Mortgage broker - ask me anything

K_S

Robbobss said:

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? 

@robbobss

Diff between soft and hard check - Generally speaking, lenders can see the exact same things on your report (6 year history of all open and closed accounts reported to that credit bureau) the only difference is whether they leave a 'we were here' marker on your credit report or not. However, do note that some lenders may use different credit bureaus at DIP and full-app stage, so the result might not always be consistent.

PDL history - 95% LTV DIPs are a definite positive sign. However, payday loans aren't always marked as such on reports and whether or not a loan is classed as a PDL depends on the details (length, rate, etc.). So when it comes to a full application the underwriter might manually review the applicants report, take into account any PDL history visible and perhaps change the decision.

Having said that, if the pdls are well in the past, you have no defaults or ccjs and no credit issues since then (your 999 score itself isn't looked at by the lender but it usually indicates that your recent Experian credit history is squeaky clean), you should be able to borrow at 95% LTV with a mainstream lender.

Good luck!

Jjmbrown1

Hi, thanks for helping with questions.

My 2 year fixed comes to an end on my property on Feb 29th 2024, had property 2 years. Earn £65k per annum and house is solely mine. Credit is good never had any debts/missed payments etc/never missed mortgage.. However in the last few months I have relapsed from a bad gambling addiction, lost all my savings just within the last week but not in any debt, just starting from 0 basically. No loans/credit card debt either.  My bank statements are covered in cash withdrawals up to £1,250 some days. I have committed to stopping this now but conscious of what the impact will be for remortgaging? 

If I start a fresh from today, have 3 months of 'clean' bank statements, and begin my remortgaging process on Dec 1st, will this be ok for a 29th Feb renewal on time? Is there anything else I should be doing in this situation?

Thanks for your help. 

K_S

Jjmbrown1 said:

Hi, thanks for helping with questions.

My 2 year fixed comes to an end on my property on Feb 29th 2024, had property 2 years. Earn £65k per annum and house is solely mine. Credit is good never had any debts/missed payments etc/never missed mortgage.. However in the last few months I have relapsed from a bad gambling addiction, lost all my savings just within the last week but not in any debt, just starting from 0 basically. No loans/credit card debt either.  My bank statements are covered in cash withdrawals up to £1,250 some days. I have committed to stopping this now but conscious of what the impact will be for remortgaging? 

If I start a fresh from today, have 3 months of 'clean' bank statements, and begin my remortgaging process on Dec 1st, will this be ok for a 29th Feb renewal on time? Is there anything else I should be doing in this situation?

Thanks for your help. 

@jjmbrown1 Sorry to hear this. Based on what you have said, you would probably be classed as a 'vulnerable' client under the new Consumer Duty regulations that have been implemented recently. In theory it's supposed to help, but it's hard to say how it may or may not impact you.

Potential impact -

Product-switch/product-transfer/rate-switch (staying with your own lender and simply picking a new rate) - no impact

Remortgage (changing lenders) - if your recent bank statements have multiple, regular and significant cash withdrawals, it could go one of two ways. One the lender doesn't ask for any bank statements and it sails through. Or the lender asks for bank statements (either as part of standard packaging or underwriter request) and queries the reason for these series of cash withdrawals.

What you could consider doing - with a fix ending on 29th Feb, you enter the 6 month window in September. Most (not all) mainstream lenders will allow you to secure a product-switch up to 6 months in advance, and allow you to cancel it before completion. If your lender falls in that category, it might be worth doing that so you have one rate under the belt no matter what happens after that. Once that is done, then with regard to a remortgage it's up to you what to do, apply now or wait for later and apply then.

Jjmbrown1

K_S said:

Jjmbrown1 said:

Hi, thanks for helping with questions.

My 2 year fixed comes to an end on my property on Feb 29th 2024, had property 2 years. Earn £65k per annum and house is solely mine. Credit is good never had any debts/missed payments etc/never missed mortgage.. However in the last few months I have relapsed from a bad gambling addiction, lost all my savings just within the last week but not in any debt, just starting from 0 basically. No loans/credit card debt either.  My bank statements are covered in cash withdrawals up to £1,250 some days. I have committed to stopping this now but conscious of what the impact will be for remortgaging? 

