Mortgage broker - ask me anything

Ajcauser1

Hi all,
we are due to remortgage at the end of December (£320k outstanding on 600k property).
Our original plan when we took out the last 5 year fixed was to borrow a bit more now to do some building work. It looks like with the increase in repayments that this would result in on top of the general hikes due to inflated interest rates is not going to be affordable for us. Currently repayments are £1350 and quotes to date are looking near £2000 without extra borrowing on a 2 year fix (which realistically is probably at the top of what would be affordable).

My current thought is to do the above and fix for 2 years and hope that rates at that time are in a better position where we could then borrow additionally. 

I have also had a look at trackers but have no experience with these personally and don’t know if it would be felt to be a better option in the current climate.
My question really is whether there are any other options that I have not thought of where rates would could come in at an affordable cost and allow additional borrowing for a 2 story side extension? 

And if not, whether the plan detailed above (2 year fixed now) seems like a sensible option?

Thank you all in advance.

Andy

K_S

Ajcauser1 said:

Hi all,
we are due to remortgage at the end of December (£320k outstanding on 600k property).
Our original plan when we took out the last 5 year fixed was to borrow a bit more now to do some building work. It looks like with the increase in repayments that this would result in on top of the general hikes due to inflated interest rates is not going to be affordable for us. Currently repayments are £1350 and quotes to date are looking near £2000 without extra borrowing on a 2 year fix (which realistically is probably at the top of what would be affordable).

My current thought is to do the above and fix for 2 years and hope that rates at that time are in a better position where we could then borrow additionally. 

I have also had a look at trackers but have no experience with these personally and don’t know if it would be felt to be a better option in the current climate.
My question really is whether there are any other options that I have not thought of where rates would could come in at an affordable cost and allow additional borrowing for a 2 story side extension? 

And if not, whether the plan detailed above (2 year fixed now) seems like a sensible option?

Thank you all in advance.

Andy

@ajcauser1 Current interest rates are what they are and with respect to the choices of fix length, tracker, etc. , the outcome depends on future interest rates and which direction they move in, which is impossible to predict and your guess is as good as mine. Imho the choice should be based more on your personal circumstances, attitude to risk, etc. than where you feel rates might be at in 2 years time.

If you whittle down “cost” to your monthly mortgage payment, then the different options you may have to maximise what your can borrow now while minimising your monthly payment are considering one or more of the following options - stretching your term (eg: if you’re 39 or less you could potentially get up to a 40 year term based solely on your current income), using a lender that is generous with affordability, opting for a 5 year fix (lenders may apply looser affordability stress tests on 5+ year fixes), part-and-part borrowing, etc.

Eddie2023

Hello, are there any mainstream lenders who would look at someone with full employed history until redundancy June this year. Now self employed - several clients but all short assignments (as one ends a new one starts, project mgt) and also been offered a 15 month fixed term employed contract 2.5 days a week ? 40% deposit likely

Also looking at option of JBSP - I am mortgage free, employed but 57 years old. Cannot secure on my property 

Daughter currently has a great fixed rate with NW til end 2025 but they are saying no to porting because she no longer fits their criteria despite no missed payments and several overpayments !

K_S

Eddie2023 said:

Hello, are there any mainstream lenders who would look at someone with full employed history until redundancy June this year. Now self employed - several clients but all short assignments (as one ends a new one starts, project mgt) and also been offered a 15 month fixed term employed contract 2.5 days a week ? 40% deposit likely

Also looking at option of JBSP - I am mortgage free, employed but 57 years old. Cannot secure on my property 

Daughter currently has a great fixed rate with NW til end 2025 but they are saying no to porting because she no longer fits their criteria despite no missed payments and several overpayments !

@eddie2023 If it’s true self-employment (sole trader/ltd co, multiple clients, concurrent contracts, etc.) then it’s unlikely until she has a year’s accounts.

If she’s a day-rate contractor, it’s in the same career as before (IT PM for example) and relatively high income, then there might be lenders that will consider.

