Mortgage broker - ask me anything

LilSmiler

Thanks for the reply @K_S - it's appreciated

Charlottec5779

Hi 

I'm not sure if someone can advise with regards to mortgage affordability. 

Myself and my partner are looking at buying our first house together he already owns a house which he will be selling and using the equity for the deposit but I however will be a first time buyer. At the moment I have a car on pcp and a loan of £11k which as if today will be paid off in 3 years. At the moment I am over paying on the loan by an additional £700 to £1k a month to reduce the loan term. My question is as mortgage applications are calculated on affordability should I stop making overpayments on the loan until after the mortgage application has been approved or am I OK to carry on making the over payments without this effecting our borrowing amount and chances of being offered a mortgage? 

Any advice any one could offer would be greatly appreciated 

Thanks 
Charlotte 

K_S

@Charlottec5779 Generally speaking, with respect to a PCP payment and the personal loan, the impact that these debts have on mortgage affordability is based on the minimum monthly payment that you are required to make. If you look at your credit report, this amount will be specified against the entry for the loan. The outstanding balance, what overpayment you choose to make, etc. should not impact the mortgage affordability calculation in the vast majority of cases.

Having said that, from the point of view of minimising queries and to-and-fro during the assessment/underwriting process, the fewer large regular payments that are seen leaving your bank account, the better.

Charlottec5779 said:

Hi 

I'm not sure if someone can advise with regards to mortgage affordability. 

Myself and my partner are looking at buying our first house together he already owns a house which he will be selling and using the equity for the deposit but I however will be a first time buyer. At the moment I have a car on pcp and a loan of £11k which as if today will be paid off in 3 years. At the moment I am over paying on the loan by an additional £700 to £1k a month to reduce the loan term. My question is as mortgage applications are calculated on affordability should I stop making overpayments on the loan until after the mortgage application has been approved or am I OK to carry on making the over payments without this effecting our borrowing amount and chances of being offered a mortgage? 

Any advice any one could offer would be greatly appreciated 

Thanks 
Charlotte 

k4y84

Will an EPC cause a delay? I've had my offer accepted on a property on Wednesday and it was listing as having an EPC rating of C70. I have already instructed my solicitor. But I've since discovered by looking on the GOV website, that the EPC expired in 2018. I've contacted the sellers agent agent and I am awaiting a response but if there isn't a new one provided before exchange or completion will this hols things up?

kingstreet

k4y84 said:

Will an EPC cause a delay? I've had my offer accepted on a property on Wednesday and it was listing as having an EPC rating of C70. I have already instructed my solicitor. But I've since discovered by looking on the GOV website, that the EPC expired in 2018. I've contacted the sellers agent agent and I am awaiting a response but if there isn't a new one provided before exchange or completion will this hols things up?

Is this a residential, or buy to let purchase?

It shouldn't in the case of the former and it may in the case of the latter.

k4y84

kingstreet said:

k4y84 said:

Will an EPC cause a delay? I've had my offer accepted on a property on Wednesday and it was listing as having an EPC rating of C70. I have already instructed my solicitor. But I've since discovered by looking on the GOV website, that the EPC expired in 2018. I've contacted the sellers agent agent and I am awaiting a response but if there isn't a new one provided before exchange or completion will this hols things up?

Is this a residential, or buy to let purchase?

It shouldn't in the case of the former and it may in the case of the latter.

Residental. I got a reply from the estate agent saying they will get one done.

bell2020

Hello

we have just been declined by NatWest. Due to “adverse credit history” ….. I had a DMP with them that finished in 2016. Only other adverse is AP markers/default from 2021 that’s mail order and settled. 

Broker is struggling to narrow down a lender due to our many factors -

85% ltv….
£265k purchase price…
£40k gifted deposit…
Income 1 49k…
income 2 8k but fixed term until Aug. I only started November. Was studying with Ou and SAHM/maternity before that for 1 yr….
Plus CA, DLA, UC, CHB approx 20k…
loans outstanding which obvs affects affordability…..
Settled default from mail order from 2021 less than £500

do you think we need a specialist lender for this?  It feels extreme when what’s on my credit file is only mail order for less than £500 and it was settled 4 years ago. 

Each lender we’ve looked at either doesn’t accept one of the factors listed above or won’t lend the 225k we’re looking for 😭 feel so stressed. Solicitors are waiting on this now 😔

I feel like the property is slipping away from us and the property we live in is potentially sold (offer made today) 

thanks 

K_S

@bell2020 It's hard to say. As you correctly point out, there are so many moving parts in your case, it's hard to give a useful opinion.

