Mortgage broker - ask me anything

happy2017

Hi,

I started a DMP with StepChange in May 2019 and since a few months back have started to self manage my own debt.

I have a bank account that my salary goes in and I use them for bills and every day spending.

I transfer enough money each month to another account where all the payments go to my creditors I’ve defaulted with and have arrangements in place.

Im hoping that by the end of the 2025 all the defaults will have gone from my credit file.

I really want to own a home in 2026 but wondered if paying small amounts each month to my creditors will be frowned upon by mortgage lenders.

Should I look over the next year or so to put in 30% offers to my creditors or which I owe £38k across 15 lenders?

Is it best all the debt is gone even though it’s not on my credit file before applying g for a mortgage?

 Thanks.

cdi10

Hey guys, Long story short, we’re in a quirky mortgage situation. We’re looking for 90% LTV.

• My partner is starting a new job next week on a temporary contract. This will be a 12 month role in the civil service, but will be the first contract role she’s taken, as her previous history is the years of perm roles.
• I myself am in a permanent role and earn more however have a small default on my account from 2020.

With the current situation the broker we have contacted seems to think her income won’t be counted anywhere, and has suggested making the application using only my income as its higher/permanent role. This would be 5x my salary, seems impossible to get I would think?

Should we search for another broker and see if they can advise us better? Anyone been in a similar situation and has successfully managed to get a mortgage?

K_S

cdi10 said:

Hey guys, Long story short, we’re in a quirky mortgage situation. We’re looking for 90% LTV.

• My partner is starting a new job next week on a temporary contract. This will be a 12 month role in the civil service, but will be the first contract role she’s taken, as her previous history is the years of perm roles.
• I myself am in a permanent role and earn more however have a small default on my account from 2020.

With the current situation the broker we have contacted seems to think her income won’t be counted anywhere, and has suggested making the application using only my income as its higher/permanent role. This would be 5x my salary, seems impossible to get I would think?

Should we search for another broker and see if they can advise us better? Anyone been in a similar situation and has successfully managed to get a mortgages

@cdi10

Generally speaking, can someone in your situation get a mainstream mortgage - yes

Can you get a mortgage - depends on the specifics. The two main points are your 2020 default and your partner's contract.

What impact your default has will show up in the lender "credit-scoring" at DIP/AIP (agreement in principle) stage, it'll either pass, or fail or will cap LTV (eg: it'll say that you can go no higher than 85% LTV) and will vary across lenders.

What impact your partner's contract will have will depend on the details - has she been in the same line of work prior to this contract, is it an FTC, is it a day-rate contract, is it direct PAYE, or is it umbrella or ltd.co. etc. etc. There are lenders who will consider day 1 contracts subject to criteria and others that are able to apply some common sense to a situation.

You've definitely done the right thing by using a broker, I hope you're able to get the mortgage you need, good luck!

perdusys

How does an Agreement in Principle affect credit and future mortgage applications?
If I approach 2 mortgage brokers, will this have a detrimental effect?  Have spoken briefly to two brokers and been given different scenarios regarding credit card debts and projected mortgage amounts.  I'd quite like to ask both to do agreements in principle, but the likelihood is that we may need to take longer than the 90 days the agreement will last, as this depends on someone else selling a property in order for us to buy jointly. Will extending an agreement have a detrimental effect on future mortgage applications if we should need to apply again?

K_S

perdusys said:

How does an Agreement in Principle affect credit and future mortgage applications?
If I approach 2 mortgage brokers, will this have a detrimental effect?  Have spoken briefly to two brokers and been given different scenarios regarding credit card debts and projected mortgage amounts.  I'd quite like to ask both to do agreements in principle, but the likelihood is that we may need to take longer than the 90 days the agreement will last, as this depends on someone else selling a property in order for us to buy jointly. Will extending an agreement have a detrimental effect on future mortgage applications if we should need to apply again?

@perdusys           

As long as the AIP/DIP is a soft-check, it does not have any adverse impact on your credit history. A few mainstream lenders (eg: Barclays, Virgin, Coventry, etc.) broker DIPs are hard-checks, so it might be better to avoid too many of those.

As long as the information input in consistent across different lender DIPs, multiple soft-check DIPs *should not* have a detrimental impact. 

If you're looking for a fairly accurate max borrowing figure, you need a broker who has verified the numbers and not just gone on what you've said, if that makes sense. If it's just a ballpark that you want, then it's fine to just go by the fact-find.

perdusys

K_S said:

perdusys said:

How does an Agreement in Principle affect credit and future mortgage applications?
If I approach 2 mortgage brokers, will this have a detrimental effect?  Have spoken briefly to two brokers and been given different scenarios regarding credit card debts and projected mortgage amounts.  I'd quite like to ask both to do agreements in principle, but the likelihood is that we may need to take longer than the 90 days the agreement will last, as this depends on someone else selling a property in order for us to buy jointly. Will extending an agreement have a detrimental effect on future mortgage applications if we should need to apply again?

