What tighter mortgage lending means to me

SirSaverOBE

Hi!

Thanks for that. The break down of the tax credits wasn't done - £2,500 is the combined total of credits and child benefit & £30k is salary.

The only thing that worries me is that if they ask for 3 months bank statements, the 3rd one will show the charge being taken for going over my limit the month before. Is this going to be a massive problem? It is the first time I had done it in a year.

Thanks for the advice - much appreciated.

Mortgagehelper

NPowerUser wrote: »

I went to an IFA a few months ago with trouble verifying my income, thank fully he was able to fast track it.

Under the new proposed system I doubt I would be able to move. The fact that I am putting up 75% of the value of the new house out of my own sale proceeds, makes me a fairly safe bet to the lender. They are lending me just 25% of the new houses value.

At the end of the day, if I default they can kick my family and I out of the new house if we defaulted and they would easily get their monies back.

Under the new proposed system, being self employed, I doubt I would be allowed to borrow very much, if anything at all.
http://www.mortgagesolutions-online.com/mortgage-solutions/news/1559021/self-employed-lose-mortgage-market-review

If you can't remortgage in 2 years time and you get stuck in a property you no longer want to live in, then I don't think you'll be that happy that your broker 'fast-tracked' your application then.

If I had a pound for every new client that comes to me with a fast track related story then I would be considerably richer than I am now.

Rule No1. If ANYONE offers you a mortgage that is 'fast track' - INSIST ON A COPY OF THE SUBMITTED APPLICATION FORM.

You will then be able to see how your IFA or Broker has submitted your information - therefore you will be fully aware of what income is stated.

Fast Track is a variation on Self Cert - thankfully now being tightened up by lenders such as RBS (shutting the door after the horse had bolted) who now insist on confirmation of income.

Fast Track was seen as a way of glazing over certain areas of an individuals income that may not have been proven.

Self Cert was only designed for the self employed - employed individuals should not have been offered it.

It's comparable to being offered three pringles out of a tin - you've had a little..now you want a lot, thanks to the MSG in the stuff.

Self Cert and Fast Tracks became like Mortgage MSG to some brokers - now the rest of us are paying for it.

SirSaverOBE

Well - had the phone appointment with HSBC tonight. What a bunch of charlatans. Seriously - after all that, with what I consider to be a really good case for a decent mortgage loan, especially now I am debt free and have over 25% deposit, they offered £83k at Decision In Principal. Apparently loads of people have had low offers at this stage and they "don't know why it's happening". They said it would be worth doing the full application as I have quite a lot of disposable income and a mortgage would basically only cost me £40 a month more than my rent does now.

Shot straight out of the sky due to "affordability criteria" What a load of crap. Isn't it strange that they are no longer whole of market? I wonder why that is? Could be so that they can lend the £1.5bn they recently pumped into the market to FTBs? I won't bother answering that.

Still - off to L&C tomorrow to get a mortgage with a trustworthy lender. I'm livid. And I'm closing my account. I've banked with the !!!!!! since I was 8 years old - thanks guys.

NPowerUser

Mortgagehelper wrote: »

If you can't remortgage in 2 years time and you get stuck in a property you no longer want to live in, then I don't think you'll be that happy that your broker 'fast-tracked' your application then.

If I had a pound for every new client that comes to me with a fast track related story then I would be considerably richer than I am now.

Rule No1. If ANYONE offers you a mortgage that is 'fast track' - INSIST ON A COPY OF THE SUBMITTED APPLICATION FORM.

You will then be able to see how your IFA or Broker has submitted your information - therefore you will be fully aware of what income is stated.

Fast Track is a variation on Self Cert - thankfully now being tightened up by lenders such as RBS (shutting the door after the horse had bolted) who now insist on confirmation of income.

Fast Track was seen as a way of glazing over certain areas of an individuals income that may not have been proven.

Self Cert was only designed for the self employed - employed individuals should not have been offered it.

It's comparable to being offered three pringles out of a tin - you've had a little..now you want a lot, thanks to the MSG in the stuff.

Self Cert and Fast Tracks became like Mortgage MSG to some brokers - now the rest of us are paying for it.

