Mortgages?

[MrsMozartMkII]

I think I'm in the right spot, if not please feel free to redirect me

Daughter and partner are early-mid-twenties, good credit histories, secure jobs, and a 10% deposit, but they can't make any sense out of what they're able to get mortgage-wise. One back changed its mind halfway through the process (willing to lend a heck more than the online thing did but then wanted 15% deposit), one won't say until they have a property in mind (which they can't do till they know what mortgage they can get...). It seems like a heck of a runaround for people who are a pretty secure bet.
So wise vipers, how does one go about getting a sensible and reliable mortgage offer these days?

It has changed so much in the past year due to covid. Have they tried a mortgage advisor?

LST Thank you. No to a mortgage advisor... Is that different to a financial advisor?

They should go through an independent (and free) mortgage broker like L&C. They’ll have access to all the deals out there and will know which lenders have the strictest lending criteria and which are offering 90% mortgages. It cuts out all the work yourself.

Most lenders withdrew their 90% mortgages this time last year due to Covid-related economic uncertainty: unfortunately, with only a 10% deposit they won’t be seen as a “sure bet”. Lenders are gradually beginning to offer these deals again, but they’re not at great rates and will have stricter criteria. If your DD and her partner are in a position to save more of a deposit and then look to buy later in the year, there will be much better mortgages available to them.

Yes, but get a free one that has no hidden fees. I cant remember who we used. I think it was L&C. We were late 20s with a 10% deposit too and had no issue getting a mortgage in principle. But I think its harder to get 10% deposit mortgages now due to covid. We scraped in by the skin of our teeth just before lockdown.

Myself and my partner are currently in the process of buying a house, similar age to your daughter. We had a 10% deposit ready at the start of last year but then covid hit and for the most part, lenders wanted a 15% deposit, although I believe 10% deposits are coming back onto the market more recently.

I would 100% recommend a mortgage broker, some are free and some charge a small fee but ours has been absolutely invaluable in helping with applications, insurance and also figuring out what we were likely to be able to borrow in the first place.

Thank you very much everyone. Very much appreciated.

I've passed it all onto DD and she is now on the hunt for a mortgage broker 🤗

I would actually recommend paying for a broker - it means they are less reliant on bank commission so aren't so concerned about signing you with whichever bank pays them the most and can take on fewer clients so you get more attention and ultimately faster service.
Also the banks will start to release their 95% mortgages next month following the budget announcement on the government guarantee but the rates will likely be high to cover the risks regardless

Thank you.

I've passed all info, insights and suggestions onto DD. She's very appreciative.

Another vote for paying for a whole of market broker. You pay for the broker either way but at least that way they work for you.

We’ve just had a mortgage in principle accepted at 90% ltv via nationwide directly. As others have said, they really need an independent mortgage advisor

I work for a whole of market broker that doesn't charge a fee and the suggestion put out by fee charging brokers that we are led by which lenders pay us more is false and insulting (and there's nothing to call between most of them anyway!)

I would always recommend a local whole of market broker, maybe speak to a couple. They will talk through affordability and how the process works, there is absolutely no need to have a property in mind at this stage, tricky like you say when you don't know what you can afford! An agreement, or decision "in principle" can be obtained at this stage before the househunting can really begin.

Almost everyone is wanting a 15% deposit at the moment so they need to prepare themselves for that. Unless they want to wait for the rishi deals to come out in April.

They should be able to get an agreement in principle from any of the big banks which would tell them where to set their price criteria.

They do need to make an offer and get it accepted before they can realistically apply for the mortgage .

They could do the affordability check on the money advise service website to gauge an idea but yes def a broker.