Agreement in principle

rach83

Hi

We have today got an agreement in principle from Santander.

We told our broker that we thought we would need a mortgage of £126,000 to buy a house for £140,000 with a £14,000 deposit. The agreement in principle states that they are prepared to lend£130,500.

I'm a bit nervous as the agreement in principle is based on OH salary alone. His wages can fluctuate as a large chuck of his salary is commission. I'm worried that if OH's salary changed too much between now and mortgage offer stage it could ruin our chances. I gave all the appropriate income info to our broker and the bank have come back with a higher figure than we anticipated. I can't contribute towards the mortgage at present as I have been on maternity leave and have a small debt. I will however be putting up the deposit money with a view to going on to the mortgage in 5 years time.

Has anyone got any experience of obtaining a mortgage with a basic + commission salary?

Cheers

GMS

You providing the deposit monies and not party to the mortgage will mean a decline with Santander.

Your broker should know this. Why you have a Decision in Principle for more than you need I don't know as you will now need another to reflect the correct loan and purchase price.

Could you not go on the mortgage as a zero earner?

Dave_Ham

This is a strange chain of events.

Santander is a strange selection for a mortgage that requires the calculation of commission. They hate it and never accept it laying down, so expect multiple requests.

Also, from memory and bar one client recently have given Santander the swerve lending wise but I am with GMS that the AIP for them just states the amount keyed rather than the total amount available - I may be wrong here, but the first point is fact..

If you are on maternity, I assume you were working and have a contract of employment somewhere. If so, many lenders will accept this income so long as you can clarify a few issues around how and when you are returning to employment.

Aside from this, you can go on the mortgage as £0 income although assume this will effect the amount you can borrow negatively, which is why as GMS states Santander do not allow these types of mortgage.

This sounds like the workmanship of an Estate Agent based mortgage advisor?

rach83

Sorry. The AIP is actually from Abbey but I thought they came under the Santander umbrella now. My mistake.

I haven't quite negotiated my return to work but I will only be working two days and have a debt which would affect the amount they would lend us?

This isn't an estate agent broker.

Dave_Ham

Sorry Abbey is the broker arm of Santander so they are all the same, I should have been clearer.

I would not be attacking this case with Abbey/Santander for sure..

Depends on amount of debt vs income, but for you to both be fully declared on the mortgage would be my preference.

If you trust your broker and have been recommended or generally happy then trust them to get the right end result.

We do not have full sight of your case and probably are a tad unfair saying it is a bad call, but from what has been shared I am not entirely sure this will end well...

I wish you well.

GMS

Taken from Abbey lending criteria:

If you answer yes to any of the following questions,
unfortunately we will decline the application.

10. Will an occupier who is not an applicant on the new
mortgage application be paying a lump sum towards
the purchase of the property?

Speak to the broker asap.

rach83

My partner has no debt and an excellent credit rating. His total salary is c. £35k. I will give him the money to pay the deposit. I haven't got the money yet (awaiting a cheque) but when I get it I will pay it into our joint account and then transfer it into OH's account. The money deposit money is kind of 'our' money anyway.