Will a mortgage lender take in to account a very near pay rise?

ollyfarrow

I am a teacher and my pay rises in September by £2500, which means the amount I can borrow in 2 months is more than I can borrow now.

However I need the the full amount (taking my pay rise in to account) to be lent to me now.

If I have a document from the my school confirming my pay rise, signed by my headteacher, will they take that into account when figuring how much they will lend me?

I really hope so!

Any Ideas?

beecher

Didn't you say on another thread that you've already put an offer in for a house? So don't you already have a mortgage offer in place? If so phone your lender and ask them if they would take your impending pay increase into account.

ollyfarrow

beecher wrote: »

Didn't you say on another thread that you've already put an offer in for a house? So don't you already have a mortgage offer in place? If so phone your lender and ask them if they would take your impending pay increase into account.

It was declined due to my partners poor credit. I'm now having to put the mortgage in my own name, hope they take my pay rise into account, and up the deposit by 8k.

I AM STRESSED!

beecher

ollyfarrow wrote: »

It was declined due to my partners poor credit. I'm now having to put the mortgage in my own name, hope they take my pay rise into account, and up the deposit by 8k.

I AM STRESSED!

Hmm, I'd pull out of the purchase if I were you, save more on your deposit and by then you'll have your extra 2k. Why the desperation?

ollyfarrow

beecher wrote: »

Hmm, I'd pull out of the purchase if I were you, save more on your deposit and by then you'll have your extra 2k. Why the desperation?

Very long story.

We've been looking for a house for six months now. At last we found the one we want after seeing about 30 different homes.

They sellers had three different people all offer around the same amount on their property - £242,500. They only chose us because we are ftb with no chain, the other two offeres we in a chain.

We have a £116,250 deposit in the form as a 'gift - loan' from my father. 20k is a gift and the 100k is an interest free loan over ten years. After ten years there is 3% on whatever I still owe - he wants all of the 100k back with 15 years.

A couple of months back we had an AIP approved through HSBC - Just to see how much they would lend us and to see if our credit was good. I now know that was a bad move.

About 3 weeks ago we payed to get a credit report on my partner as we were worried about a couple of issues. It turns out she has a CCJ registered from Jan 2005.

Yesterday HSBC turned down a new AIP due to my partners poor credit.

I rang HSBC this morning and spoke to another advisor. They said they would take my pay rise in to account as long as the underwritters were happy with it, ie; all the correct documenation is there - which it will be.

They now say that they are willing to lend me £119,250 - which means I have to increase my deposit by 7k to £123,250. Thankfully my father said he will lend the extra 7k so that we can still get the house on a decent rate. I am going for the 7 yr fix at 5.29%.

It was either this, or take out a sub prime mortage at a terrible rate of 7% or so, or lose the house.

Hope that explains!

HSBC are ringing me back later to complete the full credit check. Fingers crossed.

Wakey2008

Some lenders will take a payrise into account providing you can prove it. They will require details from your employer stating how much your pay will rise to and when it starts.

Thrugelmir

ollyfarrow wrote: »

Very long story.

We've been looking for a house for six months now. At last we found the one we want after seeing about 30 different homes.

They sellers had three different people all offer around the same amount on their property - £242,500. They only chose us because we are ftb with no chain, the other two offeres we in a chain.

We have a £116,250 deposit in the form as a 'gift - loan' from my father. 20k is a gift and the 100k is an interest free loan over ten years. After ten years there is 3% on whatever I still owe - he wants all of the 100k back with 15 years.

A couple of months back we had an AIP approved through HSBC - Just to see how much they would lend us and to see if our credit was good. I now know that was a bad move.

About 3 weeks ago we payed to get a credit report on my partner as we were worried about a couple of issues. It turns out she has a CCJ registered from Jan 2005.

Yesterday HSBC turned down a new AIP due to my partners poor credit.

I rang HSBC this morning and spoke to another advisor. They said they would take my pay rise in to account as long as the underwritters were happy with it, ie; all the correct documenation is there - which it will be.

They now say that they are willing to lend me £119,250 - which means I have to increase my deposit by 7k to £123,250. Thankfully my father said he will lend the extra 7k so that we can still get the house on a decent rate. I am going for the 7 yr fix at 5.29%.

It was either this, or take out a sub prime mortage at a terrible rate of 7% or so, or lose the house.

Hope that explains!

HSBC are ringing me back later to complete the full credit check. Fingers crossed.

More as an observation. But the combined mortgage and loan suggests that there's no equity in the property, ie deposit by yourselves.

Property prices are more likely going to fall yet. The Newcastle BS offers 5% on savings.

Just a thought.

Cannon_Fodder

30 houses is nothing...take your time.

