Why is my broker reluctant to get me 95% LTV?

jazzyja

K_S said:

jazzyja said:

I suppose the main reason I dont want to progress by myself with the DIP is because I'm worried. It's my first time, I would rather someone who's an expert in the field help me. I've seen a property I like but I have just less than 10% and I have no money or savings to stretch any higher, but he kind of doesn't want it lower than 10.
I mean I can just go ahead and try myself but that just means a hard search and potentially getting no where. I'm confident he can get me one, as he does have a good reputation.

@jazzyja Fair enough. Bottom line is that if you can't (or don't want to) stretch to a 10% deposit, and you are potentially eligible for at least one 95% product that allows you to borrow what you need, then there is literally no reason for the broker to not progress. There is nothing for him to gain by that.

Tell him that you only want to put down a 5% deposit, get a realistic budget from him on that basis and then just go on with your viewings. Once you have an offer accepted then ask him to get on with getting you a mortgage.

Having said that, do keep in mind that the difference in your max budget budget with a 95% mortgage and a 90% mortage is not going to be just the 5% extra deposit. Lenders who will lend you a maximum of 4.75x/5x income at 90% LTV may drop to 4.5x at 95% LTV.

OK, its not that I don't want to, I'm just in a rush. I cant wait extra months. I wish I could, but mentally I really really cannot.
Usually when we discuss it he does say my potential lenders reduce alot when I mention the 5%. So I thought perhaps he just wants to make sure he can 100% get one for me, knowing I'm pretty desperate. 
I mean on a property of 140 I do have like just over 9%. When I do my own online searching on say, uswitch for example, it classes my deposit as 10%....would lender do that even though its not quite 10%? Sorry for my daft questions! 

K_S

@jazzyja Sorry unless you have (or expect to have) at least 10% (not £1 less) of the purchase price, no lender will consider it as 10%.

However, given that we're in mid-May and you expect to hit 10% by June end, there's nothing stopping you from making an offer, and (once it is accepted) then going ahead with a 10% application with a plausible path to getting there deposit-wise in a few weeks. It isn't like completion is going to happen before then. I hope that makes sense.

jazzyja

K_S said:

@jazzyja Sorry unless you have (or expect to have) at least 10% (not £1 less) of the purchase price, no lender will consider it as 10%.

However, given that we're in mid-May and you expect to hit 10% by June end, there's nothing stopping you from making an offer, and (once it is accepted) then going ahead with a 10% application with a plausible path to getting there deposit-wise in a few weeks. It isn't like completion is going to happen before then. I hope that makes sense.

Ahh see, this is the other thing. Broker states I cannot apply until full deposit. So I have to scrape together every penny just to be able to view. 

K_S

jazzyja said:

K_S said:

@jazzyja Sorry unless you have (or expect to have) at least 10% (not £1 less) of the purchase price, no lender will consider it as 10%.

However, given that we're in mid-May and you expect to hit 10% by June end, there's nothing stopping you from making an offer, and (once it is accepted) then going ahead with a 10% application with a plausible path to getting there deposit-wise in a few weeks. It isn't like completion is going to happen before then. I hope that makes sense.

Ahh see, this is the other thing. Broker states I cannot apply until full deposit. So I have to scrape together every penny just to be able to view. 

@jazzyja I can't fully blame him for that as it's a 50-50 thing. Lenders don't always require proof of deposit at application but may ask for it during underwriting. If they do ask for it, as long as it is plausible the underwriter usually will be happy with it.

TheLastMinute

In a way, the broker is correct in that rates for 95% LTV mortgage are worse than rates for 90% LTV mortgage. However, if you've taken an informed decision that you're happy to pay that premium to get on the housing ladder now with a 5% deposit, the broker should be supporting you to do that within the bounds what what's achievable and reasonable. 

We too had problems with brokers, also being first time buyers looking for a 95% LTV mortgage plus the issue that the second applicant has only just started a new job so didn't have any payslips.

The first broker we tried was one of the big nationals. They were super slow and took three weeks to even come back to us with a recommendation by which time we were halfway through a full application elsewhere. The second broker was a local one-man band who didn't even bother to ring back as promised following a brief initial phone call.

The third was a local shop based broker. We did get as far has having a 20 minute Teams meeting with them but got told "95% LTV mortgages are new on the market, the providers haven't provided me with any information so I can't help. Phone back next month." This was mid April so there were a number products in the market by that stage so we were less than impressed but at least he admitted that he couldn't really be bothered with the 95% market. 

In the end, we did our own research and applied directly to Halifax towards the end of April as we knew they would accept a signed employment contract as evidence of income and they did a soft search for the Agreement in Principle. They have been good and fast. The valuation was booked in for today and we heard early afternoon that a mortgage offer has been issued. 

I think I would say don't necessarily be afraid of applying direct. My understanding is that most banks still sell mortgages via an "advised" rather than an "execution only" route. So while the product range will be severely limited compared with a broker (i.e. just the mortgages offered by that bank), the Mortgage Advisor is still registered with the FCA and will discuss your circumstances in order to make a recommendation. Our call with the Halifax MA was about 2 hours to go through everything and come up with a recommended product.

At the end of the day, it's your choice how you proceed. You have to be 100% comfortable with the choices you make. The OP said that she was worried about what the broker would think if she challenged. I would suggest that any broker that makes a client worry about that probably isn't a very good broker.

lonibra

You have a couple of choices.

1. Tell your MB that you want to go down the 95% route and whether he can get you a mortgage or not.

2. Proceed direct.

3. If your MB won't do it, then get another MB who says yes.

Thrugelmir

jazzyja said:

Thrugelmir said:

What's your potential price for the property? 
How long would it take you to get up to a 10% deposit at your current rate of saving? 

Potential price is 140k, I view next week. I only have 13k. I would have an extra 1k by the end of June. By then house will of probably gone. I've already lost 2 to other buyers before I've even viewed. I am in a rush as the house I'm in is no good at all and causing me a ton of issues. 

Don't rush a buying decision.  You haven't even viewed the property yet. You might get outbid in any event. 

jazzyja

Thrugelmir said:

jazzyja said:

Thrugelmir said:

What's your potential price for the property? 
How long would it take you to get up to a 10% deposit at your current rate of saving? 

Potential price is 140k, I view next week. I only have 13k. I would have an extra 1k by the end of June. By then house will of probably gone. I've already lost 2 to other buyers before I've even viewed. I am in a rush as the house I'm in is no good at all and causing me a ton of issues. 

Don't rush a buying decision.  You haven't even viewed the property yet. You might get outbid in any event. 

I know, I've already done this 3 times over unfortunately. They're selling before I even have chance to bid!

Thrugelmir

jazzyja said:

Thrugelmir said:

jazzyja said:

Thrugelmir said:

What's your potential price for the property? 
How long would it take you to get up to a 10% deposit at your current rate of saving? 

Potential price is 140k, I view next week. I only have 13k. I would have an extra 1k by the end of June. By then house will of probably gone. I've already lost 2 to other buyers before I've even viewed. I am in a rush as the house I'm in is no good at all and causing me a ton of issues. 

Don't rush a buying decision.  You haven't even viewed the property yet. You might get outbid in any event. 

I know, I've already done this 3 times over unfortunately. They're selling before I even have chance to bid!

The market will cool. No need to get sucked into the frenzy. 

Until you find a property. There's little point in the broker finding you a definitive mortgage product.