly question but no details was  provided to me. I am very stressed with the whole  situation . The app was sent on 22 April…Last week I have heard that the process was almost finished and they should give us update within 2 day but still waiting and know nothing (not able yo track as MB refused to provide me with a ref number )

Southend_2

Hi, we are early in the process of arranging a mortgage through Habito brokers. We have chosen to go with Santander.  Does anyone know if we are able to arrange a homebuyer survey via Santander or if we will need to organise that separately via a RICS surveyor? When i bought my current home I was able to book the survey via the mortgage provider (Cheltenham and Gloucester), but not sure if Santander offer this service. Thanks.

K_S

Meg7711 said:

Thank you . I have been employed there for 4 years. The underwriter requested more documents like statements, asked a few questions  on 27 April . I replied and send the documents to my broker on the same day . Today I asked MB if they have had any other questions as no update since then. He replied that they had one silly question but no details was  provided to me. I am very stressed with the whole  situation . The app was sent on 22 April…Last week I have heard that the process was almost finished and they should give us update within 2 day but still waiting and know nothing (not able yo track as MB refused to provide me with a ref number )

@meg7711 Easier said than done I know but I wouldn't stress too much. Ltd co underwriting can often take a bit of time, plus you have the added complication of the second applicant being employed in the same family business (I'm assuming that you don't hold a significant share in the ltd co.) so the lender will probably have a few queries which the broker should be able to answer.

As long as your broker did the groundwork before recommending NatWest and the numbers all add up, it should be fine in the end.

NatWest tracking can often be very misleading, especially for any applications that fall outside the standard PAYE income applicant. But it's a bit naughty of your broker to refuse to give you the reference number, there's no reason for that. I would ask again and say that you understand that it might not be accurate but that you'll like to have access to it anyways.

Good luck, I hope you get an offer soon!

Meg7711

K_S said:

Meg7711 said:

Thank you . I have been employed there for 4 years. The underwriter requested more documents like statements, asked a few questions  on 27 April . I replied and send the documents to my broker on the same day . Today I asked MB if they have had any other questions as no update since then. He replied that they had one silly question but no details was  provided to me. I am very stressed with the whole  situation . The app was sent on 22 April…Last week I have heard that the process was almost finished and they should give us update within 2 day but still waiting and know nothing (not able yo track as MB refused to provide me with a ref number )

@meg7711 Easier said than done I know but I wouldn't stress too much. Ltd co underwriting can often take a bit of time, plus you have the added complication of the second applicant being employed in the same family business (I'm assuming that you don't hold a significant share in the ltd co.) so the lender will probably have a few queries which the broker should be able to answer.

As long as your broker did the groundwork before recommending NatWest and the numbers all add up, it should be fine in the end.

NatWest tracking can often be very misleading, especially for any applications that fall outside the standard PAYE income applicant. But it's a bit naughty of your broker to refuse to give you the reference number, there's no reason for that. I would ask again and say that you understand that it might not be accurate but that you'll like to have access to it anyways.

Good luck, I hope you get an offer soon!

Thank you so much!

zainyk

Hello

i am trying to get a mortgage currently and my broker is very down on the prospect because of the following. 

My income comes from employment via one family company and income from another family company by dividend. I own 1/6 of the first company and 3/4 or the second. 

He is fine with my dividend income however there is a discrepancy with my payslips for the other company from which I draw a salary as PAYE. The discrepancy is because the accountants changed my pay due to some additional employees. I never read the payslips and didn’t realise do I have been receiving less in pay than the payslips say. Because it’s a family company  I didn’t check and didn’t change the standing order to reflect the change . 

The accounts etc are in order and prepared my a large accountancy firm. 

Is there no way that this error could be corrected in a way that a lender would accept. 

The company can pay a balancing payment etc. I have paid tax on the amount on the payslip. I understand this triggers fraud protocols? But it’s an error. 

I understand this is my fault but I could use any advice. My brokers suggestion is to not apply wait until I have a track of matching payslips etc. this would be fairly devastating for our plans so I’m trying to see if there is any way out. 

Thank you

K_S

@zainyk Unfortunately I can't really comment usefully as the devil lies in the details in these kind of cases.

What I would suggest is - if your current broker is a volume one, I would recommend getting a second opinion from an experienced broker (you could ask family, friends or colleagues for recommendations) who knows how to work with self-employed income as effectively your income is from two companies that you hold shares in - one 17% and the other 75%.

