Cost of Mortgage Advice

[Fusion]

My mortgage is less than 25% of my take home (and that’s after pension and student loan). It’s a good place to be financially if you can do it.

However, there’s always the temptation or option to trade up, which I am considering. Could get something significantly better and still be below 33%, which would be fine. I don’t have any loans, credit card debts or other finance though.

 

[flea.rider]

wow young un's today are never satisfied...why spend over 40% of your wage on a house .. spend 25% and when you can over pay .. when the house is yours late 30's ish
then step up your still only going to spend 25% but you will have 50% to put down .. don't go to fast you might lose it all
be happy with what you have most don't

 

[EvilRob]

We are slightly under 25%, however I take home about 3x what my wife does after tax. We'd still be pretty comfortable if my wife lost her job, but if I lost mine it'd be extremely difficult. This does worry me, so we overpay quite a bit and keep a good amount in cash savings.

 

[fobose]

wow young un's today are never satisfied...why spend over 40% of your wage on a house .. spend 25% and when you can over pay .. when the house is yours late 30's ish
then step up your still only going to spend 25% but you will have 50% to put down .. don't go to fast you might lose it all
be happy with what you have most don't

For me it's about paying as little interest as possible, so I prefer to pay more now. I've never felt a huge need to have a massive amount of disposable income each month. I might also go 6-8 months without spending anything on myself (I mean literally nothing, not even clothes). I get joy out of spending my money on other people.

However, when I do buy something I want it normally costs me a fair amount. I also moved from a much cheaper area so my normal 3 bed to 4 bed upgrade should have an extra 80k in my old area but it cost me 260k extra to get it where I am now. I didn't have much of a commute before (25 mins tops) but now it is only 10 mins if that (and if on the bicycle, 28 mile round trip to to 8 mile round trip). My wife's commute was 50-60 mins but now only 20-25 mins, although she working from home atm

 

[b0rn2sk8]

Using a broker isn’t a guarantee you’ll get a better deal than something you can’t find yourself. They may have access to deals not on the ‘retail’ market, but they may not be any cheaper than those which are on the retail market. If you have to pay for the advice, there is a risk that they don’t come up with anything which is any better than you could find by just looking at money supermarket for about 35 seconds, particularly if you are borrowing well within your means.

 

[DanTheMan]

Interesting reading. I've just worked out that our mortgage, council tax, gas, electric and water comes to 25% of our net household income.

Out of our group of friends, I think we're the only ones who chose to borrow significantly less than the maximum offered. Most of our friends maxed out the amount they could borrow and have 30-35 year mortgage terms. I personally couldn't do it.

 

[engee]

I think it all depends on what you're happy with. Some people want the best/biggest house they can afford, whereas others are simply happy with just big enough, allowing for extra funds for other things. Personal value.

We decided to keep the mortgage term as short as possible so the monthly payments are higher than they could have been. Playing the long game.

 

[Biz.Kid09]

Ive just put my application in for a mortgage, gone for 35yrs 2yr fixed, I went with a broker just because hes a friend. He doesn't charge any fees and he has the fun of filling the forms in!
The rates are the same as what I found on gocompare etc but tbf id rather give him the business.

My plan is to definitely look at a completely different product in two years when my initial rate is up, i just wanted to reduce our monthlies for the first two years to give us extra cash to work on the property then hopefully in two years we will be in a better place to throw more at the mortgages and arrange over payments etc.

 

[bainbridge]

The mortgage broker we used charged £500 upon application, with free consultations in the run up to application. Yes, had the application failed, we would've need to pay him another £90 to place a new application, but the application went straight through, thanks to the pre app preparation he got us to do. with a deal way better than we could get ourselves and he was invaluable smoothing out the conveyancing process.

Well worth the money, considering it's the most expensive purchase we've ever made.

Plus he's on retainer and when our 5 year fixed term is up he'll search the market again for us and apply for a remortgage for a £90 fee.

 

[Biz.Kid09]

The mortgage broker we used charged £500 upon application, with free consultations in the run up to application. Yes, had the application failed, we would've need to pay him another £90 to place a new application, but the application went straight through, thanks to the pre app preparation he got us to do. with a deal way better than we could get ourselves and he was invaluable smoothing out the conveyancing process.

Well worth the money, considering it's the most expensive purchase we've ever made.

Plus he's on retainer and when our 5 year fixed term is up he'll search the market again for us and apply for a remortgage for a £90 fee.

What preapp preparation did you have to do out of interest? Not trolling, genuinely interested if it comes across bad at all!

As mentioned I am using a broker also and if theres anything I can do to provide him with docs etc before he even has to ask then that will speed things up a bit!

 

[DanTheMan]

Pro tip, if you Google '<mortgage company> intermediary mortgage', you can browse the site that brokers use with the mortgage companies to check interest rates and broker incentives etc.