Have just passed the 3 month mark in our new home and we are managing the fast tracked (self cert) mortgage payments OK.

We will probably try and move in 2 years time as the fixed rate deal (3.99%) will end then and I forsee £40-£70 increase in mortgage payments then, as I think interest rates will have to rise soon due to the falling pound and higher fuel costs being passed on.

If we trade down to a semi in 2 years time we should be able to be mortgage free again.

Self certing was the only way I could get a mortgage due to the nature of my work and although its something I would never do again, it got me a temporary move.

I miss being mortgage free so its a big hamster wheel for the time being.

Thrugelmir

matttr6 wrote: »

Is there a need for it though?? I was under the impression lenders had already tightened up there criteria.

Surely putting down a 10% deposit is enough proof that you're able to save without delving too much into spending habits.

There isn't enough credit available to advance everybody that wants one a 90% mortgage.

House prices fluctuate and when problems arise, arrears can mount rapidly.

So the lender is taking a risk with high LTV, which is priced into the product.

Unfortunately you just have to accept that the lenders make the rules.

VIGILANT22

NPowerUser wrote: »

Have just passed the 3 month mark in our new home and we are managing the fast tracked (self cert) mortgage payments OK. Self certing was the only way I could get a mortgage due to the nature of my work and although its something I would never do again, it got me a temporary move. QUOTE]

Don't kid/confuse yourself that self cert are the same as fast track...With a fast track a lender has the right to come back and check for proof of income...

Thrugelmir

SirSaverOBE wrote: »

Well - had the phone appointment with HSBC tonight. What a bunch of charlatans. Seriously - after all that, with what I consider to be a really good case for a decent mortgage loan, especially now I am debt free and have over 25% deposit, they offered £83k at Decision In Principal. Apparently loads of people have had low offers at this stage and they "don't know why it's happening". They said it would be worth doing the full application as I have quite a lot of disposable income and a mortgage would basically only cost me £40 a month more than my rent does now.

Shot straight out of the sky due to "affordability criteria" What a load of crap. Isn't it strange that they are no longer whole of market? I wonder why that is? Could be so that they can lend the £1.5bn they recently pumped into the market to FTBs? I won't bother answering that.

Still - off to L&C tomorrow to get a mortgage with a trustworthy lender. I'm livid. And I'm closing my account. I've banked with the !!!!!! since I was 8 years old - thanks guys.

You want to borrow a £150k on a £30k base salary. A 5 times multiple on a low base salary is very high.

How would you cope if interest rates rise say 2% ?

Maybe the reason that HSBC have not faced the financial problems encountered by other lenders is that their lending has remained conservative. Possibly the HSBC are protecting you from taking excessive risk.

VIGILANT22

SirSaverOBE wrote: »

Well - had the phone appointment with HSBC tonight. What a bunch of charlatans. Seriously - after all that, with what I consider to be a really good case for a decent mortgage loan, especially now I am debt free and have over 25% deposit, they offered £83k at Decision In Principal. Apparently loads of people have had low offers at this stage and they "don't know why it's happening". They said it would be worth doing the full application as I have quite a lot of disposable income and a mortgage would basically only cost me £40 a month more than my rent does now.

Shot straight out of the sky due to "affordability criteria" What a load of crap. Isn't it strange that they are no longer whole of market? I wonder why that is? Could be so that they can lend the £1.5bn they recently pumped into the market to FTBs? I won't bother answering that.

Still - off to L&C tomorrow to get a mortgage with a trustworthy lender. I'm livid. And I'm closing my account. I've banked with the !!!!!! since I was 8 years old - thanks guys.

Maybe you consider yourself a good risk..but since it is HSBC that is lending you money, I think the decision is theirs.

Whole of market!...what are you talking about...brokers are whole of market

Quote: The only thing that worries me is that if they ask for 3 months bank statements, the 3rd one will show the charge being taken for going over my limit the month before.

Any lender who saw charges for unauthorised overdraft fees would not be happy, this does not demonstrate good credit conduct.

Thrugelmir

VIGILANT22 wrote: »

Any lender who saw charges for unauthorised overdraft fees would not be happy, this does not demonstrate good credit conduct.

Savings yet running an overdraft is a poor indicator of financial mangement skills to a lender.