In the above scenario, I'm sure you understand that the lender needs to reassure themselves that the salary that you are being paid by company 1 is sustainable and not contrived to boost borrowing. 

There are few workarounds that may be possible in cases like these -
- finding a lender who is happy to accept some kind of confirmation from the accountant for the discrepancy in the supporting documentation.
- treating you as self-employed for both incomes which makes it easier for the lender to gauge whether the company is profitable, and the salary is genuine and sustainable 
- use your SA302s/SA100 to corroborate the salaried income

Just to be very clear, the above is a very very general comment. Any decent experienced broker who knows all your details would have already thought of the above tbh.

I hope it works out, good luck!

zainyk said:

Hello

i am trying to get a mortgage currently and my broker is very down on the prospect because of the following. 

My income comes from employment via one family company and income from another family company by dividend. I own 1/6 of the first company and 3/4 or the second. 

He is fine with my dividend income however there is a discrepancy with my payslips for the other company from which I draw a salary as PAYE. The discrepancy is because the accountants changed my pay due to some additional employees. I never read the payslips and didn’t realise do I have been receiving less in pay than the payslips say. Because it’s a family company  I didn’t check and didn’t change the standing order to reflect the change . 

The accounts etc are in order and prepared my a large accountancy firm. 

Is there no way that this error could be corrected in a way that a lender would accept. 

The company can pay a balancing payment etc. I have paid tax on the amount on the payslip. I understand this triggers fraud protocols? But it’s an error. 

I understand this is my fault but I could use any advice. My brokers suggestion is to not apply wait until I have a track of matching payslips etc. this would be fairly devastating for our plans so I’m trying to see if there is any way out. 

Thank you

tj200

Hi,

I am currently at the stage where I'm ready to get a mortgage (first time buyer). I was looking through the different products and saw that most products allowed 10% penalty free overpayments on the outstanding mortgage balance a year. 

My question here is, isn't this 10% overpayment a bit of a cheat code if used correctly? For me, I wanted to get a 25 year mortgage but after finding out about the overpayment I'm thinking of getting a 35 year term instead. My logic behind this is having a 35 year term would increase my chances of being accepted from an affordable standpoint, and I could overpay the mortgage on the a monthly basis to pay the difference between a 25 year term and the 35 year term. As long as I pay the difference on or before the date the standard mortgage repayment is paid and the lender uses the overpayment as a capital reduction I won't incur any more interest then if I was on a 25 year term. 

I am pretty sure I will be accepted for a 25 year mortgage as I'm lending circa £20k below what I could lend and my monthly outgoings are low. I get it might seem pointless to take out a longer mortgage term if I'm going to overpay the difference anyway, but I don't see the point in committing to a higher monthly liability when the option is there for me to take a lower liability.

Is my logic sound or are there some downsides to doing this that I'm not recognising?

Regards
Tom

K_S

@tj200 Yes your logic is absolutely sound. Overpaying has the same impact as shortening the term with the massive advantage of retaining additional flexibility around your finances as you correctly point out.

Martin's article below discusses the same topic.
https://blog.moneysavingexpert.com/2014/10/dont-shorten-your-mortgage-term-if-you-can-overpay/

tj200 said:

Hi,

I am currently at the stage where I'm ready to get a mortgage (first time buyer). I was looking through the different products and saw that most products allowed 10% penalty free overpayments on the outstanding mortgage balance a year. 

My question here is, isn't this 10% overpayment a bit of a cheat code if used correctly? For me, I wanted to get a 25 year mortgage but after finding out about the overpayment I'm thinking of getting a 35 year term instead. My logic behind this is having a 35 year term would increase my chances of being accepted from an affordable standpoint, and I could overpay the mortgage on the a monthly basis to pay the difference between a 25 year term and the 35 year term. As long as I pay the difference on or before the date the standard mortgage repayment is paid and the lender uses the overpayment as a capital reduction I won't incur any more interest then if I was on a 25 year term. 

I am pretty sure I will be accepted for a 25 year mortgage as I'm lending circa £20k below what I could lend and my monthly outgoings are low. I get it might seem pointless to take out a longer mortgage term if I'm going to overpay the difference anyway, but I don't see the point in committing to a higher monthly liability when the option is there for me to take a lower liability.

Is my logic sound or are there some downsides to doing this that I'm not recognising?

Regards
Tom