Hi

Can anyone help us. We have spoken to an IFA who is "almost " family. Basically we wanted a financial health check done and some mortgage advice. So far so good. Now it gets complicated. We originally wanted to see what we could do about a mortgage my husband has with his parents ( all done before we met). We wanted to know where we stood with regards to it. The original idea was to persuade his parents to downsize to a two bed. Once we had a a statement through it was apparent that there wouldn't be enough equity left to do this. (We live in an expensive to buy area). So we wanted to see if we could get another mortgage as well as this one. Most lenders have said no including our own bank as they would take the whole amount into consideration although he only pays for half of it. We got an A.I.P from the Abbey which was for 125 thousand. They would of lent us more but took off his half of the mortgage.

We found a house we like and my mum is going to lend us the 5% deposit needed. So we put in an offer. Our I.F.A. went mad..... saying at no point did he say we had a mortgage. I'm confused I thought this was tthe next step?? the offer was turned down and the Estate Agents have given us an idea of how much the vendors would accept and it's in our budget. I think we have now filled in an application, needed our passports and mortgage details, payslips and the like which he took away with him. He has told us not to make another offer even though he asked for the address for the form. I asked if he thought they would take the whole of the mortgage into account and he said they might. I am so confused he said he will contact us on Frid next week. In the meantime the house is in the hands of receivers, so we don't know how long we have before it would go to auction. Any ideas what happens next??? i

Hi...ask your IFA to look at let to buy, I'll say no more at present. let's see if he can work it out for himself :)

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Regards

Ian

Hi

Thank you for your reply. Would get in touch with him but he is very touchy if I call on a weekend or after a certain time at night, so don't want to upset him again... we wanted a solution that means my husband's mum and dad can stay where they are but we want our own place too.

Did you mean a buy to let mortgage for the second house? The house we are looking at buying is the one that is in the hands of the receivers (hence it's in our price bracket). Is it usual to do a full mortgage application before you have had an offer accepted on a property. We did ask him what happens if this house sells in the meantime and he just said it wasn't a problem, just a matter of a phone call to the mortgage lender. This seems odd too. Now we don't have the house under an accepted offer, and we don't know where we are in the process either! Any thoughts gratefully appreciated

Hi...not a buy to let, that would only be able to reach 85% LTV and you couldn't live there. Let to Buy will allow you to have a 95% product based on a rental assessment on the current home, of course the application has to be done properly that is why I suggest that you change your broker immediately, friend of the family or not, this is your commitment not theirs and you have to be comfortable with your adviser. I will let you into a secret, IFA's are arrogant, greedy and much too busy and intelligent to look at mortgages, you need a mortgage broker. They are far more experienced in this field and will usually know the in's and out's of lender criteria. IFA's usually stick to Birmingham Midshires because they can't be bothered to look any further. Sorry about the rant but they are useless. If by any chance when you say IFA he is actually a mortgage broker....change anyway:)

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Regards

Ian

Hi Ian

Thanks for the reply. Have been unable to contact him to ask about the Let to buy mortgage, but have looked it up on the net and was also told that my husband can't be on two residential mortgages at once. I don't think we would be eligble as my husband is listed along with his parents on the mortgage deeds. They are not moving out and we live in my HA flat. So if they own it, they couldn't be tennants...could they?

Also have been told that apparently the way Abbey works now is to send the details off to an underwriter first before they make an offer. So we don't have an offer. If thats so why do we have an A.I.P. certificate from the Abbey and why did they do credit searches? The more we are looking into this the more it's looking unlikely that we are going to get a mortgage. The Estate Agent is after us to up our original offer, which we would do if we could.

I did check he gives advice on investments,mortgages and insurance. But the mortgages are whole of market ones. Its further complicated because my mum is who would be lending us the deposit money...thats another reason we didn't want to rock the boat. But if we wouldn't get it anyway maybe we should pull out all together. If we wait for too long the house will go to auction. Anyway like i said thanks for the reply.

Hi....on a let to buy the rental assessment is used to offset the monthly payment to allow greater borrowing power for the new property. It is not necessary to disclose who is renting. There are many questions to ask and that is why I suggest seeing another broker to see whether they think the same. An agreement in principle is based on hearsay essentially, although the most important part is the credit rating. The offer is produced when the accompanying documents and valuation are tied in to the case. There are a number of questions to ask relating to the existing mortgage, the value of that house, income from all parties and many more, so the need to see someone for a second opinion is very important.

