Mortgage broker - ask me anything

K_S

snowqueen555 said:

I have two hard searches in recent months. In Dec-Jan a mortgage application which was approved but I decided not to buy due to structural issues. The second was last month as I opened a First Direct bank account to get the £175. Would these likely provide a problem as I am on the flat hunt again.

@snowqueen555 Generally speaking, it shouldn’t cause issues with a future mortgage app.

JCJC2706

K_S said:

JCJC2706 said:

K_S said:

JCJC2706 said:

Currently have a 90% LTV mortgage application for £480k (with a £48k deposit) in with Natwest. Joint income of £144k.

Previously had £48k debt, but family have kindly offered to pay off £25k of it, leaving £23k. Had missed payments but no defaults - this was back in 2020. We've submitted payslips etc to Natwest and they all have ticks against them and the valuation is tomorrow. They've asked our broker (well, our broker hasn't told us yet, we found out through the online chat) to provide proof that the debts have been paid off. 

Is this a good sign (e.g it wasn't a complete no once they looked over the form etc) or should I not be getting my hopes up just yet?

@JCJC2706

You've passed a DIP (needs to be run before submitting a full application) and your broker will have checked criteria, affordability before going with NatWest. At that point, with a clean (no defaults/CCJs) credit history, with the vast majority of mainstream lenders you're 99% there.

With mainstream lenders, the primary aspects they're looking for beyond that point in the applicant is whether you can evidence the income declared in the application and whether there are any undisclosed commitments in the background.

That's a long winded way to say that you're probably fine and I wouldn't read anything positive/negative in the query raised. I hope that makes sense. Good luck and hope you get to offer soon!

Thanks!! My broker has said that Natwest won't accept screenshots, but some of the statements won't be generated for another 2-3 weeks showing the balance as zero... have you come across any workarounds for this? Cheers

@jcjc2706 If a client has a recently paid off cc balance that needs to be evidenced, the usual workaround is producing the following -

1. the latest issued statement

2. current transaction listing / printout of internet banking home page for the account / screenshot: showing zero balance and paid off amount, with enough info on it to identify it as the same account in no.1

3. Client’s current account statement / transaction listing showing amount paid to cc

I’ve never had an issue with the bank not accepting the above in similar situations, and often just 1+2 also suffices.

Thanks for this. Our mortgage was approved on Thursday, so we’re over the moon. One snag, our solicitor has noticed that the person who Natwest appointed to perform the valuation on the property has noted down the service charge/ground rent wrong - they marked it as £1,000 per year when it is in fact £1,300. 

Our solicitor has gotten in contact with Natwest, is this likely to have an impact on the offer? The solicitor has said it depends on how they assessed the affordability.. we’re hoping that as it’s only an extra £25 per month, it shouldn't right? Thanks!! 

Croesus_IfOnly

Hi All - hoping you can help with a few queries. I’m sure these have been answered before in the 777 pages that precede this one but I couldn’t find when attempting to search. Can you help? 

Circumstance: 5yr fix coming to an end split across 2 products. One ends in Aug, the other in Feb. I’m considering a few options that include:

1) Option 1: PT with current lender now for product ending in Aug. Questions I have are:

1a) Is the rate for the PT based on LTV today rather than what it is projected to be in Aug? Presume it is due to uncertainties on house value etc, and that it applies to the total house valuation as it is today. 
 

1b) If I were to accept a PT now, what would happen when I come to PT the second product in Aug for a product due to start in the Feb? I may be on a different (lower) LTV so this may impact rates available. Again I expect I would have two different rates that reflect market at the time and potentially revised LTV.  

2) Option 2: PT to a temp rate with no ERC and then engage a broker to look at a rate for whole balance in Aug (to start in following Feb). This may be better value in the long run if LTV is likely to be in a lower bracket over next 6 months and I can fish in a wider pool of rates. Would I also at the same time be able to assess a single mortgage product from my current lender as a PT rather than one for each existing product, even where one product is ~18 months out from end date if I had opted for a PT with no ERC? 

Thanks again! 

K_S

JCJC2706 said:

K_S said:

JCJC2706 said:

K_S said:

JCJC2706 said:

Currently have a 90% LTV mortgage application for £480k (with a £48k deposit) in with Natwest. Joint income of £144k.

Previously had £48k debt, but family have kindly offered to pay off £25k of it, leaving £23k. Had missed payments but no defaults - this was back in 2020. We've submitted payslips etc to Natwest and they all have ticks against them and the valuation is tomorrow. They've asked our broker (well, our broker hasn't told us yet, we found out through the online chat) to provide proof that the debts have been paid off. 

Is this a good sign (e.g it wasn't a complete no once they looked over the form etc) or should I not be getting my hopes up just yet?

