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AMA
Original poster

I run a mortgage underwriting team - AMA

66 replies

TapStepBallChange · 10/08/2018 18:38

Clearly in the running for most boring AMA, but thought it might be helpful to someone. I run a mortgage team (for a relatively small mortgage lender), I oversee individual mortgage decisions, and look at policy changes - what we should and shouldn't lend on at a high level. I can't comment on the specifics of other lenders policies, or tell you you definitely will or won't get a mortgage, but I might be able to help.

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Fuckedoffat48b · 14/08/2018 08:50

Why does it take so long? Our ftb mortgage took over a month from application to approval.

We had snarky sugggestions from friends and relatives that this is because there was some 'problem' with it because I am self-employed. Is that true?

Shadowboxerbaby · 14/08/2018 08:54

Can you be put on the title deeds without being on the mortgage? Or is it worth both parties applying joint even if one is not earning?

Original poster
TapStepBallChange · 14/08/2018 20:07

Ooo, a few more questions, sorry have been busy mortgaging today.

@herminonelodge - are you using any of the government schemes such as help to buy? they are usually the best way to get 95% on a new build. There aren't many lenders that will do it without, because of the new build premium. And you do have to be careful with incentives. The reason is, if you are buying a house for £100k with 95% mortgage, but the incentives being given are worth £3000, you are actually only buying a house worth £97k, so you are way over the 95% LTV, and are paying £3k for the other bits. So you need to be careful with the incentives.

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Original poster
TapStepBallChange · 14/08/2018 20:10

@Berimbolo

It can probably be done, again more likely with a smaller lender who does manual underwriting, so find good broker who can direct you. It's more likely if you are doing the same type of job as before, so you can see they have the skill set to do it. We're more likely to accept a contract and pay slip if you are an accountant moving from firm A to firm B, than if you're a librarian becoming an acrobat. Also depends on how close to the edge you are on other things, but with a reasonable LTV and good affordability, it should be doable

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Original poster
TapStepBallChange · 14/08/2018 20:14

@ASAS. Thank you, Grin. I was hoping someone would find it useful, otherwise I'd be int he running for shortest and dullest AMA thread ever, although I'm still quite jealous of the show jumper one.

The lack of personal finance education is a scandal, we need to teach people the basic concepts so they can cope. I'm happy to try and answer questions on other banking and lending issues, but mortgages are my thing.

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GandalfsWrinklyHat · 14/08/2018 20:18

Oooh TapStep your AMA is very timely! We’d like to buy a flat in London for my husband to stay in during the week mon-thurs or friday. Apart from the cost of commuting (6k a year!!) the 3 hours a day is killing him after 7 years of doing it. I was looking at a studio flat but another EA (who is trying a one-bed hard sell) told me we won’t get a mortgage if the property is under 30m2. Is this true? I thought it was only the case for BTL? We do need the mortgage.

Original poster
TapStepBallChange · 14/08/2018 20:22

Fuckedoff - honest answer, can be all sorts of reasons, it's often volume of applications and yours in just in the queue. The main things that slow up applications is getting all the right information, and there is more needed for self-employed cases. They do take longer, not because there's a problem, but there's just more to look and it's more complicated than just a payslip. There's not lots of secret black magic and spying that goes on when it all goes quiet, the main bits of info we get that the customer doesn't supply is the credit search. The rest is working on what you've given us.

Different lenders also do the in depth review at different parts of the process. Some do it at the decision in principle stage, so that takes a while, and then the offer is really quick. Others do a quick DIP, but the offer takes a lot longer as that's when they're doing the review.

Long waits are not a sign to worry, it's usually just a sign a lender is busy and you're in a queue, so long as they are not asking lots of questions. It's more of a sign if it's taking a while because the lender is asking you or your broker a lot of questions. Even then they are still finding a reason to lender, if you're going to say no, it's far cheaper for you as a lender to say it quickly, time is money etc.

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Original poster
TapStepBallChange · 14/08/2018 20:24

Shadowboxer

A small number of lenders will let you be on the deeds and not on the mortgage, but not many, I can only think of one off the top of my head. If it works I'd just both go on the mortgage if you can

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HopefullyMoving · 14/08/2018 20:28

If I have an approved mortgage for a certain amount, just pending exchange and completion, and something changes and I need to borrow more, do I have to go through the entire process again?

thinkingaboutfostering · 14/08/2018 20:29

My mother wants to buy a second property for me to live in but is struggling to find a company to offer her a mortgage that's not buy to let with the clause you can't rent to family. She has a significant lump sum for a deposit and her credit is great.

I have poor credit as I was royally screwed over by a cowboy landlord 4 years ago. So getting a mortgage on my own would probably be impossible plus I don't have any deposit.

Any advice?

Original poster
TapStepBallChange · 14/08/2018 20:30

Gandalf

Lots of lenders have a minimum size, generally protects resale value. This applies to residential as well as BTL. Another option could be to release equity in your main home and use that to buy the studio for cash, but you need to be aware that if you buy a small studio it could have limited resale potential.

