Do I Have To Tell My Mortgage Broker How Much Deliveroo I Order? And Other Awkward Mortgage Questions Answered…

Oh hello you at the back, we didn’t see you there in the shadows. Did you want to ask something? Don’t be shy! Welcome to the Annual Awkward Mortgage Questions Q&A with your friendly property experts. If you have a burning query to ask but don’t know where to begin, you’ve come to the right place. We’re here to answer the questions you don’t want to ask. Get out your notes app and let’s begin!

1. Will I have to show my broker how much Deliveroo I’ve been ordering?

Great question. In short, yes. It’s pretty darn awkward to say the least, but unfortunately those brokers just love to know what burger toppings you chow down on and how much you pay for your pepperoni slice of a Saturday eve. If you paid 99p for a horoscope app, guess what? They want to know about it. Which, of course, pertains to monthly subscriptions such as Netflix and that old Pokémon game you forgot you’re still paying for too.

Our advice? If your finances aren’t exactly glowing right now, start to get on top of your budget. Demonstrate your ability to consistently live within your means for three to six months prior to applying. Also, pay off your debts and basically spending less. Nosey old brokers. Makes you want to invite them round for a curry and crime thriller binge so they can really get to know where your money’s headed. No, Brian that is NOT a genuine invite, please vacate the driveway with your horrible fine tooth comb.

2. I’m buying with my partner – what happens to the mortgage if we split up?

Oh Jean, thanks for asking. As awkward mortgage questions go, this is an easier one! We do hope you and Billie are doing well and won’t need the following advice. However, if things get rocky and she just can’t stand your noisy eating any longer, we suggest getting a tenants in common agreement. This takes into consideration how much of the mortgage each of you paid, since it’s rarely a clean 50/50 split. Any increase in equity to the property and the contract is drawn up accordingly. This means you can sleep soundly at night knowing everything is fair, assuming you can put up with her ear splitting snores of an evening. Wow. Hats off to you both and good luck, what a profoundly irritating couple you make.

3. What should I avoid doing in the run-up to getting a mortgage?

Another cracking question. We touched on this earlier, but let’s go into more detail. Basically, live like a monk for a few months prior to the application and you’ll fare well. That means paying off and closing overdraft facilities, drinking lots of mead and chanting. Sort of. Maybe cut down on the mead and the more expensive wine purchases. Lay off the takeaways, taxis and online lockdown splurges and
don’t take out any new credit.

If you need to make a large purchase try to wait, and avoid making larger deposits or withdrawals. You’ll look as dodgy as a dog sitting on the kitchen floor surrounded by spilt pasta. You don’t want to be rejected for a seemingly small and inane reason, so be strict with yourself and finances and avoid buying that influencer’s lash growth serum that doesn’t actually work anyway and leaves your eyes bald and crying.

4. What happens if I can’t afford to pay my mortgage?

Heavens to Betsy it can be a real nightmare if you find yourself in such a position. The worst thing you can do, however, is ignore it and pretend it will go away. It won’t and there is help available if you know where to look and who to ask. Get in touch with your lender as
soon as you can to let them know you’re having issues meeting repayments. They may offer to defer a payment, allow you to take a payment holiday or even extend your mortgage term so that your repayments are more manageable.

If you’re having serious problems paying your mortgage and are in real danger of losing your home, please breathe and know that all is not lost. The Support for Mortgage Interest (SMI) scheme provides help with mortgage interest payments to some people on certain state benefits, for example, and is well worth looking into. Lockdown hasn’t been easy on most of us financially and lenders know this. If COVID-19’s impact on your remortgage is a concern, have a read of our guide to this exact issue by clicking here.

5. I’ve taken out a loan my partner doesn’t know about. Will I have to declare it on my mortgage application?

Oh dear David, what have you been getting up to? This is one of the more awkward ones of all the awkward mortgage questions. If you’re looking to get a mortgage with your partner it’s probably best to be upfront and truthful from the beginning about your finances. If you haven’t missed a payment, it can work in your favour that you’ve been making consistent monthly repayments. When applying for a joint mortgage, you will have to fill in the application together, giving details of income and expenditure on the same form and with the same biro (not quite, but still). Therefore it’s unlikely you’ll be able to hide your loan details, but you won’t necessarily need to give the total size of the loan if that’s what you’re worried about.

Was the motorbike really worth it Davey? Hidden away in a separate garage? Maybe Raymond likes bikes and secretly wants to take a trip to the seaside on the back of a Harley after all. Our advice? Live your best life and come clean.

6. I’m in a lot of debt, can I still get a mortgage?

All is not lost in this scenario, no! Calculate your debt-to-income ratio first of all. The amount you spend on repayments each month is a big factor in applying for a mortgage, affecting the amount you can borrow and the number of lenders who will consider your application. If you’re in a position to pay off some of your debts before applying, or could set up a repayment plan, this will work in your favour. We recommend approaching a whole-of-market broker to help you find the best deals for clients in your position, which are harder to find by yourself.

Can you remortgage whilst in debt? Well potentially you can, yes! You are assessed in exactly the same as you would be for a primary mortgage. There are such things as a debt consolidation remortgage for example, but maybe speak to a professional (hello!) before making your decision. We love talking shop and answering all your awkward mortgage questions in person.

7. I’m self-employed and pay myself in dividends – what does that mean for my mortgage?

Well Susan, it depends what type of self employed superstar you are firstly. As a company director, for example, your accountant may suggest you take a salary up to the tax-free threshold, and then dividends for any other income. Do take into consideration, however,
that if your company has made a profit of £200k and you have only paid yourself £40k through salary and dividends, lenders will consider your income to be £40k. It does take more specialist knowledge of niche alternatives to find a suitable lender for people like you Susan. Taking into account that tax liability is lower with dividend income, there are some lenders willing to lend more than usual, knowing you therefore have more cash in your swanky little pocket each month.

When it comes to driving your income as a limited company director, you’ll definitely need finalised accounts and/or SA302 from HMRC or accounts reference. You’ll also usually need to show your last 3 months business and personal bank statements. It all depends on the individual lender, but you’ll be in good stead with those documents up to date. I hope that answers your question, Susan. Any more eye wateringly tedious queries from the front? No? Thank the sweet god of brokers above. You can have a read of our guide to getting the self-employed on the property ladder by clicking here though.

That brings us to the end of our Annual Awkward Mortgage Questions Q&A at Davies & Davies HQ. We hope you’ve enjoyed yourselves and leave us today with a slightly less panicked look in your eye and sweat on your brow. It can be a laborious process as we all know, but it doesn’t need to be embarrassing and stressful.

If you have any more questions and need some advice with your mortgage situation, don’t hesitate to get in touch!

Contact us:

alex@daviesdavies.co.uk – Lettings Director (contact for lettings and property management)

mark@daviesdavies.co.uk – Sales Director (contact for sales, new homes and chartered surveying)

020 7272 0986

Davies & Davies Estate Agents, 85 Stroud Green Road, London, N4 3EG

Article & images by Barefaced Studios