Mortgage broker - ask me anything

K_S

breaking80 said:

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 . . . 

@breaking80 Sorry, what I meant is locking in a product (fix or tracker) rather than a rate.

I don't really have an opinion on fix Vs tracker in general as that depends on the applicant's circumstances and preferences, and outlook on future rate rises (your guess is as good as mine!).

Looking at all lenders the diff between the best trackers and best 2 year fixes is a lot smaller than 5.4% Vs 6.5% as quite a few lenders have dropped rates in the past couple of days. The MSE best buy comparison here should capture that. https://www.moneysavingexpert.com/mortgages/best-buys/

Kabazzzz

I'm hoping someone can advise.  We just been declined a mortgage, affordability was OK.  Deposit was 5%.

A bit of background, it was to be a joint mortgage but my partner has just started a new job on a fixed term contract.  He has the deposit. 

The broker was struggling to find a lender that would accept my partner as he's only been in post for a month.

He'd managed to find a couple of lenders who would accept the deposit from my partner if he gifted it to me and I took the mortgage out in my sole name.  But I've failed the credit checks!  I have no adverse history but a credit card of approx £9.4k.  My salary is £51.5k pa.

We have nothing to sell and are currently in rented.

Is it worth trying another broker or is that it?

K_S

@Kabazzzz I might be missing some important detail or other complicating factors in the background, but quick thoughts -

- if it's affordable on your sole income, then clearly affordability isn't an issue on joint income and you *should* have options I would've thought, even at 95% LTV

- if your partner has continuous employment but is in currently in a new job, I don't see why that would be a limiting factor. If it's both a new job and the start of his career (or after a long break) then yes I can see why it would limit the number of lenders

- even if your partner's income can't be considered, by itself that isn't reason enough to leave him off the application. He can still go on as an applicant with zero income.

I would definitely recommend getting a second opinion from an experienced broker. Do mention the background, take a copy of both your credit reports (either CheckMyFile or Experian/Equifax). 

Don't stress too much, I'm assuming here that the lender credit-score decline was at the DIP/AIP soft-check stage so there's no harm done. Lender credit-scoring at 95% LTV is pretty strict, small things can make a difference, so it's not unusual to fail with one lender and still pass with the next.

Good luck!

Kabazzzz said:

I'm hoping someone can advise.  We just been declined a mortgage, affordability was OK.  Deposit was 5%.

A bit of background, it was to be a joint mortgage but my partner has just started a new job on a fixed term contract.  He has the deposit. 

The broker was struggling to find a lender that would accept my partner as he's only been in post for a month.

He'd managed to find a couple of lenders who would accept the deposit from my partner if he gifted it to me and I took the mortgage out in my sole name.  But I've failed the credit checks!  I have no adverse history but a credit card of approx £9.4k.  My salary is £51.5k pa.

We have nothing to sell and are currently in rented.

Is it worth trying another broker or is that it?

Kabazzzz

Thanks K_S

That's reassuring.  My partner had about 6 weeks out of work, but continued working his second job (army reserves) during that period.

I've checked my report and there's 2 adverse accounts, one which was settled and closed in 2018 and the other was with Next as I'd moved bank account and hadn't set up the DD in time, March 2020.  Other than that, there's nothing obvious.

You're right, it was at AIP stage.

I'll seek out another broker and see if we're still able to progress. 

Thanks for your comments and quick response!

theonenonly

I really appreciate what you're doing here.

Bit of an odd one here.

So my wife goes on maternity this month, she's a SEN teacher so earns only around £12k. I have an AIP via L and C and I don't think there was an option to mention that she will be on maternity.

Now realistically her going on maternity won't affect my ability to pay, however what does this do for our mortgage offers?

K_S

theonenonly said:

I really appreciate what you're doing here.

Bit of an odd one here.

So my wife goes on maternity this month, she's a SEN teacher so earns only around £12k. I have an AIP via L and C and I don't think there was an option to mention that she will be on maternity.

Now realistically her going on maternity won't affect my ability to pay, however what does this do for our mortgage offers?

@theoneonly With an applicant being on mat leave, the overall approach is pretty standard, though the specific evidence required (declaration, employer letter, etc.) will differ from lender to lender -

- if the applicant intends to go back to the same role with the same salary, then the lender will consider the pre-mat basic income. If the terms of employment will change (part-time, etc.) then that's what will be taken into account 

- costs associated (if any) with future childcare arrangements will be considered as a commitment. If it's still some way away, a reasonable estimate will suffice.

If you haven't already, do mention to the broker about one applicant being on mat leave as they'll need to know that to input the details accurately and completely.

hanfrangipane

Hi - relatively straightforward query please - do Lloyds do day one remortgages? Their remortgage rate for current account customers is preferable than those with our current lender but our remortgage will be taking place about 5-6 weeks after completion so need a lender who will do day one remortgages. Thanks!

K_S

hanfrangipane said:

Hi - relatively straightforward query please - do Lloyds do day one remortgages? Their remortgage rate for current account customers is preferable than those with our current lender but our remortgage will be taking place about 5-6 weeks after completion so need a lender who will do day one remortgages. Thanks!

@hanfrangipane Don't know about Lloyds as it's a direct-only lender. You'll probably need to call/chat with customer service and ask the question.

This is Halifax's criteria. Can't speak for this particular criteria point, but as they're both part of the same LBG group, I would expect most of their lending criteria to be similar.
"You must ensure your customer(s) have owned their property for at least six months before submitting a remortgage application."

hanfrangipane

K_S said:

hanfrangipane said:

Hi - relatively straightforward query please - do Lloyds do day one remortgages? Their remortgage rate for current account customers is preferable than those with our current lender but our remortgage will be taking place about 5-6 weeks after completion so need a lender who will do day one remortgages. Thanks!

@hanfrangipane Don't know about Lloyds as it's a direct-only lender. You'll probably need to call/chat with customer service and ask the question.

This is Halifax's criteria. Can't speak for this particular criteria point, but as they're both part of the same LBG group, I would expect most of their lending criteria to be similar.
"You must ensure your customer(s) have owned their property for at least six months before submitting a remortgage application."

Thank you! I didn't realise they were direct only, I'll give them a call this week. 

Wilt

Hi there,

I have a mortgage with Halifax part of which was ported from a previous property, so it is split in to two sub-accounts with two different products.

One of those products is coming to an end soon so I'll need to do a product transfer for that sub-account. However, I'd like to pay off quite a bit of that sub-account before I start a new product with an ERC.

Do I need to wait until the ERC period of the current product has ended, then make the payment to the sub-account, and only then initiate the product transfer (meaning I'll spend a small amount of time paying the SVR), or can I sort out the product transfer ahead of time?

Also does anybody know if Halifax are offering trackers on product transfers? It seems to only be offering fixed rates to switch to in my online account, but if I look at the Halifax intermediaries website it does look like they have a tracker product for remortgages.