Mortgage broker - ask me anything

K_S

jjmmww1 said:

K_S said:

jjmmww1 said:

Due to remortgage dec 24 

Whats the best way to go about this? Do i  just look on the app around June to see what rates i'm being offered or do i go back to my broker to see if they can get me a better rate ( don't really want a credit check since we have credit card and loans outstanding currently but hoping only a loan left by dec)  currently if i was on the standard it tell me my payments would be 1300 which would be well out of price since its double what were paying now

Also how does it value my house as the app currently suggests im at an LTV of 62% and our house is 254k vs the 205k we paid nearly 5 years ago 

@jjmmww1 With a remortgage due in 11 months, there are a few ways to go about locking a rate. Wait until 6m before expiry (vast majority of lenders), 7m (eg: NatWest allows 6+1 ie 6 months initial validity plus 1 month extension), wait until 8-9m before expiry (a handful of lenders like Nationwide, CoOp allow 6+2/3), lock in now with a lender that allows 6+6 (eg: Leeds).

Valuation -

- product-switch with your current lender will use an indexed valuation which is what you're seeing on the app
- remortgage with a new lender, they will do a fresh valuation which may be an internal inspection, driveby valuation or a desktop one.

Thank you thats helpful with nationwide currently so will have a look in a few months time then and see what the app offers. I was hoping for around the 4% mark  now going by recent rates but wanted to lock something in as soon as just in case something crazy happens at least i know i could afford it.  

One last thing is it likely to get better rates switching as per everything else (ie internet,phone,insurance) ? or will it just be what there offering to all? as normally switching anything will give better offers to " new customers"

@jjmmww1 Just to be clear, everything I’ve said above relates to remortgages (new lender) not product-switches (existing lender).

For example if you’re remortgaging to Nationwide they allow you to reserve a rate for 3 months followed by a 6 month offer validity so you can effectively lock in a rate 8 months in advance.

For a product-switch for a Nationwide existing customer, it’s a 6 month window, there’s no option to reserve a rate afaik.

Wrt product-switch rates for existing customers vs rates for new remo customers, it depends on the lender - some may offer worse rates, some better and some the same. Nationwide is one of the fairer lenders in this regard.

Which lender is at the top of the rate tables keeps changing depending on when you check and which lenders will consider you.

KJ1995

Hello

I completed on my flat in February 2023.

I paid £450,000. My deposit was £110,000 and my HTB Equity Loan I received was £180,000 - meaning my mortgage amount was £160,000.

My mortgage is 40 years with a 5.04% interest rate which isn't very good - fixed for 2 years and up for renewal circa November 2024.

I have been able to save approx. £1,000 per month since moving in, and my initial idea was to pay as much of my HTB Loan as possible after 5 years.

As mortgage rates are coming down, I hope to get a new 2 or 5 year fixed rate at the end of the year hopefully around the 3 / 3.5% mark if they continue to drop - fingers crossed - so my monthly repayments will be a lot lower meaning I can put more into my savings.

Question - do you think it would be wise for me to use my additional savings every month to pay as much of my mortgage off as I possibly can by the 5 year mark? My rationale for this is because the interest rate on my HTB Loan at Year 6 will still be significantly lower than my mortgage interest rate - so the more I have paid off the mortgage the better?

I may also come into some inheritance so I was thinking of maybe using this to pay off as much of the mortgage as I can by the 5 year mark? And then start paying my HTB Loan from the point of Year 6?

What are your thoughts? Many thanks in advance.

Kmb22

Hi,

please could anyone shed some light on the underwriter process. We are first time buyers, we have a decision in principle from NatWest, we have asked been asked to provide our bank statements. For the last 3 months , I would say six months maybe more I’ve been out helping my Daughter out furnished a new flat and buying stuff for my new grandchild so my bank statements look like I spend all of my wages. But I never go into an overdraft and all my bales are paid on time and my credit rating is very good. Well my mortgage application be declined at this point, my partner hardly spend anything please could anyone shed any light on this as it’s keeping me awake at night. Thank you 

K_S

@KJ1995 I couldn't say what is best for you as it will depend on what you proritise/value, what risks you are willing to accept, etc. But I would do what you are proposing, prioritise the mortgage over the HTB loan.

Personally, even beyond year 5, I would just go by whichever rate is lower and pay that off. The way I see it, the HTB loan is a govt backed loan with restricted interest rate hikes and also helps me hedge the risk of house price movement . Even in the very unlikely event that RPI ran at 5% for each and every year from year 6 onwards, the HTB interest rate would be 2.2% in year 10, less than 3% in year 15 and so on so I myself would prioritise paying off the mortgage first.

Again, some would prefer to pay the govt loan off first so they don't have to share any gain when the property is sold, but it depends on your perspective.