Similar with the 15 month part-time contract, but affordability will be limited to the part-time salary.

JBSP - at 57, if you’re in a desk based role and you have an intended retirement age of 80, then the term could be as long as 22 years so could potentially borrow what you need. JBSP does not involve any charges being secured on the parent’s home.

NW porting - she won’t meet their policy for additional borrowing but may still be able to get an exception if the porting is like-for-like (no increase in loan size or LTV).

Eddie2023

Thank you. Sounds like we have options. That's interesting about the NW porting if no one else will look at her / us. LTV would decrease to what she has now. Thank you again

JW2709

Hi 

hoping someone can give me some more info please. 

Have spoken with a broker as first time buyers. Wife has a good credit history with a couple of late payments 1 in Jan 2021 and one in 2019. I have a CCJ £450 4 years old in Jan and satisfied earlier this year. Affordability for the mortgage/ house price isn’t an issue. 

My score is low, wife’s score is high but understand experian scores etc don’t necessarily mean much as lenders do their own scoring. 

I have tried for multiple AIPs with high street lenders before getting in touch with my broker and I was rejected from HSBC but accepted with Nationwide and NatWest. Having spoken with my broker today he feels we meet the criteria to apply for an AIP with HSBC. 

My question is if I have been rejected for an AIP (through their site) what is the chances of it being approved via a broker? Is there any difference when a broker applies for a DIP?

thanks in advance. 

K_S

@jw2709 If you already have DIPs from 2 high-street lenders, the marginal benefit of getting a DIP from more mainstream lenders is quite low. With respect to mainstream lenders, it's like a merry go round and the "best rate" at different LTVs keeps changing hands, and they're rarely too far apart on a total cost basis.

For example, a 95% LTV FTB couple client of mine had an offer accepted last week. In the few days it took them to give me the go ahead and documents for a full application, the cheapest lender moved from Skipton to Santander to HSBC, and the difference between them on a total cost basis over 5 years was barely £200-400 or so. 

To answer your question -

Is HSBC credit-scoring different direct and through an intermediary - honest answer is I don't know anything about direct. I wouldn't expect there to be any major difference but I guess it depends on what the lenders data says about the riskiness of a direct applicant Vs one that comes through a broker.

Might a broker return a different result - perhaps. For example, with HSBC I know that they lend to 80 but have stricter scoring thresholds at 70 and then 75, so I might adjust the term if it's just above those thresholds and that might be sufficient it tip it over the edge if it's a narrow fail. With Halifax switching the order of the applicants can sometimes return a different result. I don't know what you can see with a Direct DIP decline but with a broker DIP I can speak to the BDM and try find out what the reason for the decline is and then see if it can be changed. For example the decline might be due to the system reading a credit account incorrectly.

But again, tbh, with a CCJ on file and DIPs from two high street lenders, I'd just stop at that for now. Once you have an offer accepted and are ready to put in a full app, you can always try out DIPs with the cheapest lenders at that time and then go from there. Plus, with adverse on file, there's always the small risk that the underwriter will decline the case when it gets to manual review, even if it's passed DIP scoring.

Good luck!

JW2709 said:

Hi 

hoping someone can give me some more info please. 

Have spoken with a broker as first time buyers. Wife has a good credit history with a couple of late payments 1 in Jan 2021 and one in 2019. I have a CCJ £450 4 years old in Jan and satisfied earlier this year. Affordability for the mortgage/ house price isn’t an issue. 

My score is low, wife’s score is high but understand experian scores etc don’t necessarily mean much as lenders do their own scoring. 

I have tried for multiple AIPs with high street lenders before getting in touch with my broker and I was rejected from HSBC but accepted with Nationwide and NatWest. Having spoken with my broker today he feels we meet the criteria to apply for an AIP with HSBC. 

My question is if I have been rejected for an AIP (through their site) what is the chances of it being approved via a broker? Is there any difference when a broker applies for a DIP?

thanks in advance. 

