Mortgage broker - ask me anything

rottcodd

Have you ever come across examples of mortgages being pulled post exchange? We have exchanged and have quite a big gap until completion. Nothing on our credit cards, no loans, no new finance etc but sonething we're still worried about. 

K_S

K_S said:

machiavellie said:

Once you've accepted a mortgage offer from a lender, how likely is it they will pull out and refuse to release the funds before completion (assuming my circumstances don't change).

Completion is 8th September and just being a bit paranoid.

@machiavellie There are only a few reasons why a mainstream lender would reconsider/reassess an offer between offer and completion. The main ones are -
- suspicion of application fraud (incorrect information supplied on the application)
- material change in applicant's circumstances (credit history, debt levels, income type, job status, etc.)
- new information coming to light which makes a material difference (eg: solicitor reporting unacceptable lease terms)

So there's nothing to worry about for the vast majority of applications, they complete as expected. Even at the height of the Truss mortgage volatility, I haven't heard of a single instance in which a mainstream mortgage lender withdrew an offer because rates had jumped significantly between offer and completion.

@rottcodd Exchange is a matter for the solicitor and yourself, it's not a milestone that is relevant to the lender. Nevertheless, the above post should help answer your question as it touches upon some of the reasons why a lender might pull an offer between offer and completion.

rottcodd said:

Have you ever come across examples of mortgages being pulled post exchange? We have exchanged and have quite a big gap until completion. Nothing on our credit cards, no loans, no new finance etc but sonething we're still worried about. 

jamest88

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

In your opinion is a 2 year or 5 year fix best on average. Obviously not financial advice just would like your opinion. I just took a 2 year fix at 5.1% with the hope it might come down by then 

Zerforax

I can see why banks won't offer mortgages without early repayment charges (since would then be too easy to leave them for better rates elsewhere) but can you find mortgages where the overpayment allowance is higher than 10% of the mortgage per calendar year? Ideally something like 20-25% being able to overpay without ERC..

K_S

Zerforax said:

I can see why banks won't offer mortgages without early repayment charges (since would then be too easy to leave them for better rates elsewhere) but can you find mortgages where the overpayment allowance is higher than 10% of the mortgage per calendar month? Ideally something like 20-25% being able to overpay without ERC..

@Zerforax One of the reasons for an ERC on fixed rate mortgages can be to do with the lender's cost of funding. Many lenders will borrow money at fixed rates (where the duration matches the fix that they've offered you) on the wholesale money markets and then lend this to the borrower. If the borrower then decides to repay the loan early, the lender is still on the hook so it costs them.

To answer your question - NatWest, Atom/Digital are two large/large-ish lenders that have a 20% o/p allowance on fixed rate mortgages. I'm sure there's probably a few more but I can't think of any off of the top of my head. Barclays only has a 10% o/p allowance but because of the way it works you can effectively overpay well above 10% in a year, have a search on the forums for discussions on how best to maximise overpaying on Barclays mortgages. Nationwide is 10% but that's based on the initial borrowed amount so can work out to be more generous that most lenders that base it on anniversary balance.

To go above 20% you'd have to look at things like offset, flexi fix, non fixed rates, etc.

theonenonly

I've used the Nationwide Intermediary link to see how much they will lend me, and it's spat out some figures (both non/helping hand). How accurate will this be to the actual amount they will offer? I don't want to start looking for houses based on these numbers only to be offered a vastly lower amount when putting through the actual application

kingstreet

theonenonly said:

I've used the Nationwide Intermediary link to see how much they will lend me, and it's spat out some figures (both non/helping hand). How accurate will this be to the actual amount they will offer? I don't want to start looking for houses based on these numbers only to be offered a vastly lower amount when putting through the actual application

It's accurate if you put the right numbers in the right boxes. For example, overtime etc paid at the same amount month in month out can be added to basic. be careful of any credit you intend to repay as it may not be ignored for affordability. I'd suggest getting broker help if you want 100% accuracy as they can do a decision in principle (soft search) as well to confirm the maximum.

Nearlydebtfree

Hi - we have just sold our house and had an offer accepted on another. I have a current mortgage with Halifax which we have confirmed can be ported and they are carrying out a valuation this week.

i have just been offered a new job today with the civil service which i intend to take. It is about £3k less than my current salary but has better career prospects although it has a 6 month probationary period. I don’t think it will change the affordability aspect but do I need to tell them about it now or when I start there?

I am on 3 months notice to leave and so would be potentially leaving at the beginning of April and so may be the same or very similar time to moving if things go to plan. I don’t want them to withdraw the offer because I have a new job but I can’t not accept it! Our joint salary would be reduced from £85k to £81500 and we are porting a mortgage of £230k.

thanks in advance 

Archerychick

Zerforax said:

I can see why banks won't offer mortgages without early repayment charges (since would then be too easy to leave them for better rates elsewhere) but can you find mortgages where the overpayment allowance is higher than 10% of the mortgage per calendar year? Ideally something like 20-25% being able to overpay without ERC..

NatWest allow 20% and first direct is unlimited overpayments 

K_S

Nearlydebtfree said:

Hi - we have just sold our house and had an offer accepted on another. I have a current mortgage with Halifax which we have confirmed can be ported and they are carrying out a valuation this week.

i have just been offered a new job today with the civil service which i intend to take. It is about £3k less than my current salary but has better career prospects although it has a 6 month probationary period. I don’t think it will change the affordability aspect but do I need to tell them about it now or when I start there?

I am on 3 months notice to leave and so would be potentially leaving at the beginning of April and so may be the same or very similar time to moving if things go to plan. I don’t want them to withdraw the offer because I have a new job but I can’t not accept it! Our joint salary would be reduced from £85k to £81500 and we are porting a mortgage of £230k.

thanks in advance 

@nearlydebtfree
Change of job - Assuming it's a perm PAYE role, Halifax is fine with new jobs, even those that haven't started yet. So that by itself shouldn't be an issue.
Reduction in salary - whether or not that makes a difference to borrow 230k will depend on the affordability calcs. You can get a rough idea using Halifax's affordability calculator here https://www.halifax-intermediaries.co.uk/tools-calculators/mortgage-affordability-calculator.html