Ask the experts
About our experts...
At John Charcol, we are constantly asked for advice by borrowers on what they should do when it comes to mortgages. As such, we created this section so that you can submit your questions to our experts. The answers are provided by a number of people who have years of experience in the mortgage market. The team is led by Peter Woodward who spent his formative years as an underwriter with one of the major UK lenders and the last 10 years in our Technical Department along side Ray.
So please do submit your question and we will do all we can to answer it as quickly as possible
Please be aware that these answers can only be generic and no personal recommendations can be made.
Posted on 11/09/2009
My ex wife and myself seperated 18 months ago and divorced a year ago. No children both working full time marriage only lasted 2 years. She is living in the jointly owned marital home I have still paid half the £1250 per month mortgage. We put the property on the market and she refused one offer the estate agent advises we have to drop the price to sell which I am happy to do. My ex will not drop the price so she is living in a detached house and I am paying over £7000 a year for her to do so. I am trying to move on and need to sell. I also put £55k of my own money from the sale of my previous house into the property she put nothing in but also wants to claim half of this £55k plus a half share of any equity. Mortgage is £245k property on market for £349k agent advises to drop to £325 - £330k she would not accept an offer of £335 made 3 months ago. She says that she cannot afford to buy me out. I am paying £600 a month for a property I do not live in plus money to rent doe myself and I do not have £180 an hour for a solicitor to take this to court. Please help Many thanks Jack
Jack,
This problem is not one a mortgage broker can solve for you as any dispute such as this requires expert legal advice, which I recognise is expensive. I would expect the divorce settlement to have specified how jointly owned property, such as the matrimonial home, should be dealt with.
If it did and it specified that the property should be sold but left some flexibility on the timing and you consider that your ex wife is unreasonably withholding her agreement to accept a fair offer I think your only option is to go back to your solicitor. This will cost your ex wife money as well as you because your solicitor will almost certainly insist on dealing with her solicitor. Therefore if the two of you can resolve this amicably without recourse the law it will save both of you money.
Categories: Legal matters, Separation or Divorce
Posted on 05/09/2009
My partner is a day trader, and therefore is self-employed, but cant prove income in the form of payslips or 3 years accounts, but has bank statements that show money going into the accounts from his spreadbetting accounts and also hold 100,000 of sterling in forex. What type of mortgage can we get? Self-cert, 100%+ (as we dont have substantial deposit).
Lastly would lenders take into account Disability Living Allowance, Careers Allowance, Child Tax Credit & Child Benefit (coming in at just over 800 per month)
What options do we have?
Sara
Sara,
Many lenders only require 2 years accounts and so if your partner has been trading for 2 years and gets his accounts done that should enable you to get a normal mortgage, but you would have to put down a deposit of at least 10%. The only alternatives would be either a self certification mortgage, for which you need a minimum deposit of 20%, but to get a reasonable interest rate 25%, or a guarantor mortgage. Normally the guarantor would have to be one of either you or your partner’s parents and they would have to be able to prove adequate income to support both your mortgage and any mortgage they had. A self cert mortgage would be the most expensive of these options, as well as requiring the biggest deposit.
Some lenders will take into account some social security benefits, a key factor being whether they are short or long term benefits. I am not familiar with a careers allowance but this sounds short term and so probably would not be taken into account but the others possibly could be. If you would like more specific advice please call one of our consultants on 0800 71 81 91
Categories: Guaranteeing & buying with child, Self-certification
Posted on 31/08/2009
Hi we have a house worth £380k and mortgage left to pay of £195k. We would like to buy a holiday cottage to let in Ireland for £130k do you think we will be able to get a mortage based on the equity in our house? And if so what are the best current optins? Our current combined salary is £78k
Claire,
From the figures you have given this should be possible, providing neither of you have significant other financial commitments,. Such as an unsecured loan or credit card debt.
For a couple on your joint income it should be possible to borrow at least 4.5 times your income, which would be more than adequate. However, the cost of a new mortgage increases rapidly if you borrow more than 75% of the property value and it is very expensive to get a remortgage over 85%. I am assuming you have no early repayment charges on your current mortgage but if you do you may be better off asking for a further advance from your current lender rather than remortgaging.
If you would like more detailed advice we will need more information and so please call one of our consultants on 0800 71 81 91.
Categories: Buying abroad, Raising capital out of property, Remortgaging, Second properties
Posted on 30/08/2009
I have a BTL mortgage of £140k on property bought for £177,000 now valued at £200,000. Currently on a base rate tracker of 0.7% rising to 0.9% next year, rental income is £9600pa. I also have a residential morgage of £120,000 on a property valued at £150k but would like to re-mortgate to a BTL as this is also rented out for £9100pa. Would it be possible to re-mortgage the second property and raise some capital to buy a third without getting out of my tracker mortgage as I am unlikely to get that kind of deal again.
The short answer is no.
I am a little puzzled by your question because if you remortgage you would by definition be redeeming your tracker mortgage. It would, in any case, not be possible to remortgage the second property except for a smaller amount because the maximum loan to value (LTV) any lender is currently offering on a buy to let mortgage is 75% and your mortgage is currently 80%, based on your estimated value. Therefore unless you have some cash which could be used to reduce the mortgage your only option is stay with your existing lender, and as the property is let out they would certainly not offer you a further advance in view of your LTV.
