Mortgage broker - ask me anything

theonenonly

K_S said:

theonenonly said:

Bit of an odd one from me: partner is currently on maternity, and we've applied for DIP on her salary pre maternity, on the understanding that she'll go back on same pay.

However, she's actually getting a payrise once she goes back. What evidence would we need to provide of this payrise: is confirmation via document from her employer enough?

Or would she need to provide proof via payslips? Which means waiting until she's gone back to work, and working until payslips come through.

@theonenonly Depends on the lender (as policy differs on future pay rises) and whether or not you need the pay rise to meet affordability for the number you’re aiming for.

Also when running a DIP do remember to factor in an extra dependent and expected childcare costs (if any) when she goes back to work.

So we currently have a figure by Nationwide HH minus the pay increase, but feel the pay increase factored in will bump up our lending amount giving us more options on properties for consideration. 

Would you happen to know Nationwide's policy on this matter?

K_S

theonenonly said:

K_S said:

theonenonly said:

Bit of an odd one from me: partner is currently on maternity, and we've applied for DIP on her salary pre maternity, on the understanding that she'll go back on same pay.

However, she's actually getting a payrise once she goes back. What evidence would we need to provide of this payrise: is confirmation via document from her employer enough?

Or would she need to provide proof via payslips? Which means waiting until she's gone back to work, and working until payslips come through.

@theonenonly Depends on the lender (as policy differs on future pay rises) and whether or not you need the pay rise to meet affordability for the number you’re aiming for.

Also when running a DIP do remember to factor in an extra dependent and expected childcare costs (if any) when she goes back to work.

So we currently have a figure by Nationwide HH minus the pay increase, but feel the pay increase factored in will bump up our lending amount giving us more options on properties for consideration. 

Would you happen to know Nationwide's policy on this matter?

@theonenonly Couldn’t say for sure but off the top of my head, I think they may potentially consider future pay rises within x months of FMA and some form of employer confirmation. Not entirely sure how that would interact with mat leave, rtw date, etc. though.

Dig through the criteria pages, you might find something that fits your situation.
https://www.nationwide-intermediary.co.uk/lending-criteria/a-z 

Or else just speak to Nationwide, you’ll get the authoritative answer to your specific question.

Aqua1985

Just been accepted for a DIP with accord at a 5X multiplier of income so happy (via a broker) . Question for Brokers - what are they like how fussy etc are they for issuing full mortgage offers (assuming we have been honest for all figs on dip which we have)? 

K_S

Aqua1985 said:

Just been accepted for a DIP with accord at a 5X multiplier of income so happy (via a broker) . Question for Brokers - what are they like how fussy etc are they for issuing full mortgage offers (assuming we have been honest for all figs on dip which we have)? 

@Aqua1985 Assuming the DIP has been filled in correctly and as per criteria (or any unclear criteria points have been clarified with the Accord BDM) a positive DIP is as much assurance as you can get at this stage.

I rate Accord highly as a lender, they’re pretty good with exhibiting common sense to help the case fit when it comes to strong applications / high income cases / professionals / contractors / large loans etc.

A couple of examples are - considering income of an applicant on FTC even though she had a large gap before the current role, considering a single year bonus for income (usually want a 2 year track record), ignoring XL sized salary sacrificed contributions (high income contractor sal sacrificing pension down to min wage) etc. 

Common sense can work both ways though. The one time for me they dialled down the max borrowing post DIP was a homemover client with high levels of background debt that they had declared would be paid off from equity but Accord remodelled affordability at FMA to assume the debt would remain.

bjones43

Our 5 yr fix finishes next year (July 25'). We borrowed £100k on a 15yr mortgage, and will have circa £67k left to pay. My wife has become self employed so looking at ways to cut down on our monthly bills. Would we be eligible for an interest only mortgage when we remortgage? Our LTV is very low, and we own a property abroad outright that would cover the loan. Is there a minimum income you also need to show? 