@JCJC2706

You've passed a DIP (needs to be run before submitting a full application) and your broker will have checked criteria, affordability before going with NatWest. At that point, with a clean (no defaults/CCJs) credit history, with the vast majority of mainstream lenders you're 99% there.

With mainstream lenders, the primary aspects they're looking for beyond that point in the applicant is whether you can evidence the income declared in the application and whether there are any undisclosed commitments in the background.

That's a long winded way to say that you're probably fine and I wouldn't read anything positive/negative in the query raised. I hope that makes sense. Good luck and hope you get to offer soon!

Thanks!! My broker has said that Natwest won't accept screenshots, but some of the statements won't be generated for another 2-3 weeks showing the balance as zero... have you come across any workarounds for this? Cheers

@jcjc2706 If a client has a recently paid off cc balance that needs to be evidenced, the usual workaround is producing the following -

1. the latest issued statement

2. current transaction listing / printout of internet banking home page for the account / screenshot: showing zero balance and paid off amount, with enough info on it to identify it as the same account in no.1

3. Client’s current account statement / transaction listing showing amount paid to cc

I’ve never had an issue with the bank not accepting the above in similar situations, and often just 1+2 also suffices.

Thanks for this. Our mortgage was approved on Thursday, so we’re over the moon. One snag, our solicitor has noticed that the person who Natwest appointed to perform the valuation on the property has noted down the service charge/ground rent wrong - they marked it as £1,000 per year when it is in fact £1,300. 

Our solicitor has gotten in contact with Natwest, is this likely to have an impact on the offer? The solicitor has said it depends on how they assessed the affordability.. we’re hoping that as it’s only an extra £25 per month, it shouldn't right? Thanks!! 

@jcjc2706 Congrats on the offer! You should be fine. Worst case scenario, if you've absolutely maximised borrowing, the amount might go down by a sliver.

K_S

Croesus_IfOnly said:

Hi All - hoping you can help with a few queries. I’m sure these have been answered before in the 777 pages that precede this one but I couldn’t find when attempting to search. Can you help? 

Circumstance: 5yr fix coming to an end split across 2 products. One ends in Aug, the other in Feb. I’m considering a few options that include:

1) Option 1: PT with current lender now for product ending in Aug. Questions I have are:

1a) Is the rate for the PT based on LTV today rather than what it is projected to be in Aug? Presume it is due to uncertainties on house value etc, and that it applies to the total house valuation as it is today. 
 

1b) If I were to accept a PT now, what would happen when I come to PT the second product in Aug for a product due to start in the Feb? I may be on a different (lower) LTV so this may impact rates available. Again I expect I would have two different rates that reflect market at the time and potentially revised LTV.  

2) Option 2: PT to a temp rate with no ERC and then engage a broker to look at a rate for whole balance in Aug (to start in following Feb). This may be better value in the long run if LTV is likely to be in a lower bracket over next 6 months and I can fish in a wider pool of rates. Would I also at the same time be able to assess a single mortgage product from my current lender as a PT rather than one for each existing product, even where one product is ~18 months out from end date if I had opted for a PT with no ERC? 

Thanks again! 

@croesus_IfOnly I'm not sure I fully understand what you're asking but here goes -

1a. Generally speaking, it will based on the LTV on the lender's system as of the date that you submit the PT application.

1b. Yes, it is possible that what you've outlined happens.

1c. PT - yes you can indeed align dates (and 'share' the product fee in some cases if doing a PT on two parts together) but with the vast majority of lenders, once you have 2 mortgage parts, they'll always remain separate until you remortgage away to another lender.

Croesus_IfOnly

K_S said:

Croesus_IfOnly said:

Hi All - hoping you can help with a few queries. I’m sure these have been answered before in the 777 pages that precede this one but I couldn’t find when attempting to search. Can you help? 

Circumstance: 5yr fix coming to an end split across 2 products. One ends in Aug, the other in Feb. I’m considering a few options that include:

1) Option 1: PT with current lender now for product ending in Aug. Questions I have are:

1a) Is the rate for the PT based on LTV today rather than what it is projected to be in Aug? Presume it is due to uncertainties on house value etc, and that it applies to the total house valuation as it is today. 
 

1b) If I were to accept a PT now, what would happen when I come to PT the second product in Aug for a product due to start in the Feb? I may be on a different (lower) LTV so this may impact rates available. Again I expect I would have two different rates that reflect market at the time and potentially revised LTV.  

2) Option 2: PT to a temp rate with no ERC and then engage a broker to look at a rate for whole balance in Aug (to start in following Feb). This may be better value in the long run if LTV is likely to be in a lower bracket over next 6 months and I can fish in a wider pool of rates. Would I also at the same time be able to assess a single mortgage product from my current lender as a PT rather than one for each existing product, even where one product is ~18 months out from end date if I had opted for a PT with no ERC? 

Thanks again! 

