Mortgage broker - ask me anything

K_S

ThatGuyAgain21 said:

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. 

@thatguyagain21 Depends on what it is that you're worried about.

80k RTB loan size, 80k income, 50% LTV, 5+ years clean credit history, an active DMP.

Based solely on the above, you should be able to get a mortgage, and likely at mainstream-ish rates, there's no reason to worry about that.

Don't take this as advice as I know nothing about your circumstances, but very generally speaking, if you have the cash to pay off the DMP in full and close it before you apply for a mortgage, it might be worth considering, as that might help you save some money by being able to use a lender offering a lower rate.

k4y84

I am using my own savings to pay my deposit and I know if I was using a gift from a parent I would have to declare this and potentially show bank statements from that parent. But if a parent pays for my Estate Agent, Solicitor, Mortgage Product and SDLT fees, would I be expected to specify this and fall under the same burden of proof? Also can these be paid via debit card or do they usually have to be bank transfer?

K_S

k4y84 said:

I am using my own savings to pay my deposit and I know if I was using a gift from a parent I would have to declare this and potentially show bank statements from that parent. But if a parent pays for my Estate Agent, Solicitor, Mortgage Product and SDLT fees, would I be expected to specify this and fall under the same burden of proof? Also can these be paid via debit card or do they usually have to be bank transfer?

@k4y84 Irrespective of where the funds come from, your solicitor has a legal duty to conduct anti money laundering checks.

Depending on the amount, the mechanics of what exactly they do may vary. For instance if your SDLT bill is 2k, it might be sufficient that the funds land from another UK bank account. However if the bill is (say) 25k, then they might need to trace the funds back through the bank account it came from.

Mortgage product fee - can be added to the loan and then you can pay off on day 1 by bank transfer and/or debit card depending on the bank 

Estate agent fees - usually only paid by the seller and deducted from proceeds of sale

Solicitor fees - Bank transfer or debit card

SDLT - bank transfer 

k4y84

K_S said:

k4y84 said:

I am using my own savings to pay my deposit and I know if I was using a gift from a parent I would have to declare this and potentially show bank statements from that parent. But if a parent pays for my Estate Agent, Solicitor, Mortgage Product and SDLT fees, would I be expected to specify this and fall under the same burden of proof? Also can these be paid via debit card or do they usually have to be bank transfer?

@k4y84 Irrespective of where the funds come from, your solicitor has a legal duty to conduct anti money laundering checks.

Depending on the amount, the mechanics of what exactly they do may vary. For instance if your SDLT bill is 2k, it might be sufficient that the funds land from another UK bank account. However if the bill is (say) 25k, then they might need to trace the funds back through the bank account it came from.

Mortgage product fee - can be added to the loan and then you can pay off on day 1 by bank transfer and/or debit card depending on the bank 

Estate agent fees - usually only paid by the seller and deducted from proceeds of sale

Solicitor fees - Bank transfer or debit card

SDLT - bank transfer 

Thank you. All fees combined are under 10k. When the time comes I'll provide them with statements from my own accounts then and ask them if they need to see anything from my parents side.

Fkhan95

Hi,

We’re currently renting ourselves and have a property out on consent to let. 

We’re looking to purchase a residential property - what proof is required to show the background property is self financing and therefore not impacting affordability for our new purchase?

 We do not need the background property to show any additional income towards new purchase.. just that that it’s self financing.

We’ll have 1 year of self assessment as of time of application for resi purchase. Do we need to show rental agreement, 3-6 months of bank statements and SA or will just the SA suffice?

Which lender(s) would be best placed for something like this?

Thanks 

K_S

Fkhan95 said:

Hi,

We’re currently renting ourselves and have a property out on consent to let. 

We’re looking to purchase a residential property - what proof is required to show the background property is self financing and therefore not impacting affordability for our new purchase?

 We do not need the background property to show any additional income towards new purchase.. just that that it’s self financing.

We’ll have 1 year of self assessment as of time of application for resi purchase. Do we need to show rental agreement, 3-6 months of bank statements and SA or will just the SA suffice?

Which lender(s) would be best placed for something like this?

Thanks 

@fkhan95

Proof - depends on the lender, usually proof of the rental income coming in is sufficient. Unlikely to need the SA.

What impact it has - depends on the specifics, amount, LTV, rent v mortgage payment, lender, etc.

Assuming the rental cover is comfortable, and it isn't particularly high LTV, it's unlikely to cause any insurmountable issues. Just start with the cheapest lender and work your way down the list.

vandanfc

Hi, looking for some guidance please. My daughter is looking to get a mortgage,  but she receives Adult Disability Payment (we are in Scotland) and ESA. Total annual income of over £18000. What are her chances of getting a mortgage? 

Thank you in advance for any help.

K_S

vandanfc said:

Hi, looking for some guidance please. My daughter is looking to get a mortgage,  but she receives Adult Disability Payment (we are in Scotland) and ESA. Total annual income of over £18000. What are her chances of getting a mortgage? 

Thank you in advance for any help.

@vandanfc There are a decent number of lenders that will consider sustainable benefits income for lending.

However, with an 18k income, the max borrowing will probably be limited to 40-70k at most, assuming no dependents, no background debt/commitments, etc.

Alternatively, if you are able to help, there might be options like JBSP that allow you to support her to borrow what she needs.

vandanfc

She only needs £41500. Nationwide have said it’s unaffordable!

K_S

vandanfc said:

She only needs £41500. Nationwide have said it’s unaffordable!

@vandanfc Affordability, criteria re benefits income all can differ across lenders, so it might well be unaffordable with Nationwide but ok with another lender.

Just use a mortgage broker to get a definitive answer on whether or not you are able to borrow 42k, here's the MSE guidance on how to find one.
https://www.moneysavingexpert.com/mortgages/best-mortgages-cashback/#step3

Good luck!