Last minute glitch in mortgage application

halfajack

I applied for a mortgage through a broker over a month ago. I'm a supply teacher in Scotland and have worked continuously on long term contracts for three years. The broker said this would not be an issue and that, as a professional, it's the history of continuous work that's important, especially since I had a 25% deposit. I had a mortgage agreement in principle approved for more than I needed. I put an offer in on a house which was accepted and applied for the mortgage. Now, seven days from my move in date, it seems the lender is not happy with my employment status. They've said if I send two years P60s and a note from a local authority saying I'm on their supply list my case will be passed to someone higher up for a decision. I spoke to the lender directly and was told they wouldn't normally loan to someone on a temp contract. I told them the broker knew my status from the start and I had the agreement in principle based on that. They said they were only aware of my temp status when they received my reference from my employer. They implied my broker may have entered my information wrongly in the hope they wouldn't ask for a reference.

What can I do here? I'm terrified I will lose out on the house and will be liable for legal fees regardless. I feel I've been terribly mislead. My partner has also terminated the lease on his rented flat and his landlord has tenants ready to move in next week! I also imagine a rejected app will affect my credit rating.

Thrugelmir

Suggest you take the matter up with your broker. In an attempt to get to the bottom of the matter.

opinions4u

halfajack wrote: »

. They implied my broker may have entered my information wrongly in the hope they wouldn't ask for a reference.

Did you read what you signeed?

What can I do here? I'm terrified I will lose out on the house and will be liable for legal fees regardless.

At this point in time, deal with the broker. It's his job to support you and get the case to offer. If it does all go wrong, re-post at that stage. You're not there yet.

My partner has also terminated the lease on his rented flat and his landlord has tenants ready to move in next week!

To be honest, without a mortgage offer in place that is premature. Unless the decision was made with a back up plan.

I also imagine a rejected app will affect my credit rating.

Any rejection won't be recorded on your credit file. Any searches relating to an application will remain.

halfajack

opinions4u wrote: »

Did you read what you signeed?


At this point in time, deal with the broker. It's his job to support you and get the case to offer. If it does all go wrong, re-post at that stage. You're not there yet.

To be honest, without a mortgage offer in place that is premature. Unless the decision was made with a back up plan.

Any rejection won't be recorded on your credit file. Any searches relating to an application will remain.

Yes, I read what I signed. I've also just checked my copy and it says 'fixed/short term' contract which is true. I will phone the lender again to see why it seems they thought differently.

yes, I realise it was premature for my partner to give up his flat but this was only dome after the broker repeatedly said there would be no problem and the mortgage agreement was approved in principle. It's probably irrelevant really but I added this info to emphasise how let down and stressed I feel.

I will continue to get the broker on the case but also phoning other banks to ask for likelihood of an offer.

Thanks for replying.

Thrugelmir

halfajack wrote: »

Yes, I read what I signed. I've also just checked my copy and it says 'fixed/short term' contract which is true. I will phone the lender again to see why it seems they thought differently.

An AIP is not a mortgage offer. A mistake many make.

I would have thought that the broker should have confirmed your employment status with the lender before submitting the full application.

halfajack

I know an AIP is not a mortgage offer. However, I do have a piece of paper saying a loan is available to me subject to satisfactory assessment of propery (done).and the information being supplied is correct (it was, on my part). I made it clear from the start I did not even want to apply for a mortgage if my employment status might be a problem.

I want to get this resolved with current application but am also consulting other banks on probability of being offered a loan. Yorkshire Building Society most positive so far and they're just waiting for me to give the go ahead. I just hope the seller is prepared to wait and won't put the house back on the market.

holly_hobby

I have to be honest, as a none standard employment basis (contract as oppossed to FT Perm), the broker should really have gone for a full app, or spoke directly to the BDM/underwriter to get the ok for this - rather just an AIP/DIP.

If the broker has mis-represented your position to the lender - thats for you to take up with them directly - the fact you told the broker the details of your contract, which they may not have correctly relayed to the lendery , won't persuade the lender to ignore or accept the issue. (although fixed/short term contract you say the app noted, is pretty clear really !)


However, whats done is done ...

The lender will want to reassure themselves that your ability to service the mge, should not be significantly affected by the nature of your employment.

The fact that you are employed on a contractual basis, is strenghted by the fact that your position is one of a professional (teacher), a profession (that could be argued) there shall always be a need and demand for, with a current contract that has been renewed x amt of times with your current employer/education authority.

ALSO

Try and promote the fact that even if your contact ended with the current employer, you would easily obtain another or indeed a permanent position due to the nature and demand of your profession.

Try & see why the lender may feel uncomfortable with the basis of your employment, and what info you would want to know if you were the underwriter on the case - then give the details you think will support and give strength to your application.

Your broker should be liaising on this - and should already be taking the route suggested in his appeal to the lender.

Hope this helps

Holly

halfajack

Thanks for your constructive reply, Holly. Very encouraging. I'm hoping to get a decision tomorrow. If it's a no I'll start again with another bank!

holly_hobby

Thats ok ..

I will always endeavour in every instance to give guidance and positive assistance and comment to the OP - and if I am unable to do either I don't post.

Do let us know how you get on ... I've everything crossed twice for you !!

Best wishes

H x

halfajack

An update and further query...

There is still no decision. I've been calling every day and keep being told I SHOULD definitely hear by the close of day. Getting lots of pressure from the seller now. Can I apply for another mortgage before hearing the decision on this one? I'm getting very anxious and would want to get the ball rolling asap if I have to apply elsewhere - not sure even then the seller would wait.

halfajack

The plot thickens! I phoned the bank which was more positive before and have been told now they'd really need me to.have my contract renewed for 12months. Can anyone recommend a bank offering mortgages to temp workers? I'm contracted til December, can prove full time continuous work since August 2008 and prove I'll be considered for work by two local authorities come December. Any suggestions much appreciated!