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Gildashairflick · 14/08/2018 20:35

What classes as a first time buyer? I know it seems logical but I haven't had a mortgage for over 10 years as I've been renting so can I benefit from FTB offers still? Also, I had to hand the keys over on a house once (well over my credit file 6 years thing, see above) due to abusive ex, long story. My dad insists that means I'll never get a mortgage EVER again even though my credit record is now immaculate (think credit cards being offered to me with 10 k limit Shock). Is he right or is he being an old fashioned duffer who thinks debtors prisons should still be a thing? Not a dull thread at all btw :-)

Original poster
TapStepBallChange · 14/08/2018 20:40

@hopefullymoving. It shouldn't be the entire process, as you will have the valuation etc. It will need to be assessed again for affordability, and if the LTV changes you may need to move onto a new product. How easy this is will depend on how close to the limits you were before and are now. If it's a small amount you are increasing by, and you were a long way from affordability limits, it should be quick. As income has been verified etc, that shouldn't need doing again.

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mooncuplanding · 14/08/2018 20:41

I just had to remortgage due to a divorce agreement (his name was on it too until the agreed time this year so done a transfer of equity - I’d already paid him his share of actual cash years ago) and I’m confused as to what I was offered from my BS

house is £400k. Mortgage value £200k
My wage £45k plus maintenance of £7k
One car loan with £1500 remaining.

Been with BS for 10 years, been on my own and paying the £200k mortgage for 7 years with no issues, but had to take exdh off the mortgage this year and have it solely in my name

They offered me £112k

You say you’ll do up to 4.5 times the wages....why was mine so low?

I’ve sorted it to have a second charge on house but still don’t understand why it was so low?

Original poster
TapStepBallChange · 14/08/2018 20:45

@thinkingaboutfostering that's a tricky one. Regulation changes a couple of years ago made it a lot harder to lend to people who want to rent to family members, it's now know as a regulated buy-to-let mortgage. Some people offer them (I think some small building societies), so it might exist.

Another option might be to look at look at cross collateral and guarantor mortgages, there are a few out there which might work for you. Try googling Parent Assisted Mortgage Scheme

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mytittifersungtheirsong · 14/08/2018 20:48

I'm currently on a stipend of £15.000 year plus another £5,000 year in tax credits and maintenance. In two years I will pretty much have a guaranteed income of £35,000. I have a deposit of £20,000 plus a parent who is willing to act as a guarantor. I'd like to purchase on a shared ownership scheme, putting in around £100,000 (combined mortgage and deposit).

Would this be possible and would anyone lend money to me in these circumstances? Mid 40s with 1 child so keen to get on the ladder!!

hermionelodge · 14/08/2018 20:48

Thanks for your reply. We aren't using any govt schemes this time as dp used an open equity scheme to purchase his current place which is why we can only give 5% deposit on the new build. We have to pay quite a big sum back to the government from the sale.

Ok that makes more sense regarding the incentives in terms of mortgage approval. This may be a very silly question but what classes as an incentive? As we are doing PX they valued our place and it was pretty low, they have now offered us 10% over the valuation cost.. is this the type of thing that will go against us?

GandalfsWrinklyHat · 14/08/2018 20:53

Thanks for taking the time to reply TapStep, great thread x

wibblywobblyfish · 14/08/2018 20:58

Hello! I was wondering what impact an old, satisfied IVA would have on being able to obtain a mortgage. IVA started in 2011, finished in 2016. No missed payments, no other debt obtained since. Will this still show up on a credit check? Would it have to be declared?

Thanks in advance

MiriAmmerman · 14/08/2018 21:01

DP and I are just about to move to a cheaper area of the country (new job) which means that we will be in a position to buy a property (having thought we never would be).

However, I have cancer (originally diagnosed in 2014; treated for secondary disease in 2017 and 2018; currently in remission but long term prognosis is poor). Obviously I can't get life insurance - is it possible to get a mortgage without it? There's no reason why DP can't get life insurance - is it ok for just one of us to be insured? Will I have to disclose my medical history in a mortgage application?

Sorry - that's sort of 3 questions Smile

Original poster
TapStepBallChange · 14/08/2018 21:03

@Gildashairflick

A FTB is someone who has never owned another property, so you wouldn't count. If you have had a property repossessed it will be trickier, but if you've a good credit history since, and can explain what happened at the time, again with a good broker it might work. Apparently we're not allowed to use debtors prisons are more!

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sickmumma · 14/08/2018 21:04

We are in the south east - we don't earn enough to buy with a normal mortgage (we take home £4.5k a month but need a mortgage of £450k realistically) we have been looking at help to buy with the government loan so we would only need to borrow 55% of the actual house value (although they are a little more expensive being new build) how does this work when working out affordability though as you still
Have a 40% loan on the other half?

We have also looked at shared ownership however wondered if this is the same situation - because you need to pay the rent on the other half will this just be deducted by how much you can borrow?

ticktocktoo · 14/08/2018 21:07

Why are women with children penalised when taking out mortgages. Surely that's discrimination?

Original poster
TapStepBallChange · 14/08/2018 21:12

@mooncuplanding

I can't say why you were offered what you were, each lender does it differently. I will say that the 4.5x is generally a last back stop, but affordability assessment comes first, and each lender does that differently. So I can't comment on an individual decision on how much to lend.

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Original poster
TapStepBallChange · 14/08/2018 21:17

mytittifers

That will be a tricky one as you are combining 3 tricky things, shared ownership, a stipend and a guarantor. The problem as a lender is we are not allowed to take future expected income into account if it's an increase, so it's only on current earnings, and not many lenders will use a stipend. I can think of one regional lender who might do it, but it won't be straight forward as income multiples might be an issue. Many lenders won't use tax credits or maintenance. IN 2 years it should be fine if you are on £35k

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