If you haven’t told your lender that the property is let should ask for permission to let as otherwise you are breaking the terms of your mortgage offer. Most lenders will agree to this but will charge an admin fee, which, depending on the lender, could be several hundred pounds or even go into 4 figures. Also the lender will probably increase the interest rate when you come off your initial rate, and possibly before, and may impose the early repayment charge if your mortgage currently has one and they insist you switch to a higher rate.
Categories: Buy-to-let, Remortgaging
Posted on 10/08/2009
are there longer term mortgages ie. 35 - 45 years.
please quote for ist time buyer mortgage and remortgage.
Debra,
Some lenders will lend for as long as this, providing you are young enough for the mortgage term not to go beyond age 65. However, for a repayment mortgage most lenders won’t go beyond 40 years, and many won’t go beyond 30 or 35 years. If you would like more detailed advice relating to your specific requirements please call one of our consultants on 0800 71 81 91
Categories: Special circumstances
Posted on 13/07/2009
My partner and i are looking for a good mortgage deal and have been speaking with an independent broker. so we are clear that we are not being pushed into a deal that is unsuitable will the broker have to inform us of the commissions in each deal that they could earn or is it going to be kept secret from us. Furthermore at what stage should we be informed by the broker about any commisions?
kind regards
chris
Chris,
It is a requirement of the Financial Service Authority that brokers must disclose any commission being paid to them by the lender, as well as all other costs including the broker fee. The two key regulatory requirements a broker must meet to be allowed to call themselves independent are that they must offer whole of market advice and they must give you the option to pay for their services by way of a fee, although other options can be available as well, such as part commission and part fee.
The commission (also known as a procuration fee) and broker fee will be shown on the key facts illustration (KFI), which you must be given before committing to a mortgage.
Categories: The application process explained
Posted on 22/06/2009
My wife and I have gone our own way but she has left and won’t pay half towards to joint mortgage! She also won't agree to let me sell it either! Where do I stand? If I can’t make the payments will they track her down for the money as well?
If you haven’t already done so, you should look to seek proper legal advice from a solicitor. It is vital that you both come to a formal agreement in order not to miss any payments on the mortgage if at all possible.
Posted on 22/06/2009
My partner and I are first time buyers and are wishing to secure a mortgage in the near future. We are, at present, in a position to put down a deposit of at least 20%. I work for West Sussex County Council who's policy is to only offer temporary contracts for 9 months then renew it for a further 9 months and so on, so it is like a rolling contract. I have been working in my present post for about 4 months now. My manager has told me that she may be able to provide me with a letter saying that she can see no reason why my contract shouldn't be renewed. Will all these factors mean that a lender will disregard our application and refuse us the loan for a mortgage?
Kind regards,
No, a lender with a flexible approach to underwriting can be considered. I would strongly suggest that you speak to an independent mortgage adviser who will be able to run through your current circumstance, i.e. your position within West Sussex County Council and what position you held with your previous employer; was it in the same line if work? All of these factors can be taken into consideration when applying for a mortgage. Of course details of your partner will also be noted and determine the maximum mortgage available to you.
Posted on 21/06/2009
I work full-time but my income is only £12,400 a year. Will it be hard for me to get a mortgage? I do get help from tax credits and housing benefit, I was wondering if I can add those figures to my income when applying for mortgage?
There are a number of mainstream lenders that take into account tax credit and housing benefit allowance and a few that will allow you to add 100% of these to your income before calculating what you can borrow. Without knowing the value of your benefits I am unable to provide you with my guidance on how much you could potentially borrow. My advice would be to speak to an independent mortgage adviser who can go through your current situation in detail and provide you with details on the maximum mortgage available to you.
Posted on 17/06/2009
Are there any mortgage lenders out there that will take into account salary, child maintenance and tax credits when calculating how much they will lend?
Categories: State benefits, Tax issues
Posted on 16/06/2009
Can I use my entire pension or part of it to cover the deposit for a social homebuy?
Posted on 16/06/2009
Can you please provide a number when calling you from overseas. Using the 0845 numbers costs 3GBP per min. Regards.
Posted on 15/06/2009
I am getting a medical procedure done (which my insurance will not cover. Can I draw down my pension for this? I live in Detroit,MI.
Posted on 11/06/2009
Hi,
I am looking at investing in a second home. I currently have a mortgage of 83k on a property worth 115, but am looking to buy a second house to renovate and sell on. I am looking at a maximum of £50 on the second property. What are my options for funding this second house? Am I able to take another mortgage out for £50.? MY income is £30k
Thanks
Sue
Categories: Bridging loans, Remortgaging
Posted on 11/06/2009
I'm currently an expat facing retirement next spring, and want to obtain a mortgage on a UK property to live in. Can you advise how this can be accomplished, ie. can your company help.
Categories: Ex-pats mortgaging in the UK
Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not neccessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
We recommend you seek professional advice with regard to any of these topics where appropriate.