Example:

https://www.halifax-intermediaries.co.uk/default.aspx

https://www.intermediary.natwest.com/

http://www.intermediaries.hsbc.co.uk/

It helps to know if you're broker is actually giving you the best rate or just the one that gives them the best fee.

 

[dlockers]

I used Habito. Got the advice for free, plus £500 QuidCo cashback. Mortgage had a further £1k cashback IIRC. 90% LTV with 45k down.

Not sure why people pay brokers if you are super vanilla in your needs (i.e. I want house, I have deposit, I buy house).

As above, brokers aren't doing any hard work in finding the deal, other than canvassing the market. Happy to be proven wrong but I don't see it being value for money unless you have complications.

What preapp preparation did you have to do out of interest? Not trolling, genuinely interested if it comes across bad at all!

As mentioned I am using a broker also and if theres anything I can do to provide him with docs etc before he even has to ask then that will speed things up a bit!

Last 3 months bank statements, credit cards, hire purchase, loans, blah blah. If you are getting any help from friends or family on your deposit, they'll need to fill out a gifting form (although that may have been the solicitor not the mortgage).

They'll probably put some clause in your mortgage that you'll pay off all your credit cards. Nobody checks or will follow up. Do what you want with that fact.

 

[bainbridge]

What preapp preparation did you have to do out of interest? Not trolling, genuinely interested if it comes across bad at all!

As mentioned I am using a broker also and if theres anything I can do to provide him with docs etc before he even has to ask then that will speed things up a bit!

I thought we were both squeaky clean and knew exactly how much debt we had but he helped us pick our finances apart to get the numbers exactly right, so the declared borrowing matches exactly with what the lenders searches will find. Take car insurance for example, we both pay by DD and I had no idea this could be classed as debt, it turns out that my car insurance wasn't classed as a debt but the missus's car insurance was, we both used different insurance companies.

The broker also advised me to pay off the iPhone contract I'd taken out, birthday gift for the missus, and a few other bits of tidying up too.

I used to use clearscore and the missus used credit karma, we both thought we knew what was what. The broker got us both to register with checkmyfile for a free Introductory month, this showed everything from all agencies. The broker explained that because he knows which lenders use which agencies he can use the info contained in the credit report to be clever about who to place the app with.

When it was time to submit the application he was visiting us at home, a rented 2nd floor flat. Our neighbour was a lovely old lady and we didn't want to tell her we were moving until we knew for sure that the mortgage was agreed, so I asked him to ring me when he arrived so I could quietly let him in without the door buzzer going off. Instead of being suited and booted he said he'll dress down so suspicion isn't aroused and he arrived in jeans and trainers with his laptop in a shoulder bag!

We were saving like mad at the time and I wanted to ensure that I had £500 spare in my current account because the broker made it clear that the agreement was payment upon application. I asked the missus to contribute and she said just wait for him to invoice us, "it's not as if he'll pull out a card machine in our flat". Fast forward to when he arrived, out comes the card machine with his laptop lol Her face was a picture.

 

[Biz.Kid09]

I thought we were both squeaky clean and knew exactly how much debt we had but he helped us pick our finances apart to get the numbers exactly right, so the declared borrowing matches exactly with what the lenders searches will find. Take car insurance for example, we both pay by DD and I had no idea this could be classed as debt, it turns out that my car insurance wasn't classed as a debt but the missus's car insurance was, we both used different insurance companies.

The broker also advised me to pay off the iPhone contract I'd taken out, birthday gift for the missus, and a few other bits of tidying up too.

I used to use clearscore and the missus used credit karma, we both thought we knew what was what. The broker got us both to register with checkmyfile for a free Introductory month, this showed everything from all agencies. The broker explained that because he knows which lenders use which agencies he can use the info contained in the credit report to be clever about who to place the app with.

When it was time to submit the application he was visiting us at home, a rented 2nd floor flat. Our neighbour was a lovely old lady and we didn't want to tell her we were moving until we knew for sure that the mortgage was agreed, so I asked him to ring me when he arrived so I could quietly let him in without the door buzzer going off. Instead of being suited and booted he said he'll dress down so suspicion isn't aroused and he arrived in jeans and trainers with his laptop in a shoulder bag!

We were saving like mad at the time and I wanted to ensure that I had £500 spare in my current account because the broker made it clear that the agreement was payment upon application. I asked the missus to contribute and she said just wait for him to invoice us, "it's not as if he'll pull out a card machine in our flat". Fast forward to when he arrived, out comes the card machine with his laptop lol Her face was a picture.

Fair enough, that makes a lot of sense. I am quite lucky that I don't have any car insurance or phone contracts or anything on finance etc so basically nothing tied to my name hah.

