Mortgage broker - ask me anything

TheLuckiest

Hello! 
We are looking into purchasing a property which has a self contained detached annexe which is effectively a one bedroom detached cottage. 

I've seen a number of threads over the years that this can be problematic for lenders so I do plan on trying to find a reputable local broker. However, I wondered if anyone here had any advice?

The cottage is on the same deeds as the main property but has separate council tax banding.

I've read that nationwide is often a good bet for this kind of property. Our current lender is Santander.

Thanks in advance.

K_S

TheLuckiest said:

Hello! 
We are looking into purchasing a property which has a self contained detached annexe which is effectively a one bedroom detached cottage. 

I've seen a number of threads over the years that this can be problematic for lenders so I do plan on trying to find a reputable local broker. However, I wondered if anyone here had any advice?

The cottage is on the same deeds as the main property but has separate council tax banding.

I've read that nationwide is often a good bet for this kind of property. Our current lender is Santander.

Thanks in advance.

@theluckiest Every annexe/outbuilding case is different and with a fully detached annex with separate access/address/utilities your options will be less than what it would be if the annexe were attached.

Unfortunately, no broker or lender will be able to give you a cast-iron pre-guarantee that they will accept it, it will always be subject to valuer comments.

The only advice I would give is to make sure you/broker run the property past the lender in detail prior to making a full application, for example using a pre-valuation enquiry like this https://www.nationwide-intermediary.co.uk/-/media/NFI/documents/db62-pre-valuation-property-form.pdf or speaking to the BDM and asking them to run it past their team.

All the best!

homeless9

When you agree a new deal it basis it on what you owe at that point in time....but you might have 6 or less monthly payments to go before that new deal starts, so what you owe will reduce before it renews...

How do lenders adjust for this.... do they actually end up basing the new deal on the actual amount you owe at the time the new deal kicks in? therefore lowering the monthly payments?

I understand we are talking about a small decrease in monthly payments, for me it would be £2 less, but I am curious how it works. Thanks.

kingstreet

Yes. It's based on the balance at the time the old rate ends and the new rate starts.

zAndy1

If a tracker is currently only £9pm more than a 2yr fix (both fee free product switches) would you say the tracker is the wisest choice given rates are probably going to fall this year which will make the tracker cheaper than the fixed rate? I'm leaning towards switching to the tracker but debating whether that's wise given labour are in power and anything could happen...

bell2020

hello, 

Sorry if this is long, I’ve tried to simplify it.

we are FTB, living in a house that my father in law built and my husband “helped” (carried bricks, swept etc) and we also put quite a bit of money into the house too, such as paying the plasterer, roof trusses, paying for materials and paint etc. The house is due to go on the market next week as my father in law wants to get rid of “assets”, he’s gifting us 25k for a deposit and said once the house sells he’ll also refund the money we put into the house. 

Now the stumbling block - he’s signed a gifted deposit form. However he’s point blank refusing to provide any documentation for proof of funds. He’s told the estate agent he won’t do it and told us. Our solicitors won’t proceed until they have it. And we can’t submit our mortgage application to NatWest (we have a DIP, and my grandad is also gifting 15k which he has provided everything for). 

We can’t see a way round this if he’s refusing to comfy with money laundering regulations and provide bank statements. 

My husband and I are wondering if he did it the other way around - basically did the “refund” for the works we put in and just paid it to us. And then we used that money as our deposit. Is this possible? Is there any declaration or tax implications? We obviously won’t do anything dodgy but equally need to find a way round this. My father in law is a very difficult person to deal with. It’s a case of us not being able to buy a house otherwise. 

Thanks in advance 

silvercar

bell2020 said:

hello, 

Sorry if this is long, I’ve tried to simplify it.

we are FTB, living in a house that my father in law built and my husband “helped” (carried bricks, swept etc) and we also put quite a bit of money into the house too, such as paying the plasterer, roof trusses, paying for materials and paint etc. The house is due to go on the market next week as my father in law wants to get rid of “assets”, he’s gifting us 25k for a deposit and said once the house sells he’ll also refund the money we put into the house. 

Now the stumbling block - he’s signed a gifted deposit form. However he’s point blank refusing to provide any documentation for proof of funds. He’s told the estate agent he won’t do it and told us. Our solicitors won’t proceed until they have it. And we can’t submit our mortgage application to NatWest (we have a DIP, and my grandad is also gifting 15k which he has provided everything for). 

