Mortgages
BeccyJayne2247
Posts: 589 Forum Member
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We are thinking of applying for a mortgage. I know we are likely to be interrogated but does anyone know if it's going to be as bad as it's made out to be?
I'm just wondering what questions we will get asked!!
I'm just wondering what questions we will get asked!!
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all the things you would expect really
It might be worth going through any direct debits you have and cancel any that you can do without (at least for a while) such as gym memberships, extended warranties and Sky Sports subscriptions.
Well 'they' used to without any question not that long ago and thats part the reason why so many banks were in the mess they were.
Seems that it was good enough for them when they wanted their huge bonuses eh
They didnt pry on what we spent our money on in regards to hobbies, activities etc.
Starting this week, they do: http://www.bbc.co.uk/news/business-27128734
Why? Stuff like that is normal for people to be spending their own money on. As long as your outgoings aren't crazy and you can easily afford the mortgage this advice isn't sound in my view.
When we applied a year ago they didn't question any of our direct debts. In fact the only thing they questioned was the sum of money my other half was putting in my account each month, which were odd amounts like £356.35. We just explained most of our expenditure is on my AMEX card and we split the bill once a month.
However, Im not sure how they determine the truth out of that from bank statements, we get all our shopping, petrol etc on cards and its usually from sainsburys. How do they know that we're not spending thousands a month on food whereas its actually food and petrol with petrol taking the major share?
We never use cash, we have direct debits for everything else. I think there might be some payments for just eat and amazon for bits and bobs.
http://www.independent.co.uk/money/mortgages/how-to-get-a-mortgage-guide-for-firsttime-buyers-9288480.html
http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/10787176/New-mortgage-rules-the-questions-you-will-be-asked.html
I only have 8 years left on my mortgage and my fixed rate period is coming to an end. I phoned my lender last week to discuss a new fixed rate (as I had done every time previously when the fixed rate period was due to expire) rather than allowing the mortgage to lapse into the variable rate, with all the signs and rumours about rates rising in the near future. Usually, this involves a 10 minute conversation and subsequent sending off of the necessary paperwork but, last week, I had to undergo a 90 minute telephone ''interview'' to discuss my options and answer some of their rather silly questions. I asked why this was necessary and they just kept repeating there were ''new rules'' in a rather jobsworth fashion.
For example, I was asked why I was looking for the cheapest fixed rate available with no fees attached? Why was it important to me to pay as little as I could every month? Could I not afford a higher rate? I patiently explained that, although I could afford a higher variable or even fixed rate, surely the purpose of my call was to look for a deal where I wouldn't have to pay a higher rate. I explained that I believed most people with mortgages want to pay a lower rate rather than a higher rate.......... I accept that it was then explained that there are mortgages which may cost more but are more flexible, allowing breaks and loan-backs, early repayments etc - but I had made it very clear at the outset of the conversation exactly what I wanted and that I had never needed or was likely to need that facility.
I was asked lots of questions about what I was going to do in the future, what savings I had, lots and lots of repetitive questions in order to take up the specified length of time. There seemed to be a lot of time-wasting with a lot of ''small talk''. I was asked about my career as a nurse and whether I enjoyed it (I have never had any other job so can't compare), nothing was asked about my salary even though I had said, in response to wanting a cheap deal, that the government hadn't given nurses a pay rise for 4 years.
I have been an exemplary mortgage payer my whole home-owning life, I have always paid by direct debit and have overpaid on occasions (within what I was allowed to do) yet I still had to ''endure'' this rather arduous and tedious interview.
It was all fine in the end because I have a better fixed rate deal that I had before, saving £40 a month. However, I had to wait until the very end of the interview before I was informed that that particular offer was available to me. I was kept in suspense for nearly 90 minutes!
interesting, when we did an agreement in principle with the norwich and peterborough, they wouldnt allow the answer '0' for
haircuts, socialising, holidays, personal grooming
My OH and I cut our own hair, we only socialise by going round people's houses or them coming round ours, we dont go on holidays and dont do 'personal grooming'.
My word...
I can't help but think...
Beardie, dreadful teeth, bad BO and a minge down the knees.
well if we are being pedantic, toothbrushes and toothpaste are included in the groceries cost, as is soap, shower gel and deodorant. Ive got make up older than an antique fair and never wear it anyway.
I do have a spec savers direct debit though for my contact lenses
So split out the cost from grocers to grooming.
Otherwise people like me will think you are dirty,
But the responses will be meaningless. It is impossible to determine someone's ability to pay a mortage up to 25 years in the future. They can also suddenly acquire expensive habits the day they move in to their new property.
The mortgage company's interests are protected by the charge they put on the property, and by the large deposit they now expect (to buffer them against depreciation).
Of course the answers will be meaningless. It's just an arse-covering exercise by the banks. But those are the new rules and arguing with them isn't likely to help your case. People just need to learn how to play the system.
I dont care! Personal grooming to me is things like tanning, waxing, hair cuts and dyes, nails and pedicures. Soap and brushing teeth are just basics
Some of those questions are rather personal and intrusive, I mean can they really ask you whether you intend to start a family or have more children. Many people don't intend to do either but have accidents. And my pet is my business not the banks she doesn't affect my ability to pay my mortgage.
I think I may have to start keeping all my receipts so that when it comes to us moving we can break everything down for them. I remember going to the CAB when I was sorting my debt out years ago so I know how to write the sort of budget they want but even so it's a pain in the backside having to work out how much you spend on "personal grooming" or clothes when you usually buy clothes when you need them and not every month.
Unless you have money to burn my advice is that everybody should be keeping a detailed budget. Check MSE, they have a very good spreadsheet (along with some good money saving tips) with over a hundred pre-defined categories. It easier to fill over the course of a month but you could do it in a few hours if you are organised. Once filled then its very little effort to keep it updated and you would be surprised where you can target savings.
http://www.moneysavingexpert.com/banking/Budget-planning
I haven't done a recent mortgage application but I guess they want to see what outgoings you have a commitment to rather then discretionary spending ?