Mortgage broker - ask me anything

fluffyowl

Hi, looking for some advice. Currently have a house with approx £100k mortgage. House worth about £300k. 

Currently single mum, earn £27k a year (was £40k full time). Have got £25k on interest free credit cards. These are starting to come to an end and can’t get any more 0% deals to swap the balances to. Credit rating has gone from good to fair. 

Mortgage is up for renewal in Feb and will obviously go up a bit. Childcare will come down as I will get 30 free hours and wage from Sept will be £32k. 

My plan was to pay down credit cards £300 per month and keep with the same lender but now I can’t get any credit swaps I just don’t know what to do. Options are:

1. Ask current lender for consolidation to mortgage 

2. Get a broker to get a consolidation with any mortgage lender

3. Accept I will need a DMP (won’t be able to pay minimum payments plus interest)

4. I have £4k inheritance unexpectedly left to me, could pay off some credit and hope it allows me more interest free options to juggle. 

What do you think? Is that something a broker/my bank might do? (I realise you can’t guarantee anything). 

Any advice appreciate. 

Thank you. 

SilverSix

We have our offer in place already, with which we need to sell one house to buy our onward. However may choose to keep this house. 

Not selling would require a different offer for our onward (with a different lender for a larger amount) along side another product on the property we wish to keep to raise capital. 

The reason for using a different lender is to keep the very low rate secured earlier this year, should we decide to sell after all.

Our broker advised that there is a unlikely but remote possibility credit checks on the potential two other mortgage applications, might cause us to fail a final check (on our first offer) or the offer be withdrawn before completion, presuming we do sell.

I can see the hard check back in April as part of our application.

I'd be keen to hear your thoughts here and if other mortgage applications with hard/soft checks are likely to cause a problem?

K_S

fluffyowl said:

Hi, looking for some advice. Currently have a house with approx £100k mortgage. House worth about £300k. 

Currently single mum, earn £27k a year (was £40k full time). Have got £25k on interest free credit cards. These are starting to come to an end and can’t get any more 0% deals to swap the balances to. Credit rating has gone from good to fair. 

Mortgage is up for renewal in Feb and will obviously go up a bit. Childcare will come down as I will get 30 free hours and wage from Sept will be £32k. 

My plan was to pay down credit cards £300 per month and keep with the same lender but now I can’t get any credit swaps I just don’t know what to do. Options are:

1. Ask current lender for consolidation to mortgage 

2. Get a broker to get a consolidation with any mortgage lender

3. Accept I will need a DMP (won’t be able to pay minimum payments plus interest)

4. I have £4k inheritance unexpectedly left to me, could pay off some credit and hope it allows me more interest free options to juggle. 

What do you think? Is that something a broker/my bank might do? (I realise you can’t guarantee anything). 

Any advice appreciate. 

Thank you. 

@fluffyowl I'm assuming that you will be applying only once you can prove a permanent PAYE income of 32k and zero childcare costs. 

What you are looking for is essentially a capital raise remortgage for debt-consolidation. The exact outcome for a specific lender (your current one or another) will depend on the specific lender's policies and affordability calculations.

In your case you need a lender that ticks all the following boxes -
- for affordability calcs, will ignore the 25k being consolidated (with debt consolidation, not all lenders will)
- based on your numbers, will lend the 125k that you need

The numbers look tight tbh but hopefully you can get the outcome you need.

Given that you are less than 3 months from September, if you can prove (usually employer letter, contract, etc.) that your income will be 32k from xxx date, some lenders might be able to ignore the current childcare costs and take the upcoming higher income to offer a remortgage. You could follow options 1 and 2 in parallel.

All the best!

K_S

SilverSix said:

We have our offer in place already, with which we need to sell one house to buy our onward. However may choose to keep this house. 

Not selling would require a different offer for our onward (with a different lender for a larger amount) along side another product on the property we wish to keep to raise capital. 

The reason for using a different lender is to keep the very low rate secured earlier this year, should we decide to sell after all.

Our broker advised that there is a unlikely but remote possibility credit checks on the potential two other mortgage applications, might cause us to fail a final check (on our first offer) or the offer be withdrawn before completion, presuming we do sell.

I can see the hard check back in April as part of our application.

I'd be keen to hear your thoughts here and if other mortgage applications with hard/soft checks are likely to cause a problem?

@silversix To a client, I would characterise it similarly to how your broker did - unlikely, remote possibility

FarlM

I was wondering if anyone could give advice on whether it is best to use a mortgage broker or to 'do it yourself' when porting a mortgage?

I've currently got a mortgage with Co-op Bank which I'm hoping to port to my next house. I called Co-op and managed to arrange an appointment with one of their advisors in 3 weeks time, but they advised that the whole process could take between 12-16 weeks from starting the application. I wasn't sure whether this is likely to be the same if using a mortgage broker or if it could potentially go through any quicker, and what the general advice would be for using a broker or not when porting?