We can’t see a way round this if he’s refusing to comfy with money laundering regulations and provide bank statements. 

My husband and I are wondering if he did it the other way around - basically did the “refund” for the works we put in and just paid it to us. And then we used that money as our deposit. Is this possible? Is there any declaration or tax implications? We obviously won’t do anything dodgy but equally need to find a way round this. My father in law is a very difficult person to deal with. It’s a case of us not being able to buy a house otherwise. 

Thanks in advance 

Presumably the house is in your FiL’s name, so you maintain your FTB status? I hope he’s considered the profit on the sale and how he can declare that to hmrc!

If he’s refusing to comply with AML regs then the only thing to do is transfer everything into your names as soon as possible and declare it all as savings you have made by living rent free for a while. How long the money needs to be in your accounts varies between solicitors. Whether your solicitor is prepared to rip up the gifted deposit letter and accept the savings as yours is debatable, you may need to start again with a new solicitor.

K_S

zAndy1 said:

If a tracker is currently only £9pm more than a 2yr fix (both fee free product switches) would you say the tracker is the wisest choice given rates are probably going to fall this year which will make the tracker cheaper than the fixed rate? I'm leaning towards switching to the tracker but debating whether that's wise given labour are in power and anything could happen...

@zAndy1 Depends entirely on your preferences, financial situation and desire for certainty.

If the difference in monthly payment is only £9 a month, I'm assuming your mortgage is relatively small (15-20k?) and whatever decision you take, and whatever happens to rates in the next 2 years, is unlikely to make a material difference to your financial situation or well-being. So you could pretty much do whatever you wanted.

If, on the other hand, a £10-£30 difference in monthly payment is financially significant, then you might prefer the certainty of a fix.

Predicting rates - who knows. Over the past 20 years, I didn't expect rates to go as low as they did and stay there for as long as they did, and I didn't expect rates to jump up as quickly as they did, go as high as they did and stay there for this long.

K_S

bell2020 said:

hello, 

Sorry if this is long, I’ve tried to simplify it.

we are FTB, living in a house that my father in law built and my husband “helped” (carried bricks, swept etc) and we also put quite a bit of money into the house too, such as paying the plasterer, roof trusses, paying for materials and paint etc. The house is due to go on the market next week as my father in law wants to get rid of “assets”, he’s gifting us 25k for a deposit and said once the house sells he’ll also refund the money we put into the house. 

Now the stumbling block - he’s signed a gifted deposit form. However he’s point blank refusing to provide any documentation for proof of funds. He’s told the estate agent he won’t do it and told us. Our solicitors won’t proceed until they have it. And we can’t submit our mortgage application to NatWest (we have a DIP, and my grandad is also gifting 15k which he has provided everything for). 

We can’t see a way round this if he’s refusing to comfy with money laundering regulations and provide bank statements. 

My husband and I are wondering if he did it the other way around - basically did the “refund” for the works we put in and just paid it to us. And then we used that money as our deposit. Is this possible? Is there any declaration or tax implications? We obviously won’t do anything dodgy but equally need to find a way round this. My father in law is a very difficult person to deal with. It’s a case of us not being able to buy a house otherwise. 

Thanks in advance 

@bell2020 I can't comment on how to circumvent AML checks.

But generally speaking, in comparable situations, what some clients appear to have done is take out a mortgage with the smallest provable deposit they can, use the gift to make overpayments and then remortgage at a lower LTV at a later point in time.

All the best, I hope it works out one way or the other!

IAMIAM

Hi,

I am doing a rate switch with additional borrowing with HSBC for 1st July 2025.

My rate switch application I have done as normal separately, and the valuation is 20k more on the system than 2 years ago. All gone through, fee added to balance and effective 1st July 2025.

Same day....My additional borrowing application has the same property value as 2 years ago and has asked me to pick a different rate. How can this be? I originally picked the same rate and didn't add the fee, as presume they will only charge me once...

The extra borrowing has also auto cancelled and said advice needed, lending into retirement? My main mortgage is 35 years and additional borrowing is 30 years. So that doesn't make sense either.

Whats the solution?