As an FTB, you aim to deliberately over-extend yourself to buy a near quarter-of-a-million-pound house with £38.5k total income, a multiplier of 6.3 - that is madness.

(On your other post you mention your salaries... http://forums.moneysavingexpert.com/showpost.html?p=23303831&postcount=1 )

Have you done the maths on the total monthly outgoings? - although its 0% interest, it will still take more than £500 a month over 15 years to repay your father's loan, alone.

£725 for the other £119k...that is at the limit of normal affordability, on its own. Have you mentioned the loan of the deposit? Do mortgage brokers know whether such a liability has to be declared to the lender? I'm not sure.

So, £1200+ a month, just for the mortgage and loan, with no bills/food etc...

i.e a £20k income before tax, just to pay the total debts
i.e. a newly qualified teachers entire wage, just to pay the total debts.


Wonderful as it is of your father to stump up nearly half the house, for now, at the end of the day you need to be able to afford to repay it - there is little worse than a family argument over money - and if you have been unable to contribute any portion of the deposit, as appears to be the case from comments so far, then the likelihood of having spare cash to make dents in £100,000 - before you have started a family etc - should be of severe concern.

Please do not over-extend yourself. Think again.

beecher

CannonFodder gives some really good advice there - I think the situation you're getting yourself into is very very risky and I can't understand the desperation to buy somewhere now which you can't really afford. Why your are buying a quarter of a million pound house when you're just starting out is beyond me - I'd feel it was a millstone around my neck. Why not just save and do it by yourself, with the 20k gift?

ollyfarrow

Cannon_Fodder wrote: »

30 houses is nothing...take your time.

As an FTB, you aim to deliberately over-extend yourself to buy a near quarter-of-a-million-pound house with £38.5k total income, a multiplier of 6.3 - that is madness.

(On your other post you mention your salaries... http://forums.moneysavingexpert.com/showpost.html?p=23303831&postcount=1 )

Have you done the maths on the total monthly outgoings? - although its 0% interest, it will still take more than £500 a month over 15 years to repay your father's loan, alone.

£725 for the other £119k...that is at the limit of normal affordability, on its own. Have you mentioned the loan of the deposit? Do mortgage brokers know whether such a liability has to be declared to the lender? I'm not sure.

So, £1200+ a month, just for the mortgage and loan, with no bills/food etc...

i.e a £20k income before tax, just to pay the total debts
i.e. a newly qualified teachers entire wage, just to pay the total debts.


Wonderful as it is of your father to stump up nearly half the house, for now, at the end of the day you need to be able to afford to repay it - there is little worse than a family argument over money - and if you have been unable to contribute any portion of the deposit, as appears to be the case from comments so far, then the likelihood of having spare cash to make dents in £100,000 - before you have started a family etc - should be of severe concern.

Please do not over-extend yourself. Think again.

Thanks for the concern and I can see why you would suggest to not taking on so much.

Most people start off buying a little 2 bed terrace or maybe a flat. Then, depending on their circumstances they aim to move every ten years (give or take) and move up the property ladder as their wages increase.

We are just jumping the queue. You could say that instead of starting off on rung number one of the property ladder we are starting off on rung number 3 or 4.
Effectively we are buying a house that we are going to stay in for the next 20 years. That is why it was very hard to find a property that suited our needs and was 'future proof'.

The 1ook loan from my dad will be repaid off, not each month, but in the form of an affordable remortgage when we can afford to do so. For instance; if after ten years most people move out of their terrace and buy something bigger, we will just remortgage a higher amount against the property and give the equity to my dad.

If most people move up the property ladder 2 or 3 times during a 15 year period, we won’t move at all, but we will take on a higher mortgage at different stages to pay my dad back.

The 20k gift is only a gift to help with getting a house. It is not as if I could turn around to him and say 'actually forget the house, but can I still use the 20k to a new car?'.

I can see why my arrangement might seem odd to an outsider, and I suspect that I haven’t explained it properly. As far as I can see, my dad is being very generous in trying to help me out. My dad works in finance and would not be giving me bad advice. He does not expect monthly payments on the 100k loan. We would be paying a monthly mortgage of £660 with a joint net income of £2230. To me that looks pretty good?

We are at a time when you can buy a four bed detached house in a good area for 250k. We wouldn’t have been able to do that 18 months ago.

The opportunity has presented it self and we have taken a chance. Remember, more is lost through indecision than wrong decision!

I do appreciate all the feedback I get on this forum and I suspect that shortly I will be asking for more!

ILW

ollyfarrow wrote: »

Remember, more is lost through indecision than wrong decision!

!

Think someone has been reading the motivational self help books.