If I start a fresh from today, have 3 months of 'clean' bank statements, and begin my remortgaging process on Dec 1st, will this be ok for a 29th Feb renewal on time? Is there anything else I should be doing in this situation?

Thanks for your help. 

@jjmbrown1 Sorry to hear this. Based on what you have said, you would probably be classed as a 'vulnerable' client under the new Consumer Duty regulations that have been implemented recently. In theory it's supposed to help, but it's hard to say how it may or may not impact you.

Potential impact -

Product-switch/product-transfer/rate-switch (staying with your own lender and simply picking a new rate) - no impact

Remortgage (changing lenders) - if your recent bank statements have multiple, regular and significant cash withdrawals, it could go one of two ways. One the lender doesn't ask for any bank statements and it sails through. Or the lender asks for bank statements (either as part of standard packaging or underwriter request) and queries the reason for these series of cash withdrawals.

What you could consider doing - with a fix ending on 29th Feb, you enter the 6 month window in September. Most (not all) mainstream lenders will allow you to secure a product-switch up to 6 months in advance, and allow you to cancel it before completion. If your lender falls in that category, it might be worth doing that so you have one rate under the belt no matter what happens after that. Once that is done, then with regard to a remortgage it's up to you what to do, apply now or wait for later and apply then.

Thank you for your quick response. Would it be possible that I could wait until mid december  to have a remortgage go live for 29th feb? Is that a reasonable time frame - 70 days or so - to go through the process and fo live on time?

Will lenders question why my savings are so low as a high earner?

IAMIAM

How do I extend my term with HSBC, had my mortgage account less than 6 months.
Remortgage. Won't let me do it online? Is it allowed?

K_S

Jjmbrown1 said:

K_S said:

Jjmbrown1 said:

Hi, thanks for helping with questions.

My 2 year fixed comes to an end on my property on Feb 29th 2024, had property 2 years. Earn £65k per annum and house is solely mine. Credit is good never had any debts/missed payments etc/never missed mortgage.. However in the last few months I have relapsed from a bad gambling addiction, lost all my savings just within the last week but not in any debt, just starting from 0 basically. No loans/credit card debt either.  My bank statements are covered in cash withdrawals up to £1,250 some days. I have committed to stopping this now but conscious of what the impact will be for remortgaging? 

If I start a fresh from today, have 3 months of 'clean' bank statements, and begin my remortgaging process on Dec 1st, will this be ok for a 29th Feb renewal on time? Is there anything else I should be doing in this situation?

Thanks for your help. 

@jjmbrown1 Sorry to hear this. Based on what you have said, you would probably be classed as a 'vulnerable' client under the new Consumer Duty regulations that have been implemented recently. In theory it's supposed to help, but it's hard to say how it may or may not impact you.

Potential impact -

Product-switch/product-transfer/rate-switch (staying with your own lender and simply picking a new rate) - no impact

Remortgage (changing lenders) - if your recent bank statements have multiple, regular and significant cash withdrawals, it could go one of two ways. One the lender doesn't ask for any bank statements and it sails through. Or the lender asks for bank statements (either as part of standard packaging or underwriter request) and queries the reason for these series of cash withdrawals.

What you could consider doing - with a fix ending on 29th Feb, you enter the 6 month window in September. Most (not all) mainstream lenders will allow you to secure a product-switch up to 6 months in advance, and allow you to cancel it before completion. If your lender falls in that category, it might be worth doing that so you have one rate under the belt no matter what happens after that. Once that is done, then with regard to a remortgage it's up to you what to do, apply now or wait for later and apply then.

Thank you for your quick response. Would it be possible that I could wait until mid december  to have a remortgage go live for 29th feb? Is that a reasonable time frame - 70 days or so - to go through the process and fo live on time?

Will lenders question why my savings are so low as a high earner?

@jjmbrown1

- Can't speak for specific cases, but generally, for most like-for-like (no change in loan amount) re-mortgages with a mainstream lender, 70 days should be plenty of time to get from application to completion.

- I've never had a lender ask anything about the applicant's savings for a like-for-like remortgage where there's no cash deposit or cash being extracted.

K_S

IAMIAM said:

How do I extend my term with HSBC, had my mortgage account less than 6 months.
Remortgage. Won't let me do it online? Is it allowed?