RPI	Year	HTB Interest rate (approx)
	1	-
	2	-
	3	-
	4	-
	5	-
	6	1.75%
5%	7	1.86%
5%	8	1.97%
5%	9	2.08%
5%	10	2.21%
5%	11	2.34%
5%	12	2.48%
5%	13	2.63%
5%	14	2.79%
5%	15	2.96%
5%	16	3.13%
5%	17	3.32%
5%	18	3.52%
5%	19	3.73%
5%	20	3.96%

KJ1995 said:

Hello

I completed on my flat in February 2023.

I paid £450,000. My deposit was £110,000 and my HTB Equity Loan I received was £180,000 - meaning my mortgage amount was £160,000.

My mortgage is 40 years with a 5.04% interest rate which isn't very good - fixed for 2 years and up for renewal circa November 2024.

I have been able to save approx. £1,000 per month since moving in, and my initial idea was to pay as much of my HTB Loan as possible after 5 years.

As mortgage rates are coming down, I hope to get a new 2 or 5 year fixed rate at the end of the year hopefully around the 3 / 3.5% mark if they continue to drop - fingers crossed - so my monthly repayments will be a lot lower meaning I can put more into my savings.

Question - do you think it would be wise for me to use my additional savings every month to pay as much of my mortgage off as I possibly can by the 5 year mark? My rationale for this is because the interest rate on my HTB Loan at Year 6 will still be significantly lower than my mortgage interest rate - so the more I have paid off the mortgage the better?

I may also come into some inheritance so I was thinking of maybe using this to pay off as much of the mortgage as I can by the 5 year mark? And then start paying my HTB Loan from the point of Year 6?

What are your thoughts? Many thanks in advance.

K_S

Kmb22 said:

Hi,

please could anyone shed some light on the underwriter process. We are first time buyers, we have a decision in principle from NatWest, we have asked been asked to provide our bank statements. For the last 3 months , I would say six months maybe more I’ve been out helping my Daughter out furnished a new flat and buying stuff for my new grandchild so my bank statements look like I spend all of my wages. But I never go into an overdraft and all my bales are paid on time and my credit rating is very good. Well my mortgage application be declined at this point, my partner hardly spend anything please could anyone shed any light on this as it’s keeping me awake at night. Thank you 

@kmb22 Generally speaking, mainstream lenders (like NatWest) do not care about discretionary expinditure of the kind you have mentioned. All they are looking for in bank statements are pay coming in and regular financial commitments such as debt payments, monthly direct debits, etc. that haven't been declared as commitments, and anything concerning such as gambling payments, large cash deposits, etc.

For example, if the applicant has declared no dependents but their bank statement shows school or childcare expenses. Or they spend £400 on petrol every month for their work commute, etc.

So nothing to worry about for you hopefully on that front. Good luck, hope you get your offer soon.

Kmb22

@K_S thank you so much. I have been loosing sleep and stressing so much.

Thank you for putting my mind at ease.

naf123

naf123 said:

Hi

I want to remortgage to a new provider. I got the following two questions

• Please confirm you can still afford your monthly mortgage payment once child tax credit payments stop and explain how it will remain affordable using your application tracking page.

• Please confirm you can still afford your monthly mortgage payment once child benefit payments stop and explain how it will remain affordable using your application tracking page.

What is the best way to answer such questions?  

Thank you!

Really would appreciate any advice on this . thank you! 

jonnydeppiwish!

Hi again @K_S hopefully my last question for you!

We’ve agreed to purchase a property where we we complete a let to buy mortgage (£278k) on current mortgage free property,  and a smaller mortgage on the new property (£167k).

There is a very good chance that we may end up selling the current property though, but we’re not yet at that stage.

Can we apply for the double mortgage now and the only take the second mortgage if we do sell out current property or do we have to apply for a new mortgage? How will that be affected by the credit checks etc?

Thanks in advance!

shep13713

We have been given this update by our solicitor and wondered how long it normally takes for Santander to respond to this kind of question?

The seller’s solicitors have disclosed that the property was previously affected by Knotweed. They have sent over copies of documentation including a guarantee for treatment. The treatment was done in 2015 and the guarantee expires in 2025. I understand your surveyor did not identify any knotweed when surveying the property so hopefully it’s been completely eradicated but we have had to check with the lender to cross reference with their own valuation.

Thank you

K_S

shep13713 said:

We have been given this update by our solicitor and wondered how long it normally takes for Santander to respond to this kind of question?

The seller’s solicitors have disclosed that the property was previously affected by Knotweed. They have sent over copies of documentation including a guarantee for treatment. The treatment was done in 2015 and the guarantee expires in 2025. I understand your surveyor did not identify any knotweed when surveying the property so hopefully it’s been completely eradicated but we have had to check with the lender to cross reference with their own valuation.

Thank you

@shep13713 It's hard to say because this is the route that this kind of post-offer property related query can typically take -
Your sols -> Santander team1 -> Santander underwriter -> 3rd party valuer/surveyor (the one they instructed for the val) -> Santander -> your sols
As you can see, there are a few links involved so how quickly it is reviewed and responded to depends on their availability, how busy they are etc.

FWIW, Santander's mortgage team aren't particularly busy at all at the moment and are turning things around pretty quick, so hopefully it shouldn't be too long before you hear back.