JW2709

K_S said:

@jw2709 If you already have DIPs from 2 high-street lenders, the marginal benefit of getting a DIP from more mainstream lenders is quite low. With respect to mainstream lenders, it's like a merry go round and the "best rate" at different LTVs keeps changing hands, and they're rarely too far apart on a total cost basis.

For example, a 95% LTV FTB couple client of mine had an offer accepted last week. In the few days it took them to give me the go ahead and documents for a full application, the cheapest lender moved from Skipton to Santander to HSBC, and the difference between them on a total cost basis over 5 years was barely £200-400 or so. 

To answer your question -

Is HSBC credit-scoring different direct and through an intermediary - honest answer is I don't know anything about direct. I wouldn't expect there to be any major difference but I guess it depends on what the lenders data says about the riskiness of a direct applicant Vs one that comes through a broker.

Might a broker return a different result - perhaps. For example, with HSBC I know that they lend to 80 but have stricter scoring thresholds at 70 and then 75, so I might adjust the term if it's just above those thresholds and that might be sufficient it tip it over the edge if it's a narrow fail. With Halifax switching the order of the applicants can sometimes return a different result. I don't know what you can see with a Direct DIP decline but with a broker DIP I can speak to the BDM and try find out what the reason for the decline is and then see if it can be changed. For example the decline might be due to the system reading a credit account incorrectly.

But again, tbh, with a CCJ on file and DIPs from two high street lenders, I'd just stop at that for now. Once you have an offer accepted and are ready to put in a full app, you can always try out DIPs with the cheapest lenders at that time and then go from there. Plus, with adverse on file, there's always the small risk that the underwriter will decline the case when it gets to manual review, even if it's passed DIP scoring.

Good luck!

JW2709 said:

Hi 

hoping someone can give me some more info please. 

Have spoken with a broker as first time buyers. Wife has a good credit history with a couple of late payments 1 in Jan 2021 and one in 2019. I have a CCJ £450 4 years old in Jan and satisfied earlier this year. Affordability for the mortgage/ house price isn’t an issue. 

My score is low, wife’s score is high but understand experian scores etc don’t necessarily mean much as lenders do their own scoring. 

I have tried for multiple AIPs with high street lenders before getting in touch with my broker and I was rejected from HSBC but accepted with Nationwide and NatWest. Having spoken with my broker today he feels we meet the criteria to apply for an AIP with HSBC. 

My question is if I have been rejected for an AIP (through their site) what is the chances of it being approved via a broker? Is there any difference when a broker applies for a DIP?

thanks in advance. 

Thanks for the reply. Reason for reaching out to a broker was because of the adverse history. He also advised we stand a better chance if putting down 15% deposit which we will.  I guess I’m concerned given that I can’t pass a DIP with HSBC when I complete it on their site but he is recommending we apply with them via him. 

jonnydeppiwish!

@K_S thanks for previous advise on how to keep both houses. After calculating finances, we’d only make money on a rental after an about 4 years and potentially make us ‘tight’ with money through a prolonged void/nonpayment period.

Going to sell current home to buy a detached instead.  Will have ~ £400k for a deposit, £110k joint income with no debts and only normal household bills. Looking for £200k (inc STDP) mortgage. 

Would we be best to see broker or go direct? Also 3/5 years fix?

Thanks in advance

hannah9000

Hoping someone might be able to help…we tried to buy a house earlier this year, got an AIP, put an offer on a house, instructed solicitors, then lender changed their mind and wanted a 30% deposit instead of 15% because the base rate went up. Sale fell through, everyone gutted, even the broker was gobsmacked. 

Anyway we moved on, the reason for the change in deposit is because my husband is 2yrs discharged from bankruptcy, will be 3yrs in March and we basically said we’d wait until that 3 years has passed so that we’re eligible to more high street lenders - what we’re wondering is whether we have to wait for that date to pass or if we can start looking for an AIP sooner on the basis that he’ll soon be 3yrs discharged?