Mortgage broker - ask me anything

tonygsafc

Firstly can I say what a great thread this is, to offer help like this at this time is brilliant.

So here's our story, we are coming to the end of our fixed rate with Platform on a fixed rate mortgage (31/12/2023) and our remaining term is 8 years and we have £55,522 left to pay.

Our currently monthly payments are about 470 quid and we've been overpaying to £700

We'd planned to try and knock a couple of years off the term by re-mortgaging for a shorter term but by the looks of it would be around 826 for 7 years, 935 for 6 years and 1067 for 5 years! I think we will just have to keep our to our 8 year term.

Its so frustrating as I really think if the rates hadn't have shot up we'd be able to knock a chunk of time off, but our problem pales into insignificance at others not as fortunate.

My question is this, I'm planning to just monitor the rates and say check Platform and L&C's rates once a month but when should I just cut my losses and start the switch/re-mortgage process. I don't want to leave it too long and have to pay the 7.37 rate.

Any advice is greatly appreciated

Tony

babypenguin18

Hello! Can you help with the Homebuy Wales government scheme? I am struggling to find lenders that will accommodate the scheme with their mortgages. I can’t find a clear cut list of who will work with this?
Thanks!

katiematey

I understand that early mortgage payments are more heavily weighted towards interest (v. capital) and this reverses towards the end of the mortgage term (say, 25 years). 
I question is, if I'm remortgaging every 3-5 years on average at 4% interest each time (say), even if I reduce the mortgage term each time, aren't I constantly paying significantly over that 4% because I'm resetting that weighting with each remortgage?

K_S

RODNEYKK said:

haras_n0sirrah said:

Thought I would start a thread where people can ask the brokers opinion on things @ACG @LRmortgage @kingstreet @Deleted_User (any other brokers want to chip in - these were the main other brokers who came to mind.
It is definately an interesting market - probably the busiest I have ever been but at the same time lenders are sooo slow. 
Anyone got a question? Ask away

Hello! This is a great thread- I am looking for some help please- I am looking to take the interest only 6 month break with Natwest, however my 2 year fixed term ends in 4 months- at that time will I continue paying the same interest (currently 2 something %) or will it change to the SVR as the fixed term ends even if I am in the interest only period?

I have done lots of googling but cannot find an answer to this one anywhere. The Natwest website offers me the opportunity to choose my deal for the end of the fixed term deal, before taking the interest only option but it does not say what will happen if I don't? Do I change my deal (to more like 6/7%) first or just go ahead now and it will keep me at the lower rate? That seems too good to be true!

@rodneykk This is all very new do there's no general answer to how the 6 month interest only option works with a product-switch lined up to kick in in the next few months. For example, this is the policy from another mainstream lender

NatWest will have its own policy on this (which is the unlikely to be the exact same as above) so you'd be best off speaking to them to understand what you can/can't do.

K_S

tonygsafc said:

Firstly can I say what a great thread this is, to offer help like this at this time is brilliant.

So here's our story, we are coming to the end of our fixed rate with Platform on a fixed rate mortgage (31/12/2023) and our remaining term is 8 years and we have £55,522 left to pay.

Our currently monthly payments are about 470 quid and we've been overpaying to £700

We'd planned to try and knock a couple of years off the term by re-mortgaging for a shorter term but by the looks of it would be around 826 for 7 years, 935 for 6 years and 1067 for 5 years! I think we will just have to keep our to our 8 year term.

Its so frustrating as I really think if the rates hadn't have shot up we'd be able to knock a chunk of time off, but our problem pales into insignificance at others not as fortunate.

My question is this, I'm planning to just monitor the rates and say check Platform and L&C's rates once a month but when should I just cut my losses and start the switch/re-mortgage process. I don't want to leave it too long and have to pay the 7.37 rate.

Any advice is greatly appreciated

Tony

@Tonygsafc I wouldn't worry too much about the term, you can always overpay and achieve the same impact as a shorter term. Alternatively, if the 10% annual overpayment allowance is insufficient for you, you could look at re-mortgaging to a lender that offers 20% (like NatWest) or a lender that bases 10% on the original balance (like Nationwide), giving you more room to overpay without a penalty.
https://blog.moneysavingexpert.com/2014/10/dont-shorten-your-mortgage-term-if-you-can-overpay/

Product switch (staying with Platform) - With respect to when to do a switch, if (like most other lenders), Platform will allow you to change the product if rates go down, then reserve a rate as soon as you can. If rates go up, you sit tight. If rates go down between now and December, you switch to the lower rate.

