Discussion
Hi, I am needing to apply for a mortgage on a property and have a few questions others hopefully can advise me on,
1) The amount is large-ish and most of my yearly money is paid on dividends and of course changes each year depending on how good or bad the year has been, Do the lenders fully consider the dividends, would they take an average amount over last 3 - 5 years, or will they mostly only consider my basic salary.
2) Mortage advisor or go it alone, Are advisors really much use or mostly best used by first time buyers who need a bit of hand holding, I dont really want to pay fees to a third party for finding me a best deal I could probably find on line, or do they have special realtionships with lenders that allow them better deals and generally more willingness from the lenders to lend.
3) I would be keeping my current house and renting out, would the fact that my area is very very good for rental be taken into account in overlooking the current debt or in todays market would they seriously consider the debt as their full exposure for lending more on a new property.
4) I have another property that is mortgage free, would it assist and or be considered when deciding to lend, I guess they could take that as part guarantee for the debt on the new house/
Hope all makes sense, reading it back im not sure I have been alltoghter clear but anyway here goes !
1) The amount is large-ish and most of my yearly money is paid on dividends and of course changes each year depending on how good or bad the year has been, Do the lenders fully consider the dividends, would they take an average amount over last 3 - 5 years, or will they mostly only consider my basic salary.
2) Mortage advisor or go it alone, Are advisors really much use or mostly best used by first time buyers who need a bit of hand holding, I dont really want to pay fees to a third party for finding me a best deal I could probably find on line, or do they have special realtionships with lenders that allow them better deals and generally more willingness from the lenders to lend.
3) I would be keeping my current house and renting out, would the fact that my area is very very good for rental be taken into account in overlooking the current debt or in todays market would they seriously consider the debt as their full exposure for lending more on a new property.
4) I have another property that is mortgage free, would it assist and or be considered when deciding to lend, I guess they could take that as part guarantee for the debt on the new house/
Hope all makes sense, reading it back im not sure I have been alltoghter clear but anyway here goes !
Hi!
PM sent but for the benefit of anyone else.
1) The amount is large-ish and most of my yearly money is paid on dividends and of course changes each year depending on how good or bad the year has been, Do the lenders fully consider the dividends, would they take an average amount over last 3 - 5 years, or will they mostly only consider my basic salary.
Depends on which mortgage company you use, but yes dividends are just fine as long as you have a proven track record.
2) Mortage advisor or go it alone, Are advisors really much use or mostly best used by first time buyers who need a bit of hand holding, I dont really want to pay fees to a third party for finding me a best deal I could probably find on line, or do they have special realtionships with lenders that allow them better deals and generally more willingness from the lenders to lend.
Yes mortgage adviser ( me preferrably - shameless plug i know) simply because its easier, les hassle and for a basic mortgage we dont charge and get paid by whichever lender YOU chose.
I normally operate this way, simply for less client outlay and we get paid more than enough from the lender so dont consider it fair to charge an extra fee.
3) I would be keeping my current house and renting out, would the fact that my area is very very good for rental be taken into account in overlooking the current debt or in todays market would they seriously consider the debt as their full exposure for lending more on a new property.
The rental will be taken ito account, but youll need permission from your current lender to rent it.
Also it will be subject the the usual buy to let calculations, ie rent being 125% of the monthly mortgage payment. Again, this is why the advised route is the best/simplest for you.
4) I have another property that is mortgage free, would it assist and or be considered when deciding to lend, I guess they could take that as part guarantee for the debt on the new house/
It can be used as part guarantee, it just depends on your overall situation.
If it is mortgage free and rented its definately not the most tax efficient way to own a home.
Again, advised route would help alot with this.
Hope all makes sense, reading it back im not sure I have been alltoghter clear but anyway here goes !
Sorry for the longish reply and hope it all helps
Darryl Bradford IFACertPFS
www.pentagonpartnership.co.uk
PM sent but for the benefit of anyone else.
1) The amount is large-ish and most of my yearly money is paid on dividends and of course changes each year depending on how good or bad the year has been, Do the lenders fully consider the dividends, would they take an average amount over last 3 - 5 years, or will they mostly only consider my basic salary.
Depends on which mortgage company you use, but yes dividends are just fine as long as you have a proven track record.
2) Mortage advisor or go it alone, Are advisors really much use or mostly best used by first time buyers who need a bit of hand holding, I dont really want to pay fees to a third party for finding me a best deal I could probably find on line, or do they have special realtionships with lenders that allow them better deals and generally more willingness from the lenders to lend.
Yes mortgage adviser ( me preferrably - shameless plug i know) simply because its easier, les hassle and for a basic mortgage we dont charge and get paid by whichever lender YOU chose.
I normally operate this way, simply for less client outlay and we get paid more than enough from the lender so dont consider it fair to charge an extra fee.
3) I would be keeping my current house and renting out, would the fact that my area is very very good for rental be taken into account in overlooking the current debt or in todays market would they seriously consider the debt as their full exposure for lending more on a new property.
The rental will be taken ito account, but youll need permission from your current lender to rent it.
Also it will be subject the the usual buy to let calculations, ie rent being 125% of the monthly mortgage payment. Again, this is why the advised route is the best/simplest for you.
4) I have another property that is mortgage free, would it assist and or be considered when deciding to lend, I guess they could take that as part guarantee for the debt on the new house/
It can be used as part guarantee, it just depends on your overall situation.
If it is mortgage free and rented its definately not the most tax efficient way to own a home.
Again, advised route would help alot with this.
Hope all makes sense, reading it back im not sure I have been alltoghter clear but anyway here goes !
Sorry for the longish reply and hope it all helps
Darryl Bradford IFACertPFS
www.pentagonpartnership.co.uk
Some lenders will consider dividends, some wont - most lenders work on an affordability calculation.
Given your situation (let property in the background and income derived from dividends), I'd say go with an advisor - not all of us charge fees - "commission" in the form of a procuration fee paid by the lender is an alternative.
If your current property will be self-funding after letting (rental payments cover mortgage + a bit left over), then some lenders will ignore it when calculating affordability. Ensure you have permission to let from your current lender!
Depending on the status of your mortgage free property (whether it is let vs holiday home vs pied-a terre), you may want to consider a different financing arrangement to make it more tax efficient.
Hope that helps
Given your situation (let property in the background and income derived from dividends), I'd say go with an advisor - not all of us charge fees - "commission" in the form of a procuration fee paid by the lender is an alternative.
If your current property will be self-funding after letting (rental payments cover mortgage + a bit left over), then some lenders will ignore it when calculating affordability. Ensure you have permission to let from your current lender!
Depending on the status of your mortgage free property (whether it is let vs holiday home vs pied-a terre), you may want to consider a different financing arrangement to make it more tax efficient.
Hope that helps
Thanks for replies, I have been aware of the tax side with the mortgage free property but ashamed to say been too lazy, I guess I should be trying for a remortgage on that home and using the funds gained to put down on the new home thus offsetting the mortage payments against my tax.
GallardoOwner said:
Thanks for replies, I have been aware of the tax side with the mortgage free property but ashamed to say been too lazy, I guess I should be trying for a remortgage on that home and using the funds gained to put down on the new home thus offsetting the mortage payments against my tax.
Possibly - depending on your circumstances & the numbers, this could be a big win for you. Gassing Station | Finance | Top of Page | What's New | My Stuff