Affordability is probably tight, if it wasn't then you'd probably have a slightly wider set of options.

Among all the high-street lenders, NatWest is particularly bad at holding a grudge for a past (even past 6 years) issue with an RBS group company so that was a long shot anyway.

Only general comment I'd make is to make sure your broker has checked the few mainstream-ish options there are for borderline credit issues - Accord Cascade, Atom near-prime, Leeds reach, etc.

No idea whether the rest of criteria/affordability matches, but generally speaking Accord Cascade is an excellent product, and has saved many of my clients from having to go full-specialist.

All the best, hope your broker is able to find a solution that works for you!

bell2020 said:

Hello

we have just been declined by NatWest. Due to “adverse credit history” ….. I had a DMP with them that finished in 2016. Only other adverse is AP markers/default from 2021 that’s mail order and settled. 

Broker is struggling to narrow down a lender due to our many factors -

85% ltv….
£265k purchase price…
£40k gifted deposit…
Income 1 49k…
income 2 8k but fixed term until Aug. I only started November. Was studying with Ou and SAHM/maternity before that for 1 yr….
Plus CA, DLA, UC, CHB approx 20k…
loans outstanding which obvs affects affordability…..
Settled default from mail order from 2021 less than £500

do you think we need a specialist lender for this?  It feels extreme when what’s on my credit file is only mail order for less than £500 and it was settled 4 years ago. 

Each lender we’ve looked at either doesn’t accept one of the factors listed above or won’t lend the 225k we’re looking for 😭 feel so stressed. Solicitors are waiting on this now 😔

I feel like the property is slipping away from us and the property we live in is potentially sold (offer made today) 

thanks 

bell2020

K_S said:

@bell2020 It's hard to say. As you correctly point out, there are so many moving parts in your case, it's hard to give a useful opinion.

Affordability is probably tight, if it wasn't then you'd probably have a slightly wider set of options.

Among all the high-street lenders, NatWest is particularly bad at holding a grudge for a past (even past 6 years) issue with an RBS group company so that was a long shot anyway.

Only general comment I'd make is to make sure your broker has checked the few mainstream-ish options there are for borderline credit issues - Accord Cascade, Atom near-prime, Leeds reach, etc.

No idea whether the rest of criteria/affordability matches, but generally speaking Accord Cascade is an excellent product, and has saved many of my clients from having to go full-specialist.

All the best, hope your broker is able to find a solution that works for you!

bell2020 said:

Hello

we have just been declined by NatWest. Due to “adverse credit history” ….. I had a DMP with them that finished in 2016. Only other adverse is AP markers/default from 2021 that’s mail order and settled. 

Broker is struggling to narrow down a lender due to our many factors -

85% ltv….
£265k purchase price…
£40k gifted deposit…
Income 1 49k…
income 2 8k but fixed term until Aug. I only started November. Was studying with Ou and SAHM/maternity before that for 1 yr….
Plus CA, DLA, UC, CHB approx 20k…
loans outstanding which obvs affects affordability…..
Settled default from mail order from 2021 less than £500

do you think we need a specialist lender for this?  It feels extreme when what’s on my credit file is only mail order for less than £500 and it was settled 4 years ago. 

Each lender we’ve looked at either doesn’t accept one of the factors listed above or won’t lend the 225k we’re looking for 😭 feel so stressed. Solicitors are waiting on this now 😔

I feel like the property is slipping away from us and the property we live in is potentially sold (offer made today) 

thanks 

Thank you. Yes she says she has a list of 10 lenders that’ll accept the benefit income and be fine with the mail order default. She just needs to speak to them to do a pre check and check affordability. She says our affordability is okay however when I do the checks on the websites it’s not showing we are. She’s checking co-op and hsbc at the moment. 

Trying my best to trust the process and allow her to do her job 😂🤯🤯

thank you!

ThatGuyAgain21

I’m wondering whether my worries are warranted. We are applying for a RTB mortgage I have some history of defaults from 5+ years ago still paying the DMP due to finish this year with no missed payments since starting DMP in 2019. 

Our property is valued at £160k and the RTB offer is £80k and we have a combined income of £80k. 

We had a pre offer call last week and was told we would hear back in 24/48hr but heard nothing in the past 4 working days. 

Our plan was to buy in a few years when the DMP was finished and defaults off the credit file but with the RTB changes it made sense to just try now.