Re-mortgage (changing lenders) - Perhaps a bit late now, but for next time remember that there are options to reserve a rate well before 6 months from end of the fix. For example, you could have booked a Nationwide rate with a DIP back in May (this reserves the rate for 90 days) and converted it to a full application in July, giving you a mortgage offer valid for 6 months + 15 days from issue, comfortably allowing you to complete on the remortgage after 31/12/2023.

CSI_Yorkshire

katiematey said:

I understand that early mortgage payments are more heavily weighted towards interest (v. capital) and this reverses towards the end of the mortgage term (say, 25 years). 
I question is, if I'm remortgaging every 3-5 years on average at 4% interest each time (say), even if I reduce the mortgage term each time, aren't I constantly paying significantly over that 4% because I'm resetting that weighting with each remortgage?

No.  The weighting of payments isn't worked out like that, even though you are paying more interest at the start it's just because your loan is bigger.

I'll make up some numbers here, which will be wrong, but will show how it works.

Imagine you have a £100k mortgage with a £1000 monthly payment.

Your first monthly payment is £800 of interest and £200 of capital, because you are paying interest on £100k.

Your second monthly payment is a little less than £800 interest (lets say £799) and a little more than £200 capital (lets say £201), because you are paying interest on £99.8k

Next month, it splits £798 and £202, because the interest is on £99.6k.  Then £797 and £203, etc, etc.

There are actual calculators you can find that show you what these numbers are for your own particular loan and rate.

Remortgaging doesn't "reset" anything - you still pay the interest you agree on the remaining balance.  If you remortgaged from the end of one fix onto another new fix with an identical interest rate, then the split of your next payment will be exactly what it always would have been.

Crumbsandcrumbs

Hi all, 

Anyone going through HSBC mortgage application at the moment? Through a broker!

We’re on day 17 with no decision…
My credit file has been pulled 7 times (1 hard search 2 weeks ago) 
I would like to know whether anyone else’s going through this?
It all feels very odd! 

Thank you 

K_S

@crumbsandcrumbs Keeping in mind that no two apps are the same, and a single query (or two) can add a good few days to processing times - service levels are pretty slow at the moment so an app taking 17 calendar days (11-13 working days) isn’t something I’d be too worried about.

Having said that, if you haven’t heard anything at all from your broker in 17 days, do follow up with the broker to understand what’s happening- is the initial app still sitting in a queue, has the val been instructed/completed, were there any queries, do they need anything additional from you, how soon do they expect to have an update for you, etc.

I wouldn’t read anything into any ‘alerts’ from the credit file, they’re often misleading/incorrect. They will register a hard check upon full application.

Crumbsandcrumbs said:

Hi all, 

Anyone going through HSBC mortgage application at the moment? Through a broker!

We’re on day 17 with no decision…
My credit file has been pulled 7 times (1 hard search 2 weeks ago) 
I would like to know whether anyone else’s going through this?
It all feels very odd! 

Thank you 

Crumbsandcrumbs

@K_S
thank you very much 

D4ndo999

Hi

 I am looking for some advice regarding what lenders see as red flags on bank statements when applying for a mortgage.

So we haven't officially started our application yet but will be requiring an 80LTV on a new build property due to complete in December. 

Now my concern with regards to bank statements if required is that we have a joint account that I get my salary Paid into, and then I transfer what's not required for joint bills etc into a Monzo account. Up until 6 weeks ago I have been putting the bulk of that money Into a Monzo pot as it was paying good interest on the balance in there but meant bills and general spending would take me into the overdraft on the account but well within the arranged limited then the following month I would transfer salary back into the account and clear the overdraft and Put the rest into the pot. 


Since mid July I have transferred the balance of the pot back into the current account with Monzo so have around 4/5 weeks of no overdraft and a good rolling balance. 

Have been reading some old posts on the forum etc and it's made me concerned that I am going to give underwriters a bad impression of how I manage my finances. 

Would you be able to advise on where I may stand with this?


Thanks