K_S

bjones43 said:

Our 5 yr fix finishes next year (July 25'). We borrowed £100k on a 15yr mortgage, and will have circa £67k left to pay. My wife has become self employed so looking at ways to cut down on our monthly bills. Would we be eligible for an interest only mortgage when we remortgage? Our LTV is very low, and we own a property abroad outright that would cover the loan. Is there a minimum income you also need to show? 

@bjones43 Wrt to mainstream I/O lending, the property overseas is unlikely to be relevant.

If you're sub 50% LTV, you may have options to switch to I/O with repayment based on downsizing (sale of mortgaged property). Alternatively, if you have around 90k+ in investments (stocks and shares ISA for example) that could potentially be used as well.

The specific criteria will differ based on the lender but will usually revolve around a combination of the following - LTV at application, equity, value of property, region, min income (will vary across lenders and repayment vehicle), age, suitability of repayment vehicle, etc.

bjones43

K_S Thank you for the info. 
The LTV is currently about 3.5%, if we need to add more when remortgaging it would be around 6%, so hopefully the downsizing would be enough to allow a I/O mortgage.
The house abroad is in the Channel Islands, I was just hoping that could be used as proof that the loan would be repaid and it was low risk. It's useful to know that this isn't relevant.

K_S

bjones43 said:

K_S Thank you for the info. 
The LTV is currently about 3.5%, if we need to add more when remortgaging it would be around 6%, so hopefully the downsizing would be enough to allow a I/O mortgage.
The house abroad is in the Channel Islands, I was just hoping that could be used as proof that the loan would be repaid and it was low risk. It's useful to know that this isn't relevant.

@bjones43 Based on the LTV it looks like a high value property so you have plenty of equity in it which should tick off the minimum £ equity requirement for most lenders.

As long as you have a provable income sufficient to meet affordability (as per lender calcs) for the amount you need, it should be fairly straightforward to remortgage to interest only with downsizing as the repayment vehicle.

jen_fpb

Did try a separate post a while back but hoping you can help explain/clarify.

We are currently looking at an offset mortgage. We will end our current "deal" early and move to an offset as financially it works out better. ERC on current deal would be about £500.

We are offsetting as we are able to 100% offset. We have £59,300 mortgage and have enough to 100% offset so we will have an 0% interest rate.

We have seen one 5 year offset that has unlimited overpayment but still has an ERC of 

5% reducing to 2% gradually over the 5 years. The mortgage allows unlimited (99.9%) overpayments.

This example is with Yorkshire Building Society.

There is a chance through inheritance possibly coming that we could overpay a HUGE chunk of the mortgage in say 2 to 3 years time (5 year deal). What would happen if we reduced this to say £5,000 and we still have 2 years left. We wouldn't want an ERC would we just pay £5,000 divided by the remaining term? And end up with small monthly payments?

It does have an exit fee, what's this?

silvercar

jen_fpb said:

Did try a separate post a while back but hoping you can help explain/clarify.

We are currently looking at an offset mortgage. We will end our current "deal" early and move to an offset as financially it works out better. ERC on current deal would be about £500.

We are offsetting as we are able to 100% offset. We have £59,300 mortgage and have enough to 100% offset so we will have an 0% interest rate.

We have seen one 5 year offset that has unlimited overpayment but still has an ERC of 

5% reducing to 2% gradually over the 5 years. The mortgage allows unlimited (99.9%) overpayments.

This example is with Yorkshire Building Society.

There is a chance through inheritance possibly coming that we could overpay a HUGE chunk of the mortgage in say 2 to 3 years time (5 year deal). What would happen if we reduced this to say £5,000 and we still have 2 years left. We wouldn't want an ERC would we just pay £5,000 divided by the remaining term? And end up with small monthly payments?

It does have an exit fee, what's this?

Logically, with the mortgage completely offset, so 0% interest, you’d invest your inheritance elsewhere. At least until you have no ERC to pay.