@croesus_IfOnly I'm not sure I fully understand what you're asking but here goes -

1a. Generally speaking, it will based on the LTV on the lender's system as of the date that you submit the PT application.

1b. Yes, it is possible that what you've outlined happens.

1c. PT - yes you can indeed align dates (and 'share' the product fee in some cases if doing a PT on two parts together) but with the vast majority of lenders, once you have 2 mortgage parts, they'll always remain separate until you remortgage away to another lender.

Thank you so much for this. It was exactly what we needed. Essentially our decision is to either PT as is when the respective products are up, or go as described and PT to a “temp” product with the intent to merge the products when we can on the second. Food for thought. 

Ian_B_B

silvercar said:

Ian_B_B said:

Hi!  Couple of questions....

1.  What is the lesser of two evils on a mortgage application - loan or credit card debt? Or are they treated the same?

2.  We are coming to the end of our 5 year fixed - we also have a 20% HTB which we are thinking about paying back.  Are brokers likely to have an "all in one" service which incorporates a solcititor / transferring the funds etc.

3.  In terms of general sums - we have a house value to £380k, with an o/s mortgage of £200k, and will want to pay the HTB (£76k) and some o/s debt (£50k).  Are mortgages like that with allow extra money for those reasons available (affordability / credit score is not an issue)...  Thanks!

Why do you want to move the HTB to the mortgage? Interest rates on the HTB are low, probably lower than you will pay on your mortgage.

That is probably a very good point...  Would this be recommended by a broker?  Especially as we are not considering moving for a couple of years...

Ian_B_B

K_S said:

Ian_B_B said:

Hi!  Couple of questions....

1.  What is the lesser of two evils on a mortgage application - loan or credit card debt? Or are they treated the same?

2.  We are coming to the end of our 5 year fixed - we also have a 20% HTB which we are thinking about paying back.  Are brokers likely to have an "all in one" service which incorporates a solcititor / transferring the funds etc.

3.  In terms of general sums - we have a house value to £380k, with an o/s mortgage of £200k, and will want to pay the HTB (£76k) and some o/s debt (£50k).  Are mortgages like that with allow extra money for those reasons available (affordability / credit score is not an issue)...  Thanks!

@ian_B_B Generally speaking -
1. CC debt - is taken as 3-5% (can vary across lenders) of o/s balance as a monthly commitment. So if you have a 10k cc balance (the interest rate is immaterial), lenders will consider it as a £300-500/month outgoing for affordability.
Loan payments - impact is based on the monthly payment. Irrespective of whether your loan is 10k or 5k, if the monthly payment is £500, then that's the monthly outgoing for affordability.
2. As I'm sure you are aware, the whole HTB redemption process involves actions on the part of 4 parties - yourself, HTB, solicitor, broker and lender. If you're asking if there are brokers who will provide a service that takes responsiblity for organising all these people and the actions involved, the answer is probably not.
3. You're looking for a capital raise remortgage at 85% LTV to pay off HTB and 50k o/s unsecured debt. If affordability, credit history, etc. isn't an issue, you should be able to find a mainstream lender for this depending on the specifics.

Thanks K_S...  

Two more questions if ok!!  

If you are going to pay off debt with the mortgage, are they typically removed from the mortgage affordability calculator (as they'll be paid off once the new mortgage is approved)...

Also, to the point that silvercar makes (I'll not consider this legally binding advice), but is it worth, while we are in a high inflationary environment, not paying back the HTB for a couple of years until the interest rates soften?  Especially if we are in no rush to move...

Thanks!

Ian

kingstreet

Ian, you won't be able to borrow to do debt con with the HTB loan left in-situ. The HTB Agent won't agree to it. Some lenders ignore debt being repaid, others don't. A decent broker will know who to avoid in such circumstances.

A broker can give you the facts on repaying or not repaying the HTB loan but won't make a recommendation as such. Much of the decision surrounds property prices. If they are rising, it may make the decision to repay an HTB loan easier. If they are static or falling, the interest rate differential between HTB and mortgage rate is perhaps more relevant.

Ian_B_B

kingstreet said:

Ian, you won't be able to borrow to do debt con with the HTB loan left in-situ. The HTB Agent won't agree to it. Some lenders ignore debt being repaid, others don't. A decent broker will know who to avoid in such circumstances.

A broker can give you the facts on repaying or not repaying the HTB loan but won't make a recommendation as such. Much of the decision surrounds property prices. If they are rising, it may make the decision to repay an HTB loan easier. If they are static or falling, the interest rate differential between HTB and mortgage rate is perhaps more relevant.

Thanks ever so much!  In a fairly generic case like mine - 20% HTB on £340k mortgage, house now worth £400k - £200k left on the mortgage, what would you recommend to a client?  I’m going to speak to a broker, but interested in your views!  Thanks!!