confused/worried!

jaffa_cake__

We have recently reserved a house after spending a few days getting everything prganised. We are first time buyers and there's no chain. My hours are increasing from April which means I'll have a £7k increase per annum. My employer (DWP) cannot disclose my new salary but I do have a signed headed letter disclosing the acceptance for my increase in hours.

Our financial advisor OK'd everything with us and we reserved the property, so I guess that means we have a mortgage in principal with Halifax.

Today, we went to fill in mortgage application forms with the financial advisor and she seemed unsure whether they would need somethig in writing disclosig my new future earnings - which she knows I cannot get and had previously accepted the letter I do have. She said the lenders may be able to work our my salary pro rata themselves as it states the full time salary on my pay slip.

I just have the fear of God in me that something is going to go pear shaped! Any words of wisdom or anyone else in this situation past or present would be greatly appreciated!

jaffa_cake__

Anyone think a headed/signed letter from manager confirming increase in hours and a pay slip with full time salary will be sufficient? Will the lender do the pro-rata calculation without any issues?

kingstreet

Do you need the salary level from April to justify the level of borrowing, or will your current salary be enough?

jaffa_cake__

It will go from £8700 to £15300 and my partner earna just under £14,000.

I know i can afford the mortgage now, it's only £80 more expensive than my rent. I have no overdraft and am usually left with around £400 minimum in my account at the end of the month once everythings paid for, saved some etc.

Thrugelmir

Is the property ready for occupation?

holly_hobby

If you need the salary increase to meet the lending criteria, this will have to be confirmed and guaranteed by the employer as a contractual change (ie you can't opt out of it at will, and your hrs and salary reduce).

If you dont need it, this change won't impact on your application as your current income is sufficient.

Sort of stating the obvious I know, but there you have it.

Hope this helps

Holly

jaffa_cake__

Yes it is ready to move straight into.

Apparently the public sector never confirms future salary!

jaffa_cake__

Also, I do have a letter confirming the increase in hours but not salary as DWP don't do that.

Obviously an increase in salary is going to be taken into account aswell as my salary now.

I think what confused me was that she had to ok everything with the lenders along the way anyway, which is why we have got this far and put a reserve down on the house. Then, by saying we will have to see where we get with the lenders has made me worry!

holly_hobby

If your employer won't confirm the salary until your role has changed, and your increased income is reqd to meet the reqd affordability, then you'll have to wait until your contractual hrs have increased and your verifiable income duly increased.

I understand what you are saying with just use the divisible hourly rate of your current role, and mulitply up with the increased hours - but from a lenders point of view you could be changing role, resulting in the change of contractual hours, but with a corresponding reduced hourly rate (assuming you're not presently on minimum wage rates !) ..... I know what you're thinking thats ridiculous ... but you must see if from a lenders point of view, and under the FSA regulatory remit of responsible lending, they MUST verify income upon which a mortgage borrowings are based.

Before worrying un- necessarily, you need to actually find out from your adviser/the lender if your CURRENT and verifiable salary is sufficient for the loan reqd - everything else will follow from this.

Come back when you know more.

Hope this helps

Holly

jaffa_cake__

holly_hobby wrote: »

I understand what you are saying with just use the divisible hourly rate of your current role, and mulitply up with the increased hours - but from a lenders point of view you could be changing role, resulting in the change of contractual hours, but with a corresponding reduced hourly rate (assuming you're not presently on minimum wage rates !)

I have already said I have a letter confirming this. However no public sector business confirms any future earnings so SURELY they have something in place for this kind of situation considering the public sector is so huge and I won't be the first or last person with this issue. Also, the only way I could change a role would to be a Team Leader or above so that would mean I would earn even more. They have my job title and know it is going to remain the same, increase in hours have been confirmed in writing. My question is simply this: do lenders work out pro-rata earnings themselves in this situation? If you don't know, then fair enough, I was just wondering.

I can't wait until April when my hours change to get confirmation of new earnings, because the contracts don't state new earnings. So then I assume I'd have to wait another 3 months for 3 new pay slips and I have to be in the property no later than 15 March. If what I got from my employer wasn't enough then it should have been said at the time, surely. Otherwise I have just spend £1000 reserving, applying for a mortgage, and instructing solicitors when they told me to for nothing, right?

holly_hobby

I have already said I have a letter confirming this.

Yes so you say

However no public sector business confirms any future earnings so SURELY they have something in place for this kind of situation considering the public sector is so huge and I won't be the first or last person with this issue. Also, the only way I could change a role would to be a Team Leader or above so that would mean I would earn even more. They have my job title and know it is going to remain the same, increase in hours have been confirmed in writing. My question is simply this: do lenders work out pro-rata earnings themselves in this situation? If you don't know, then fair enough, I was just wondering.

No they don't is the answer - clues in the term FUTURE earnings, if the lender refuses to confirm what you salary will be, how can a lender verify the income (and that you will be active in the role) ??


I can't wait until April when my hours change to get confirmation of new earnings, because the contracts don't state new earnings. So then I assume I'd have to wait another 3 months for 3 new pay slips and I have to be in the property no later than 15 March. If what I got from my employer wasn't enough then it should have been said at the time, surely. Otherwise I have just spend £1000 reserving, applying for a mortgage, and instructing solicitors when they told me to for nothing, right?

Thats as may be - but as stated previuosly, if your employer refuses to confirm future increase to income, you can't expect a lender to effectively guess what it wil be (bearing in mind that the employer also won't confirm that you will be subject to the same hourly rate.

So .... to repeat my original question .. what has the lender ACTUALLY SAID re your current income and affordability, as its only if this is TOO low that you have an issue !!

If you don't know (which appears to be the thrust of the thread) .... you obv eed to speak directly with the lender to verify this .... as its they making the decision.

Reserving a property should not have been done before you knew you had a mge. If you did so, on the advisers say so, using the increased salary as an affordability basis - they owe you the fees, as if experienced they would have know this would be a potential UW issue.

Holly