Mortgage advice - PLEASE!

[FemaleFootballFan]

Any mortgage brokers / advisers out there or anyone who has lots of mortgage experience (recent) who can help or reassure me please? I’ve googled the shit out of it but to hear it from another human being would be nice.

I moved into a shared house as a lodger a couple of years ago, this was a 3 (now due to financial things holding me back turning into 4) year plan as it’s the only way to get a deposit together for a house of my own.

I am 35 and my salary is let’s just say less than £30k but more than £24k. I’ll probably be looking at a house worth around £135k which although will be a pretty modest house is doable where I live (over 100 miles north of London). I’ve been told by my own bank that buyers can borrow 4 times salary if they have a 10% deposit or 4 and a half times if they have a 15% deposit, which is what I’m aiming for (this wasn’t an AIP or anything, just a general query without them knowing my details). If somebody could please answer the following for me I will be very grateful:

(Also just to add... wild horses won’t drag me into a shared ownership scheme and I don’t want to split the responsibility with anyone else or share any of it. This is my security, my future and my dream. I want to own my own home 100%)

1. Do I really need a mortgage broker? If my bank agrees to lend me 4.5 as above why not cut out the middle man and just go with them? What can a MB do for me that I can’t do myself? Also how much do they charge and can I trust them?

2. At what point do I apply for an agreement in principle? Do I find a house I like first and then get an AIP? Surely I’ll be taken more seriously by a seller if I already have something pencilled in?

3. If I do get an AIP that’s valid for say, 3 months, what if I don’t find a house I like or am accepted for in that time? Does that mean I need to get a fresh AIP? If so won’t that affect my credit history/rating?

4. I have a direct debit for my mobile phone, this is paid on time every month. TV license also. I also have a credit card that I use a little bit and pay back before due - just to show responsibility etc. But other than paying my landlord every month I have no other bills as the rent covers everything. The amount I currently save each month for this deposit is more than enough to cover mortgage repayments and bills and to live happily on what’s left over. But there’s not much on paper (gas, electric etc) to prove I’m paying bills on time. Will this be a problem?! My credit rating on Experian is excellent.

5. I won’t need to pay for removal fees as I sold all my furniture when I gave up renting, I won’t pay stamp duty or estate agency fees as I would be a first time buyer. So as far as I’m aware the only fees are solicitor and surveyor. I’m assuming ball part £2k for this. Is that accurate and does it get added to the mortgage or do I pay separately? I’m aware of costs for furniture and maintenance of house etc but I’ll start building back up immediately once I’ve bought - I don’t care if the house is empty when I buy it as long as it’s quiet and it’s mine.

6. Extra info - I’m single and don’t have any children or outstanding debts. No catalogues, no overdraft. Nothing.

7. I have heard about 5% deposits, but I’m assuming life won’t be that easy for me. Nobody is going to give me a 95% mortgage on a 5% deposit - at least not the amount I would need as stated above for a house of that value.

So... if there’s anything I’m doing wrong or anything else I can do right please advise me? I want this so much I can feel it burning in my stomach.

Thanks so much xx

[FemaleFootballFan]

Bump

[Wombatwife]

Can’t help you with everything but...
We used a mortgage broker. They can quickly look at all the deals across the mortgage market which is a lot. There are a lot of different types and combinations of mortgages eg low rate, high fee, solicitors fees paid, cash back and they can help with choosing. The broker should cost you nothing - they are paid a procurement fee by the mortgage lender - they’ll have to disclose how much to you.
I’d get an agreement in principle before making an offer. If it expires and needs to be done again it should not impact your credit rating. In most cases an AIP will not secure you a product but outlines how much the company is willing to lend. The actual amount could change as your application is processed depending on the mortgage lenders procedures.
The solicitors fees will need to be paid separately unless this is part of the product. You’ll pay the solicitor directly. The amount will depend upon the property you purchase and the effort involved - factors that could affect this are whether it is freehold / leasehold, issues with searches. £2000 seems reasonable.
You’ll also have to pay a valuation fee unless this is part of the product.
95% mortgages are becoming more available now as are interest only so there are other options. Again a mortgage broker can help you understand whether these would be suitable for you.
Hope that helps

[Singlenotsingle]

You're asking a lot of questions there OP. All I can say is I've bought four houses during my life and never used a mortgage broker. I'll have to think about the rest. Maybe an expert will come along.

[FemaleFootballFan]

Thank you.

Sorry. I know I'm asking a lot of questions but this will be the most important purchase of my life and it's intimidating doing it alone. So I want to make myself as knowledgable as possible xx

[dtarry]

Hello!

I'm a broker and am pleased to say that I have hundreds and hundreds of happy clients! I have saved them hours and hours of time and effort by searching through thousands of different products to find the best one for them, based on their individual circumstances, and use the whole market as the basis for my analysis.

Some lenders will lend more than others, and some will allow some things that others won't, so when I speak to people in your situation, I take time to find out more about what you're looking to do, their situation etc before recommending the best course of action. The thing is, that everyone is different and as a result, everyone's circumstances are different, and that's where a good broker can be priceless - unpicking these circumstances to find the best product for the client. Does that make sense?

With regards to an AIP, my strong advice is to hold back at the moment. The reason is simply that an AIP only applies to the lender you've gone to, so you could end up having an AIP with, for example, Halifax, but when you actually come to applying there's a better deal with Nationwide and you have to start the whole process again. And the real problem comes when you have had too many AIP's, which could adversely impact your credit file & scoring. I explain my thought with clients each time and the best way to approach it, but, once again, it really does depend on the individual circumstances.

With regards to a survey etc., again, this is something I discuss with clients and walk them through the process - the thing is that when you're doing this for the first time, or somewhat infrequently, it's quite daunting, and I understand that, completely, and again, that's where a good broker (and there are bad ones out there!) can help...by listening, helping, advising, and saving you the time and effort of searching all the lenders' criteria and the thousands of products available.

Does that help, at all?

[FemaleFootballFan]

Dtarry - yes thanks so much! I'm unfortunately still a good 18 months away (touch wood) from having a 15% deposit so I wouldn't dream of getting an AIP yet, I just really want to know as much as possible now so that I'm confident that if I ever get there when the time is right I've done everything properly to put me in a strong position... yes it's very daunting indeed and I'll probably have a breakdown trying to do it myself so will more than likely use a recommended MB xx

[dtarry]

lol - I know what you mean, and plenty of people have felt the same way! However, that's where people like me come in, and I hope you find someone who'll help when the time comes.

By the way, even at 90%, some lenders will lend high amounts and, for example, with a 2 year fixed at 1.99%.

Good luck, and let me know if I can be of any other help.