Mortgage broker - ask me anything

IAMIAM

Hi,

Why is £750 cash back advertised for HSBC remortgages on MSE Best Buys and Money Supermarket Best Buys, but not advertised on HSBC Website for direct applicants or on the Intermediaries Website for brokers....where is this cashback?!

K_S

IAMIAM said:

Hi,

Why is £750 cash back advertised for HSBC remortgages on MSE Best Buys and Money Supermarket Best Buys, but not advertised on HSBC Website for direct applicants or on the Intermediaries Website for brokers....where is this cashback?!

@iamiam Don't know off of the top of my head but from the quantum of the cashback, if I had to guess, it's probably a green product or an exclusive product. Or it's just the sourcing system showing something erroneous.

bell2020

silvercar said:

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.

The house is in his name, yes. He’s well aware of the tax implications - he’s a builder and has a financial advisor that deals with everything. 

We don’t live rent free - we’ve always paid him monthly rent. 

If he paid us for the work/materials, would we still need to provide proof of that payment like you do with a gifted deposit? Don’t want to go down that route if it opens up more difficult doors 🤦🏽‍♀️

bell2020

K_S said:

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!

That’s what we’ve considered but we’re already at 85% ltv so can’t really go much higher than that. Mortgage advisor says it’ll be harder to get through if we did 90% 

andykennedy83

Hi,

I want to be ready for when I make my application for a holiday let mortgage, from what I’m reading I need a financial projection letter..! 

Does anyone know where I would be able to get this from and someone reputable that the lender will agree with.

Im new to all this and they may not even ask for it but I'm trying to be in the best position!

silvercar

bell2020 said:

silvercar said:

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.

The house is in his name, yes. He’s well aware of the tax implications - he’s a builder and has a financial advisor that deals with everything. 

We don’t live rent free - we’ve always paid him monthly rent. 

If he paid us for the work/materials, would we still need to provide proof of that payment like you do with a gifted deposit? Don’t want to go down that route if it opens up more difficult doors 🤦🏽‍♀️

If he’s paying you for work, that is income that should be declared to the tax man. Reimbursing you for expenses, is just that. I doubt a broker would be interested - if I do shopping for an elderly neighbour and they pay me back it’s not of concern. Same here expect the numbers are bigger. “I put the purchases on my credit card to get some cash back/ points/ air miles, and he reimbursed me”.

“ We don’t live rent free - we’ve always paid him monthly rent” He’s effectively returning to you the rent he charged ie he squirrelled it away to force you to save for a deposit. If you can show the money coming in and going out of your bank account, then it should be fine. But you never can tell what is required.

silvercar

andykennedy83 said:

Hi,

I want to be ready for when I make my application for a holiday let mortgage, from what I’m reading I need a financial projection letter..! 

Does anyone know where I would be able to get this from and someone reputable that the lender will agree with.

Im new to all this and they may not even ask for it but I'm trying to be in the best position!

my take on it would be either see a business banking advisor, who may offer such a service, use an online website that creates a business plan or see an accountant.

kingstreet

IAMIAM said:

Hi,

Why is £750 cash back advertised for HSBC remortgages on MSE Best Buys and Money Supermarket Best Buys, but not advertised on HSBC Website for direct applicants or on the Intermediaries Website for brokers....where is this cashback?!

HSBC has EEH products for energy efficient homes and they have cashbacks of £750 upto £1,600 depending on type of borrower and fixed rate period. As an existing borrower doing a PT/FA those wouldn't impact you?

Purejaz

My fixed rate mortgage deal is ending fairly soon.

I am looking around and a few other companies are offering better rates.

By default i know i can renew with my current provider fairly easily. However, if i applied with another lender but say they valued my house lower (pushing me to a higher LTV). Will it impact my ability to retain a mortgage with my existing lender?

K_S

Purejaz said:

My fixed rate mortgage deal is ending fairly soon.

I am looking around and a few other companies are offering better rates.

By default i know i can renew with my current provider fairly easily. However, if i applied with another lender but say they valued my house lower (pushing me to a higher LTV). Will it impact my ability to retain a mortgage with my existing lender?

@purejaz No, it will not impact the product-switch options presented to you by your current lender.

Generally speaking, your current lender will use an automated indexed valuation which you should be able to see on your online login. This indexed valuation is unrelated to the outcome of a valuation done by another lender.