Mortgage broker - ask me anything

Frp234

Hi. I am due to complete next week, it's been a very long process. I'm self employed and school holidays are always really quiet, so I'm currently £600 in my authorised overdraft. Is this going to ruin everything? Thanks

Peterrr

Hi brokers. Hoping this isn't a rude question! Do brokers charge similar fees, or do such vary by much? We used a broker on our last remortgage and his fee was (IIRC) £450 in 2021. Many thanks

K_S

Peterrr said:

Hi brokers. Hoping this isn't a rude question! Do brokers charge similar fees, or do such vary by much? We used a broker on our last remortgage and his fee was (IIRC) £450 in 2021. Many thanks

@peterrr It varies (most non-adverse brokers will range between 0-£500), but assuming yours' isn't an adverse or otherwise complex case, there are plenty of brokers that don't charge a fee.

Please see the MSE guide here on how to find a broker, including many fee-free ones
https://www.moneysavingexpert.com/mortgages/best-mortgages-cashback/#step3

MissRikkiC

Hi, thanks for what you’re doing here. 

I’ve been reading lots of posts and learning a lot over the last couple of weeks however could you help answer this. 

Looking to buy new house at 370k, increasing borrowing from 150k with Nationwide. 

Idea would be to port the 150k at 1.89% until Feb 25, take a further £150k out at whatever best rate is at current point over longer term (suggesting 35 years) and over pay whilst we are paying less on proportion of mortgage. Happy to do this and disposable income/reduced payments allows. 

Question is around CC debt. At point of new mortgage there will likely be £10k outstanding which would have been factored into affordability already. That said, I’m paying more than the minimum to clear them down and could continue even when full mortgage balance was at higher rate/1.89% ended. 

However wouldn’t the credit card payments be better, being spent overpaying the mortgage given the fact I’ve a limited time before the rate finishes. The credit cards are 0% and will likely be clear before the fixed rate ends anyway but if instead I was to take out the additional £10k (and affordability would allow it), the minimum payments (plus some) could instead be added to the OPs and used to allow for a better deal come the point in which the fix ends because we’d have paid off more. 

The debt hasn’t been added to in a long time. It’s old and I’ve been overpaying CCs and BTing for about 2.5 years so I’m not asking to add to the mortgage due to poor money management or need of discipline.  

Would it come down to if the cost of the minimum payments were more than the additional monthly repayment when adding the 10k or in hindsight for likely an additional £360 (the amount I regularly pay for CCs) per month not actually going to make enough difference. 

K_S

@MissRikkiC Hoping that I haven't missed the point of your post - effectively it just boils down to whether or not the 10k cc debt (to the lender it doesn't matter whether it's at 0% or 30%, it's all the same) has an effect on how much you can borrow Vs how much you need to borrow. And if it does, how big the impact is. This depends on the individual lender's affordability calculations.

You can plug in your numbers and how much you're looking to borrow (in total, existing plus additional) into NW's affordability calculator here, that should give you a rough idea of whether or not the 10k cc debt has any impact on your plans
https://www.nationwide-intermediary.co.uk/calculators/affordability-calculator

MissRikkiC said:

Hi, thanks for what you’re doing here. 

I’ve been reading lots of posts and learning a lot over the last couple of weeks however could you help answer this. 

Looking to buy new house at 370k, increasing borrowing from 150k with Nationwide. 

Idea would be to port the 150k at 1.89% until Feb 25, take a further £150k out at whatever best rate is at current point over longer term (suggesting 35 years) and over pay whilst we are paying less on proportion of mortgage. Happy to do this and disposable income/reduced payments allows. 

Question is around CC debt. At point of new mortgage there will likely be £10k outstanding which would have been factored into affordability already. That said, I’m paying more than the minimum to clear them down and could continue even when full mortgage balance was at higher rate/1.89% ended. 

However wouldn’t the credit card payments be better, being spent overpaying the mortgage given the fact I’ve a limited time before the rate finishes. The credit cards are 0% and will likely be clear before the fixed rate ends anyway but if instead I was to take out the additional £10k (and affordability would allow it), the minimum payments (plus some) could instead be added to the OPs and used to allow for a better deal come the point in which the fix ends because we’d have paid off more. 

The debt hasn’t been added to in a long time. It’s old and I’ve been overpaying CCs and BTing for about 2.5 years so I’m not asking to add to the mortgage due to poor money management or need of discipline.  

Would it come down to if the cost of the minimum payments were more than the additional monthly repayment when adding the 10k or in hindsight for likely an additional £360 (the amount I regularly pay for CCs) per month not actually going to make enough difference. 

MissRikkiC

Thanks for your reply. I know that I could likely borrow the 10k to cover this as I checked the calculator that you suggested earlier, late last night but I guess I was asking was it better to do so and use the money I then had available as I wasn’t paying the cards to pay off the mortgage instead. However on reflection the debt is at 0% so is better staying there then paying it off only to pay it back at a higher interest rate. Bed time thoughts are usually of no use! 

Clarkg85

Hi, looking for some advise from you wonderful lot on my best options...