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Regards

Ian

Hi

Thanks once again for your reply. After reading what you wrote we decided to contact the broker with regard to pulling out. However, My husband checked his credit file and he saw that Abbey had done another credit search on the friday they must of had the application go through. Did check out a few more brokers but most lenders are taking the whole of the other mortgage into account. Did enquire about let to buy, but they said it was complicated...our broker has heared back from Abbey last Friday and they wanted our wageslips and he said he was a lot more confident having spoken to someone. They haven't said outright no or an outright yes but will get back to us with a definate yes or no at the latest by early next week. So someone is looking at it.

Sorry to pick your brains again but does this mean it's still the approval in principle part or would it be an offer?? we are still looking at houses as the one we like as i said before is in the hands of the receivers, but we have now seen a comparable one that we like. Is it worth still looking or should we wait, because every time we see a house there seems to be a lot of pressure from the estate agents if you say you like it to make an offer, which we can't do at the moment, especially as we now don't even know how much they would offer us. Our understanding is that the Abbey due to the currebt climate are looking more in depth than they would of before, is that the same for everyone, or is it just because of the other mortgage we have ? Thanks in advance.

Hi...until the valuation has been done and sent to the underwriter to fully assess the case you are still in the A.I.P stage. The offer is produced when all these conditions are met. The reason that you may be looked at more closely is that you are applying for a high loan to value and the lender sees this as a higher risk, same with all lenders so don't feel picked on.

Keep us posted.

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Regards

Ian

Hi Ian

Thanks for your reply. Took you advise, we are still waiting on Abbey to get back to us but got a text message from our broker who said they had promised him an answer by tomorrow. I'm not holding my breath! Have spoken to another broker although he is from an estate agency( was told not to use one from an EA) and the first thing he said was let to buy.... and that would of been his first suggestion. Went to see him yeaterday and just waiting on Abbey first. He has suggested Bristol and West. We said they had already done a check on us as there were two credit searches on my husbands file. the first mortgage broker said that B+W wouldnt lend as much as Abbey. Not sure if this means we originally had two A.I.P's....In the meantime the house we like has dropped by another 5 thousand, so it's still around. Fingers crossed that one or the other works out. Have resigned ourselves that we may loose out on that house but just want the mortgage we thought was sorted , sorted lol! We finally feel we might get some where as the new broker explains things a lot better.Thanks once again.

B

Hi Ian

Just thought I would update you. Suprise suprise Abbey have turned us down, apparently they did take the whole of my husbands mortgage into account. I 'm just glad we were prepared for this outcome.Have told our financial advisor that we are going with some one else who is looking at a let to buy mortgage. He didn't even know what one was my husband said. Yet when he spoke to me he said it was too complicated! He also seemed relieved. All I can think is that he was out of his depth but didn't want to say. So we are now going with the EA broker. We only saw him on Monday and he has kept in touch with us every day so far. He explains things in plain English and has said he will let us know by Friday if he has got us an A.I.P. Thanks so much for your advice had it it not been for that we might of given up at this stage.I do have one quick question. He did say it wasn't as straight forward as the usual mortgage, does that mean once we have an A.I.P we can offer or do we have to wait for the valuer to asses the other house first? thanks in advance

B

Hi...the main difference between LTB and a standard mortgage is that the remaining property is assessed on a rental valuation and not income, so it is important to work out if the rent would cover the interest portion of the existing mortgage payment. There are other factors to do with residency but if the broker is up to speed they will know how to make the application. We have used Skipton and Bank of Scotland for these products in the past but not sure who is most appropriate of the top of my head, but good luck and Godspeed :)

All AIP's are reliant on valuation of the property to be purchased and the rental assessment of the existing property. But in essence if you have an AIP it is fine to make the offer.

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Regards

Ian

Although Abbey don't advertise it, if the rental income on the existing mortgage would be at least 125% of the current mortgage payments Abbey can ignore this as a commitment. All you would need to do is get a letter from a local letting agent giving the rental income they think it could achieve. The broker would have to fill in 1 additional form and that's it!!