Mortgage broker - ask me anything

Nearlydebtfree

Thanks for that, I will tell them today. The affordability is still ok on the new salary. 

My one concern was my new contract confirms the 6 month probationary period but says it can be terminated in that period  if my work isn’t satisfactory within that time - after stressful googling last night I’d read somewhere that Halifax won’t accept contracts with that clause in the probationary period - but surely the point of probation is they can get rid of you? 

K_S

Nearlydebtfree said:

Thanks for that, I will tell them today. The affordability is still ok on the new salary. 

My one concern was my new contract confirms the 6 month probationary period but says it can be terminated in that period  if my work isn’t satisfactory within that time - after stressful googling last night I’d read somewhere that Halifax won’t accept contracts with that clause in the probationary period - but surely the point of probation is they can get rid of you? 

@nearlydebtfree I can’t speak for your specific case but generally speaking I can’t imagine Halifax having an issue with a probation clause in a standard civil service employment contract for a perm PAYE position.

One of my recent FTB clients was a new starter (fresh out of uni) with HMRC as a Data Analyst on a specialist training program which involved a standard 6m probation period and having to pass certain exams within 2 years, even that was absolutely fine to go through as a normal perm contract with Halifax.

kingstreet

Nearlydebtfree said:

Thanks for that, I will tell them today. The affordability is still ok on the new salary. 

My one concern was my new contract confirms the 6 month probationary period but says it can be terminated in that period  if my work isn’t satisfactory within that time - after stressful googling last night I’d read somewhere that Halifax won’t accept contracts with that clause in the probationary period - but surely the point of probation is they can get rid of you? 

Halifax criteria;-

"Probation

Income from probationary employment is only used where the probationary period is part of a permanent contract. If the contract is purely probationary with the employer having the option to terminate the contract then this income cannot be used.

It is important that probationary contracts are keyed accurately as follows:

Where the applicant receives an offer of permanent employment and the contract states an initial probationary period e.g. three or six months, it should be keyed as 'permanent'. The income will be used in the affordability assessment.

Where the applicant is offered a probationary contract, e.g. for three months, at the end of which the employer has the option to determine if a permanent contract will be offered, it should be keyed as ‘probationary'. The income will not be used in the affordability assessment."

Snuggles

Hi there, I would really appreciate an idea of whether this is feasible or if it's likely to be difficult to find a lender in these circumstances.

Our current home is mortgage free. We want to buy a new home (to live in) with a mortgage whilst we sell our existing home (so we would own two properties whilst waiting for our existing home to sell - existing home would be left empty).

We can put down 20% deposit (new property is £230k), and we would be well within affordability as annual joint income is £90k, no debts and no dependants.

However, we'd want the mortgage to run until age 75 (I'm aged 50, and we want to keep the contractual payments as low as possible, just in case life throws any curveballs, but would overpay and obviously pay a significant chunk off when existing property sells).

The property we are interested in is literally one street away from our current home, a minute's walk away, and I'm not sure if this is likely to be a problem for lenders. 

Is this doable? Are there likely to be many options in these circumstances? I had identified Nationwide as a potential lender (I looked there first just because our previous mortgage was with them) but I can't see anything in their lending criteria about whether buying a second property very close to our existing home is likely to be an issue.

So, in summary:
It's an additional property purchase (but no existing mortgage and no letting of either property involved)
We want the term to extend until aged 75
The house we want to buy is very close to our current property.

Many thanks.

kingstreet

Sounds straightforward. Current property running costs will be treated as a cost for new mortgage affordability. Watch out for SDLT second property surcharge. Refunded after property one sells, for upto three years after being paid.

Snuggles

kingstreet said:

Sounds straightforward. Current property running costs will be treated as a cost for new mortgage affordability. Watch out for SDLT second property surcharge. Refunded after property one sells, for upto three years after being paid.

Thank you, much appreciated.

Yes we've factored in second home SDLT and I included the current property running costs as monthly commitments when I applied for a DiP with Nationwide, but obviously wasn't able to specify the precise circumstances in the DiP - particularly the fact that the property we're interested in is just round the corner. 

snowqueen555

If a 2 year fix gets approved I suppose it isn't possible to change to a 5 year fix before I actually take out the mortgage? Is it a lot of hassle for the lender?

Melis2024

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

I have just been declined a mortgage with Leeds building society after passing their AIP for much higher than we were asking for. 

Our mortgage broker says they declined due to both of us actively using our overdrafts. He also said ‘Leeds are a picky lender’ but that the only reason we applied for them in the first place was to see if we could get a cheaper rate. 

He is now putting an application forward for us with Accord mortgages and says that he’s seen people with much worse background debt be accepted by them. 

Just for context my partner and I have a combined income of 80k (both for an employer). We have both been active with our overdrafts (but have now cleared them from savings after being declined). We have no dependents and FTB. Looking for a 90-95% mortgage. Parents are able to act as guarantors if it came to it or will release equity from their home to help us. However, we are trying to avoid getting to that stage. Our total combined loan debt is 14k and credit cards totalling 11k between us. We have no CCJs, IVAs, missed payments between us. I have a settled payday loan that is now 4 years old but still shows on my credit file. 

I was wondering if you think applying for Accord is a good 2nd choice and also what you would advise doing if we are declined a second time? 

K_S

snowqueen555 said:

If a 2 year fix gets approved I suppose it isn't possible to change to a 5 year fix before I actually take out the mortgage? Is it a lot of hassle for the lender?

@snowqueen555 With the vast majority of mainstream lenders, it’s fairly straightforward to change products between offer and completion.

It may involve a refresh of the lender’s credit-scoring process which shouldn’t pose any issues as long as your credit file hasn’t changed materially.

K_S

@melis2024 Sorry to hear about the decline at manual review. 

95% LTV FTB mortgages can often be quite 50-50 when it comes to underwriting and given the details in your post, I can see why the Leeds u/w might decline it at 95% LTV - regular OD use, significant unsecured debt, historic PDL.

Accord is definitely one of the mainstream lenders that I would consider for a case like the above as they can often use a bit of common sense, manually factor in things like a paid off debt that doesn’t reflect on the credit report yet, etc. but I couldn’t say whether they’re the next best option or not.

If you get declined again, then if you have parents that are willing to help, the path of least resistance for mainstream rates might be to either get them to help you get to a 10% deposit, or use one of the many family-assist type products from mainstream or specialist lenders.

Good luck, I hope you get an offer soon!

Melis2024 said:

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

I have just been declined a mortgage with Leeds building society after passing their AIP for much higher than we were asking for. 

Our mortgage broker says they declined due to both of us actively using our overdrafts. He also said ‘Leeds are a picky lender’ but that the only reason we applied for them in the first place was to see if we could get a cheaper rate. 

He is now putting an application forward for us with Accord mortgages and says that he’s seen people with much worse background debt be accepted by them. 

Just for context my partner and I have a combined income of 80k (both for an employer). We have both been active with our overdrafts (but have now cleared them from savings after being declined). We have no dependents and FTB. Looking for a 90-95% mortgage. Parents are able to act as guarantors if it came to it or will release equity from their home to help us. However, we are trying to avoid getting to that stage. Our total combined loan debt is 14k and credit cards totalling 11k between us. We have no CCJs, IVAs, missed payments between us. I have a settled payday loan that is now 4 years old but still shows on my credit file. 

I was wondering if you think applying for Accord is a good 2nd choice and also what you would advise doing if we are declined a second time?