@iamiam I doubt you'd be able to initiate this online. Probably need to call HSBC existing customer helpline and go from there. I've had clients who extended their term and HSBC said they need to contact the lender direct.

breaking80

Hi, long time reader of forums, first time poster - really grateful of the offer of advice and guidance :-)

Due to reach end of current mortgage fixed term at the end of the year - current rate ending is 1.1% (£1100 / month)
Current provider has offered a range of 2yr @ 6.5% to 10yr @5.5%

House value £450k 
Mortgage £225k
Remaining term - 18 years
If we stick with current provider and term and go on a fixed 2 yr deal - payments will increase by around £600 / month. 

My gut feel is to move to a tracker - current offers are around 5.4% (5.25 + 0.14). 
I know the base rate could go up but we have almost 1% to 'play' with before they get to the 6.5% that we've been offered as a 2yr fix. 

My thoughts are to increase the term to 25 years, on a tracker, which would be around £1350 / month with no exit fees should we decide to move to a fixed in the future. If base rate goes up it's manageable . . . if it comes down then even better :-) 

Is there anything else I should be considering? Anything you would advise strongly against / for / us to think about? 

Thanks again

K_S

@breaking80 All looks sound.

Definitely look at the whole market and don't limit yourself to the current lender, lock in a rate sooner rather than later (you can always switch to a lower rate if it drops but not the other way) and consider stretching the term (quite a few lenders will now go to 75-80) if a low monthly payment and flexibility is important to you. You can always use the annual 10% overpayment allowance to achieve the same impact as a shorter term while still retaining maximum flexibility.

breaking80 said:

Hi, long time reader of forums, first time poster - really grateful of the offer of advice and guidance :-)

Due to reach end of current mortgage fixed term at the end of the year - current rate ending is 1.1% (£1100 / month)
Current provider has offered a range of 2yr @ 6.5% to 10yr @5.5%

House value £450k 
Mortgage £225k
Remaining term - 18 years
If we stick with current provider and term and go on a fixed 2 yr deal - payments will increase by around £600 / month. 

My gut feel is to move to a tracker - current offers are around 5.4% (5.25 + 0.14). 
I know the base rate could go up but we have almost 1% to 'play' with before they get to the 6.5% that we've been offered as a 2yr fix. 

My thoughts are to increase the term to 25 years, on a tracker, which would be around £1350 / month with no exit fees should we decide to move to a fixed in the future. If base rate goes up it's manageable . . . if it comes down then even better :-) 

Is there anything else I should be considering? Anything you would advise strongly against / for / us to think about? 

Thanks again

breaking80

K_S said:

@breaking80 All looks sound.

Definitely look at the whole market and don't limit yourself to the current lender, lock in a rate sooner rather than later (you can always switch to a lower rate if it drops but not the other way) and consider stretching the term (quite a few lenders will now go to 75-80) if a low monthly payment and flexibility is important to you. You can always use the annual 10% overpayment allowance to achieve the same impact as a shorter term while still retaining maximum flexibility.

breaking80 said:

Hi, long time reader of forums, first time poster - really grateful of the offer of advice and guidance :-)

Due to reach end of current mortgage fixed term at the end of the year - current rate ending is 1.1% (£1100 / month)
Current provider has offered a range of 2yr @ 6.5% to 10yr @5.5%

House value £450k 
Mortgage £225k
Remaining term - 18 years
If we stick with current provider and term and go on a fixed 2 yr deal - payments will increase by around £600 / month. 

My gut feel is to move to a tracker - current offers are around 5.4% (5.25 + 0.14). 
I know the base rate could go up but we have almost 1% to 'play' with before they get to the 6.5% that we've been offered as a 2yr fix. 

My thoughts are to increase the term to 25 years, on a tracker, which would be around £1350 / month with no exit fees should we decide to move to a fixed in the future. If base rate goes up it's manageable . . . if it comes down then even better :-) 

Is there anything else I should be considering? Anything you would advise strongly against / for / us to think about? 

Thanks again

Thanks for the reply - so would you only consider fixed rate rather than tracker? Should have also mentioned - we are considering a house move next year or 2025 - nothing definite but . . .