Mortgage query

Pibroch

Just looking for some advice - beginning to get a bit worried. Prior to looking at properties and then submitting an offer, I had an IFA come visit. I then received from him an email which said he had received an agreement in principle from a Building Society for £127000.

Following on receipt of that email, I then offered for a house at £159000 - I have a deposit of £32000 to put down so it is the £127000 that I need to borrow.

The IFA is now saying that this Building Society will likely not take my yearly bonus in to account (which is normally around £10,000) and so he doesn't think I should apply for my mortgage there after all and is currently trying to get one for me somewhere else.

I am beginning to worry now that I have committed to buy a property and now won't get a mortgage.

My salary is £25500 - yearly bonus of £10000 and overtime which differs from month to month depending on what work is required - can sometimes be £300 a month, sometimes £600 and sometimes £800 a month but possibly one or two months of the year with nothing. My P60 from last year shows I earned £42000 and I have 3 years worth of P60's showing similar figures.

I also have a partner who will not be in the mortgage with me but who pays their way and has a direct debit in to my account of £500 - I'm not sure if this can be classed as regular income or not?

I'm due to settle in 3 weeks time and really beginning to feel sick. Can anyone out there offer me any advice? Am I likely to get a mortgage?

If worst comes to worst, I could possibly get away with only borrowing £120,000 as my parents could lend me the surplus £7,000 but I would ideally like to avoid that if possible.

I am based in Scotland in case this is relevant.

luckyfool

Based on the circumstances you outline I don't see a problem and this should be placeable. Have you concluded missives (i.e. are you legally committed to buy)?

This is really the danger in using an IFA as opposed to a specialist mortgage broker, the term jack of all trades but master of none potentially springs to mind. A good broker will know all the lenders criteria inside out and would have placed this with the right lender on day one, an ifa who does pensions and investments etc. where mortgages are a small sideline is never going to have the same product and lender knowledge.

Pibroch

Hi many thanks for your reply. Yes the missives are all concluded and I am now in a contract to buy. I did this based on the fact that I received the email confirming that an AIP was received. I have to say, your response has reassured me a little. I have no adverse credit. One credit card which I pay off regularly so really nothing bad should be on my credit reports. If all else fails, would you recommend I apply direct to my Bank for a mortgage rather than through the IFA? Or can you recommend anyone I should apply to?

Thanks again for your response.

luckyfool

Well you are kind of running out of time in terms of looking to get an offer in place if you need to settle in 3 weeks time. If your IFA cannot come back to you now with a lender that will definitely do it, and cannot give you some confidence that they know what they are doing then I would be moving on and getting a new broker and getting things moving. What has been happening up until now if you are 3 weeks from completing. Did an application go in with another lender? Has the IFA been dragging things out? Or did you commit to a 4 week turnaround from start to finish (tough at the best of times)... and are only a week in?

Going straight to your bank may be a waste of time as some have very strict criteria on bonus income. Who do you bank with anyway?

Pibroch

It was 6 weeks from purchase to settlement and then I was offshore for some time two weeks in a row (which coincidentally will give me more overtime/bonus money this month) and its only now that I have been able to get all my paper work to him.

I bank with RBS/Halifax.

It's 3 weeks on Friday till settlement date.

herbiesjp

Either your IFA comes up with something tomorrow, or you need to find a good broker who can get you a deal agreed asap!

TrickyDicky101

Nationwide took in to account my annual bonus when assessing how much they could lend me. This was last week. I was an existing mortgage customer with an unblemished 5 year payment record, however, in case this is relevant.

luckyfool

It's one thing taking bonus income into account, how much they take into account is key. I.e. It can vary from zero to a more common 40-60pct to even 100% with some lenders.

TrickyDicky101

For me it was 100% of bonus (bonus only makes up a relatively small fraction of my total remuneration though - approx 10%) and max mortgage they would advance was at 4 times salary (not that I wanted to borrow 4 times or even 3 times).

Pibroch

I said my bank was RBS - it's not it's Halifax Bank of Scotland. I'm so tempted to make an appointment with them direct. Would anyone recommend this?

I'm still waiting to hear whether the application made on my behalf by my IFA has been approved. He has applied to the Abbey as his advice to me was they would take my bonus in to consideration. Although they asked for my 3 latest pay slips which unfortunately don't have a lot of overtime on them as this was over my holiday period and I only had a couple of small trips offshore. This month I've had a lot of days offshore and I also get my non smoking bonus so should have a good payslip this month but of course, they won't see that.

Hopefully I'll get a response from my IFA today

luckyfool

Halifax will only use 60% of bonus/overtime income, and even then only if you can prove it recently.
Abbey will use up to 50% of overtime.

As I've already suggested earlier, you seem to be wandering around in the dark at the moment, and your IFA seems to be picking lenders at random to submit applications to. You need a good whole of market broker to sort this out for you yesterday and put it to the right lender first time.