@perdusys           

As long as the AIP/DIP is a soft-check, it does not have any adverse impact on your credit history. A few mainstream lenders (eg: Barclays, Virgin, Coventry, etc.) broker DIPs are hard-checks, so it might be better to avoid too many of those.

As long as the information input in consistent across different lender DIPs, multiple soft-check DIPs *should not* have a detrimental impact. 

If you're looking for a fairly accurate max borrowing figure, you need a broker who has verified the numbers and not just gone on what you've said, if that makes sense. If it's just a ballpark that you want, then it's fine to just go by the fact-find.

K_S thanks for the speedy response
So, if we ask for AIP/DIP from the two brokers we have already asked (who have given figures based solely on payslips and credit files), to make sure it is only a soft search it would give us more of an idea if the figures are actually likely?  I'm a bit concerned because a family member who had an initial amount given was then drastically reduced on the fact find with bank statements etc. This had to do with pension payments and phone contracts etc rather than straight credit cards or loans. Because we intend to buy with parents who are selling a property to provide a deposit and pay off some of our credit, we need to have a realistic figure to work out if we would have enough mortgage available to buy a property big enough.  LTV isn't so much of a problem as they are hoping to have enough equity to put down a healthy deposit?

LouisaAlmighty

Morning,
Back in 2016 I bought a house with my ex partner. In 2018 we broke up and sold the house, since then I have rented. 

I am now looking at buying a home with my new partner. He lives with parents and always has so is 100% a first time buyer but I'm not sure what I am? 

I know I'm not a first time buyer but when I've looked to get AIPs from mainstream banks I can only see a couple of options; FTB, Remortgage, buy another property. 

I'm none of them, does this rule me out of main stream lenders? 

So confused! Thank you 

K_S

LouisaAlmighty said:

Morning,
Back in 2016 I bought a house with my ex partner. In 2018 we broke up and sold the house, since then I have rented. 

I am now looking at buying a home with my new partner. He lives with parents and always has so is 100% a first time buyer but I'm not sure what I am? 

I know I'm not a first time buyer but when I've looked to get AIPs from mainstream banks I can only see a couple of options; FTB, Remortgage, buy another property. 

I'm none of them, does this rule me out of main stream lenders? 

So confused! Thank you 

@LouisaAlmighty

With respect to mortgages, lenders define FTBs in different ways (eg: lender 1 might define an FTB as someone who hasn't had a mortgage in the past 3 years while lender 2 might define an FTB as someone who's never owned a home) so you'd have to check with the particular lender.

When I do AIP/DIPs for clients, in most I can pick the FTB status individually for the applicants so it could be FTB for one and non FTB for the other 

But as far as a mortgage is considered, there isn't any huge advantage/disadvantage to qualifying as an FTB so it's nothing to stress about too much.

With respect to government incentives (eg: stamp duty), you are not an FTB but that's unrelated to your mortgage lender if that makes sense.

TechM89

Hi, my parents have got a DIP from Platform but have been waiting on a decision on the final offer for around 6 weeks now. Everything else and other people in the chain are ready to go, but seems to be getting nowhere fast with this company.
My dad is classed as retired but does self employed work and they are only needing a £60k mortgage.
Do you know any other mortgage companies they can try and give mortgages to retired/self employed people? They have a broker, but not getting much response from them unfortunately.

K_S

@techm89 Platform are slow and clunky at the best of times, underwriting can be nitpicky, their packaging requirements are clear as mud. 

Unfortunately not much the broker can do about most of the above besides setting expectations with the client before getting their go ahead.

But on the positive side, as long as it was placed correctly, you should get an offer eventually. I've never had a Platform non-valuation related decline as far as I can recall.

If time was of the essence then if you'd mentioned that to the broker they would have probably recommended steering clear of Platform and going for the next cheapest compatible lender. Plenty of lenders will lend to SE and/or retired applicants as long as income can be evidenced as per their requirements.

Good luck, hope your offer comes through soon!

TechM89 said:

Hi, my parents have got a DIP from Platform but have been waiting on a decision on the final offer for around 6 weeks now. Everything else and other people in the chain are ready to go, but seems to be getting nowhere fast with this company.
My dad is classed as retired but does self employed work and they are only needing a £60k mortgage.
Do you know any other mortgage companies they can try and give mortgages to retired/self employed people? They have a broker, but not getting much response from them unfortunately.