I'm adding my partner to the mortgage but otherwise not changing the amount of borrowing or the term, so I'm hoping it should be relatively straightforward?

K_S

FarlM said:

I was wondering if anyone could give advice on whether it is best to use a mortgage broker or to 'do it yourself' when porting a mortgage?

I've currently got a mortgage with Co-op Bank which I'm hoping to port to my next house. I called Co-op and managed to arrange an appointment with one of their advisors in 3 weeks time, but they advised that the whole process could take between 12-16 weeks from starting the application. I wasn't sure whether this is likely to be the same if using a mortgage broker or if it could potentially go through any quicker, and what the general advice would be for using a broker or not when porting?

I'm adding my partner to the mortgage but otherwise not changing the amount of borrowing or the term, so I'm hoping it should be relatively straightforward?

@farlM I don't have any general advice on whether or not to use a broker when porting as it depends on you, the specifics of the case, the specific lender's porting process and how good/bad the broker is.

If it's a shi*e lender (Platform often falls in that category) and you have a good competent broker that you've used before then it might be a smoother process going through a broker. Otoh, if your lender has a slick fully online process that offers a non-advised port, and you'd be starting with a new broker from scratch, then it might be better to go direct.

Timelines wise, I can't imagine why a port would take that long to go to offer but nothing would surprise me with Platform. At the very least, you could cut 3 weeks off the initial appt wait by going to a broker. All the best!

FarlM

@K_S Thanks, yes I was surprised when they advised 12 - 16 weeks, but then the amount of time it took to even get through to them on the phone to book the appointment didn't fill me with much confidence! We have a broker in mind that we were thinking of using if required, so it sounds like it might be worth using them if it could cut a few weeks off.

rwarren10

Hi, wondering if someone could give me advice.

Basically we own our house outright (left in a will from grandparents). It is a small 2 bed bungalow and as our family is growing, we need to extend the house.

We are looking at a sizeable extension (basically building an extension the size of another house) as we want this to be our forever home. Planning permission and building control is passed.

Unfortunately I don't know the current value of the house - it was valued at 90k years ago (I'm guessing early 2000's), so I am sure that has increased significantly. We have had a costing expert look at the plans and visit the house and he has estimated the home extension at 190k.

My feeling is the house is not worth 190k so what way does that leave us? If we get the house valued at say 150k for example, does that leave us 40k short or maybe even more if lenders only give us 90% LTV ?

The thing is, we have a good household salary combined so if we were to go to market to buy a new house we could afford one alot higher than 190k, will this be taken into account ? Instead of releasing equity from the house could we just go for a self build mortgage based on our salaries ? Or if we use all the equity in our house, do we still require a cash deposit ? Can we use the house as collateral?

Would the wee next step for us be to get a valuation on the house as it currently sits and take it from there ? Sorry for so many questions.

Thanks

K_S

@rwarren10 A few quick mortgage related comments -

- with mainstream mortgage lending, if you need to do a capital-raise remortgage on your currently mortgage-free house for the purpose of an extension, generally speaking the most you can release is up to 85-90% of the current value of the property. So if it’s worth 150k today, you could potentially release up to 125-135k.

- unless the property is absolutely unique or in a very rural area, getting an approx estimated value on it is probably not going to be too difficult to do online.

- yes you could potentially get a self build mortgage but there are a few too many permutations and combinations to be able to cover on here. Trying nosing about on the build hub form, build store website, etc.

rwarren10 said:

Hi, wondering if someone could give me advice.

Basically we own our house outright (left in a will from grandparents). It is a small 2 bed bungalow and as our family is growing, we need to extend the house.

We are looking at a sizeable extension (basically building an extension the size of another house) as we want this to be our forever home. Planning permission and building control is passed.

Unfortunately I don't know the current value of the house - it was valued at 90k years ago (I'm guessing early 2000's), so I am sure that has increased significantly. We have had a costing expert look at the plans and visit the house and he has estimated the home extension at 190k.

My feeling is the house is not worth 190k so what way does that leave us? If we get the house valued at say 150k for example, does that leave us 40k short or maybe even more if lenders only give us 90% LTV ?

The thing is, we have a good household salary combined so if we were to go to market to buy a new house we could afford one alot higher than 190k, will this be taken into account ? Instead of releasing equity from the house could we just go for a self build mortgage based on our salaries ? Or if we use all the equity in our house, do we still require a cash deposit ? Can we use the house as collateral?

Would the wee next step for us be to get a valuation on the house as it currently sits and take it from there ? Sorry for so many questions.

Thanks

SilverSix

In your experience, how long should it take a lender to respond to an enquiry? (Santander)

Lower chain requested comment on a Deed of Variation relating to leasehold over a week ago. 

This is quite straight forward, an indemnity is usually (and should be in this case) be acceptable and has been offered.