Help, need a lender who will consider rental income!

caph

Hello

We currently have a Halifax mortgage and contacted them to see how much we could borrow (£305,000 we were told). Have now sold my house put an offer in on a new house (need mortgage of £190K so well under the amount we could borrow). Applied with the Halifax, who took all our details, wrote for employers references, sent the surveyors out and have taken the money out of our bank account for the fees etc. Everything was going well and were looking to complete next month.

Now, 6 weeks later, we have now had a letter (not a phone call!) from the Halifax saying that they can no longer lend the £190k but now only £86k! the reason being that my partner, in addition to his full time job, has a rental income business with another person, (which in todays market is making money). After agreeing to the figures submitted by the accountant, Halifax are now saying that it is their company policy not to include rental income in the calculation of earnings, but to include the mortgages on rental properties in the debt calculations! On that basis he has negative earnings!!!!!!!!!!
this seems crazy and we are furious with them, as they never mentioned this when we first enquired nor when we applied.

Does anybody know if there is a lender out there who will include rental income???? We are desperate due to the ever approaching completion date!

Ps i am fighting now to get my fees back too!

Wh05apk

That's news to me, according to their policy they accept rental income:

"Rental incomeProperty is currently let - obtain one of the following:
3 months bank statements, tenancy agreement, letter from letting agent, accountant or solicitor.

Intending to let existing property - obtain letter from letting agent confirming expected rental payment.
Letting agents are required to be ARLA or NAEA registered.
Documentary verification of the other income keyed

Rental incomeProperty is currently let - obtain one of the following:
3 months bank statements, tenancy agreement, letter from letting agent, accountant or solicitor.

Intending to let existing property - obtain letter from letting agent confirming expected rental payment.
Letting agents are required to be ARLA or NAEA registered.
Documentary verification of the other income keyed"

I think you need to go back and clarify this.
Most lenders will accept rental income, usually the excess of 125% of the mortgage payment.

Thrugelmir

caph wrote: »

Halifax are now saying that it is their company policy not to include rental income in the calculation of earnings, but to include the mortgages on rental properties in the debt calculations! On that basis he has negative earnings!!!!!!!!!!

When you say rental properties, how many?

kingstreet

I have a case recently offered by Halifax where the applicant has three BTLs and Halifax are taking both the mortgage payments into account as credit commitments and taking the income into account as well.

caph

They have seen accounts, bank statements, reference from letting agents etc all on application and it wasn't a problem then, but now that is the reason they are using for not lending. Where did you quote that statement from, please?

He has 3 properties in his own name all mortgaged to between 60 and 75% and 6 in joint names with his business partner again all mortgaged to max of 80%.

Wh05apk

From the criteria posted to brokers.

Like Kingstreet, I have recently done a mortgage with a btl in the background, and they accepted the income/commitment.


As I said, you need to go back to Halifax, and query this, raising it up the food chain until you find someone who can read their policy, or explain wht they won't accept the income.

Thrugelmir

caph wrote: »

They have seen accounts, bank statements, reference from letting agents etc all on application and it wasn't a problem then, but now that is the reason they are using for not lending. Where did you quote that statement from, please?

He has 3 properties in his own name all mortgaged to between 60 and 75% and 6 in joint names with his business partner again all mortgaged to max of 80%.

This would have been reviewed by a senior underwriter, as they alone would have the authority on making a decision.

With exposure to 9 mortgages there's an inherent risk in the current economic climate that like a house of cards, the whole lot could come tumbling down.

Conrad

Wh05apk wrote: »

From the criteria posted to brokers.

Like Kingstreet, I have recently done a mortgage with a btl in the background, and they accepted the income/commitment.


As I said, you need to go back to Halifax, and query this, raising it up the food chain until you find someone who can read their policy, or explain wht they won't accept the income.

My understanding is that whilst they will ignore the b2l mortgages where rental is sufficient, they wont ALSO use this rental income as part of an applicants income for a new mortgage.


Classic case were a good (non call centre) broker could help, as the framing of the application is all important.

OP - I'm sure you'll get a mortgage, just find the right broker. Beware those that just plough on with a big robotic questionaire - you need someone with a brain here.