We have sold out house and shortly about to exchange... hopefully within the next week or two. Out of this purchase we will receive around £250k after paying off the current small mortgage (70k) and remaining fees.

The problem.... during COVID I was made redundant and built up fairly significant (but fully manageable) debts in addition to recent work that was done to my house to achieve this selling price. In total I have around £26k on credit cards (mainly on 0%) and 40k of unsecured loans. Thankfully I have bounced back well in the past few years and have a secure job paying £97k a year Inc. bonuses (£82k basic).

The plan will be to fully pay off all these debts as soon as the sale goes through in the next 2-3 weeks leaving us with close to £200k cash in the bank.

My partner earns £40k and has no debts. She does however have a BTL let for the past 3 years with proven accounts. The house is worth around £180k with a 25% deposit and currently on a 5 year BTL mortgage. This is self sufficient and not looking to touch but didn't know if this would have any impact? She makes around £300 profit each months after all fees/tax etc and this is all kept in an account that isn't touched or factored into our deposit.

We are looking at houses in the £600-650k mark and have found one we love, and hoping we can wait another month or so for me to clear the debts and my credit file to reflect this. I'm guessing at this point we shouldn't struggle to much to get a £600k-£650k mortgage with a minimum 25% deposit? Max borrowing would b £487.5k on a basic combined salary of £122k + £15k bonuses once the debts are fully settled?

The final question I promise... We have been informed that the house we are interested in may have some interest and someone may be about to offer. If I were to use a broker, is there anyway we could secure a mortgage now before the debt is settled? If not and we were to offer and have it acceptable, would it be acceptable to wait a month to get a mortgage offer once the debt is settled whilst we get the survey and start the legal work?

Thanks in advance for any help you can offer.

Robbobss

Thanks for helping everyone out with the questions. I have a couple…

I’ve got about 6 payday loans when struggling with jobs, 2 over 3 years and the rest over 4 years. All were paid off but a few had a few late payments. 

I’ve had no ccjs or defaults and a 999 Experian score everything is squeeky clean 3 credit cards all with zero balance. Still got a small 5000 for a car loan paid off within the next year. 

My afardabilty is excellent and am looking at borrowing 50% of the max amount they say I can afford. 

I’ve had my bank llyods accept a AIP for what I asked for at 95% and also NatWest accepted what I asked for at 95%.

my main question is this…

what is the difference between soft and hard search? 

In a soft search would they check my credit and see all my closed accounts including the payday loans ? If so the fact that they accepted the AIP does that mean the payday loans won’t be an issue in hard search? 

Or do they not check for things like payday loans in the AIP and only in a hard search? 

blue_top_red_trainers

The 999 credit score means nothing to lenders and will not be used during an application, this is more of a marketing tool for customers. The hard search gives lenders/underwriters access to your last six years of credit history, closed and open accounts. I.e. Monthly Payments, financial association, addresses, court details, public information, previous searches, more in-depth than soft search.

K_S

Clarkg85 said:

Hi, looking for some advise from you wonderful lot on my best options...

We have sold out house and shortly about to exchange... hopefully within the next week or two. Out of this purchase we will receive around £250k after paying off the current small mortgage (70k) and remaining fees.

The problem.... during COVID I was made redundant and built up fairly significant (but fully manageable) debts in addition to recent work that was done to my house to achieve this selling price. In total I have around £26k on credit cards (mainly on 0%) and 40k of unsecured loans. Thankfully I have bounced back well in the past few years and have a secure job paying £97k a year Inc. bonuses (£82k basic).

The plan will be to fully pay off all these debts as soon as the sale goes through in the next 2-3 weeks leaving us with close to £200k cash in the bank.

My partner earns £40k and has no debts. She does however have a BTL let for the past 3 years with proven accounts. The house is worth around £180k with a 25% deposit and currently on a 5 year BTL mortgage. This is self sufficient and not looking to touch but didn't know if this would have any impact? She makes around £300 profit each months after all fees/tax etc and this is all kept in an account that isn't touched or factored into our deposit.

We are looking at houses in the £600-650k mark and have found one we love, and hoping we can wait another month or so for me to clear the debts and my credit file to reflect this. I'm guessing at this point we shouldn't struggle to much to get a £600k-£650k mortgage with a minimum 25% deposit? Max borrowing would b £487.5k on a basic combined salary of £122k + £15k bonuses once the debts are fully settled?

The final question I promise... We have been informed that the house we are interested in may have some interest and someone may be about to offer. If I were to use a broker, is there anyway we could secure a mortgage now before the debt is settled? If not and we were to offer and have it acceptable, would it be acceptable to wait a month to get a mortgage offer once the debt is settled whilst we get the survey and start the legal work?

Thanks in advance for any help you can offer.

@clarkg85

Affordability - once the debts are down to nil, with an income of 125-135k, 75% LTV and looking to borrow around 490k, self-sufficient background BTL, you *should* be fine to borrow what you mention, assuming max term isn't a factor.

'Reserving' a rate before paying off the debt - with some lenders you might be able to get to offer based on a commitment to pay off the debt before/at completion. However, you'll still need to have an offer accepted on the house before you can submit a mortgage application as it'll need to be valued, etc.