I just signed up for checkmyfile, tagged me at an 822 score which doesn't seem too bad.

lol'd at that story, fair play for him going the extra mile to do what you asked and keep it on the quiet!

 

[Buffman]

wow young un's today are never satisfied...why spend over 40% of your wage on a house .. spend 25% and when you can over pay .. when the house is yours late 30's ish
then step up your still only going to spend 25% but you will have 50% to put down .. don't go to fast you might lose it all
be happy with what you have most don't

What's wrong with stretching yourself? To be honest for some people if your salary isn't going to be house price increases there's no better time than the present to "buy big". The issue is you'll obviously pay more interest so need to work the numbers.

Im working at the max of lenders "affordability" bht its around 25% of our net combined salaries which isnt too bad (over a 35 year mortgage though). Overpayments mean we can decrease the term.

Pro tip, if you Google '<mortgage company> intermediary mortgage', you can browse the site that brokers use with the mortgage companies to check interest rates and broker incentives etc.

Example:

https://www.halifax-intermediaries.co.uk/default.aspx

https://www.intermediary.natwest.com/

http://www.intermediaries.hsbc.co.uk/

It helps to know if you're broker is actually giving you the best rate or just the one that gives them the best fee.

Thanks. Used this to check my brokers not trying to stiff me! I can get 1.64 via broker or 1.69 via current lender which is already approved. Tempted to stay with whats approved as it saves me effort, and will only save me 500quid ish over 5 years

 

[dlockers]

Fair enough, that makes a lot of sense. I am quite lucky that I don't have any car insurance or phone contracts or anything on finance etc so basically nothing tied to my name hah.

I just signed up for checkmyfile, tagged me at an 822 score which doesn't seem too bad.

lol'd at that story, fair play for him going the extra mile to do what you asked and keep it on the quiet!

Definitely don't mention you bought $GME

I'm sure the brigade will be here soon enough to tell you no credit record is as bad as having a bad credit record. Hopefully you have some CC's you are using responsibly to benefit from S75 protection, too.

Have your address history in good shape too. This almost caught me out as for the 7 years I lived in London I left everything in my 'home home' address.

 

[Biz.Kid09]

Definitely don't mention you bought $GME

I'm sure the brigade will be here soon enough to tell you no credit record is as bad as having a bad credit record. Hopefully you have some CC's you are using responsibly to benefit from S75 protection, too.

Have your address history in good shape too. This almost caught me out as for the 7 years I lived in London I left everything in my 'home home' address.

Lmao.

I have credit record, rented a flat and had the bills in my name etc, had a phone contract in my name for over 7yrs also, my current phone contract is with Virgin Media as part of my TV package so that's what I meant by no separate mobile bill!. I've Had an AMEX that I paid in full for nearly 2yrs etc.

Using mycreditfile, everything looks in shape. The only flags seem to be that some of the credit agencies don't note me as being on the electoral roll but some do which is odd. Otherwise I think I'm in fine shape.

 

[dlockers]

Nothing to sweat then. Congrats, enjoy the ride. Welcome to adulthood. Make sure you get off that 35 year mortgage ASAP.

 

[b0rn2sk8]

Not sure what all the fuss is about looking at credit reports when doing the mortgage application. Having some debt is fine, as long as it isn’t excessive or materially impacts your ability to pay the mortgage you want. They take much more into account now anyway and look across all mandatory expenditure, including non-debt expenditure like travel costs, bills and even things like food and pets. Basically anything you can’t just stop paying if you needed to.

The difference between having or not having a phone contract isn’t going to make or break a mortgage application.

What will is if you have a phone contract, car on pcp, gym membership, credit card debt repayments, loan repayments, a load of stuff on buy now pay later and 2 dogs taking up all of your income after mortgage payments.

 

[dlockers]

Not sure what all the fuss is about looking at credit reports when doing the mortgage application. Having some debt is fine, as long as it isn’t excessive or materially impacts your ability to pay the mortgage you want. They take much more into account now anyway and look across all mandatory expenditure, including non-debt expenditure like travel costs, bills and even things like food and pets. Basically anything you can’t just stop paying if you needed to.

The difference between having or not having a phone contract isn’t going to make or break a mortgage application.

What will is if you have a phone contract, car on pcp, gym membership, credit card debt repayments, loan repayments, a load of stuff on buy now pay later and 2 dogs taking up all of your income after mortgage payments.

Your second sentence answers your first one... And your final sentence is not exactly atypical, is it? The problem is if your credit report is flagging defaults you were unaware of or reporting / incomplete data issues. Your broker will liaise with the bank as to how many of those BNPL are untenable and need to be cleared before mortgage commences. But a gym, phone, car and loan are not a problem in their own right.