Be careful.. Halifax Valuation Con??

shapecontractor

Self employed (SE) , trying to mortgage new build (not yet built) house utilising first buy scheme through intermediary. Halifax gave AIP and within days had the surveyor out to sales office, looked at plan, agreed valuation for purchase. £430 taken from us. All they required was my first year books to complete the application. I've been SE for 3yrs.

Turned us down because my 1st year of SE showed no profit from business, but I did make £18k from partial employed income that year. So if we average my earnings before tax over the past 3 yrs that sums to £28k per year. Coupled with my wife's income we easily satisfy the < £60k joint income. Clean credit hence we satisfied AIP.

Surely we have a case for asking for the £430 back or at least some of it? Anybody help on this one?

kingstreet

What did you put on the application?

Did the income on the application match the reality, or was the lender expecting something different to what you actually evidenced?

I have a funny feeling in the back of my mind that Halifax has an issue with a change of income source part way through a year. We have two or three ex-Halifax bods on here and they may be able to clarify when they look in.

If Halifax accepted your application in good faith and went ahead with the valuation based on the application data, the money has been spent and it won't be refunded. This is only going to happen if you clearly stated the income position and Halifax instructed the surveyor in error.

shapecontractor

Thanks, in answer to your Question what was put on the application I don't know that as this was submitted via the intermediary although I did raise a question to intermediary about that 3rd year. We're currently going via another large lender who require 2 years books. We've had the DIP but due to BH weekend are still awaiting a formal offer.

It appears extremely difficult for SE to secure mortgages currently? I'm sure if I was employed with 3 decent months wage slip we'd be fine?

Yes I think the ex Halifax people may be able to shed some light but surely if Halifax do have a problem with the change it makes no sense if you still satisfy the incomes over the 3 yr period. Rather confusing

shapecontractor

Also didnt see the need to send out the surveyor so quickly if there were unanswered Qs. They did ask for the SA302 for that year. just a bit upset that if they'd waited 10 days for that SA302 I wouldnt be £430 out of pocket and new possible lender wont accept that valuation even though it was a well known independent

kingstreet

In most cases, particularly newbuild business, the builder expects to see the surveyor instructed and out within a couple of days of the application going in.

If your broker felt there was a potential issue it would be for them to ask Halifax to hold the valuation until such times as the evidence of income was confirmed and acceptable. I would not even submit an application until I had evidence of income in my hands.

Nominally, Halifax asks for three years trading accounts or SA302s for the self-employed. They will accept less evidence, but it should be noted the broker should be aware of what will be required before submitting the case. They can establish this by discussing the case with their BDM and by the requirements at the Mortgage Promise stage in the application process.

There can be unusual requests, but evidence of income is a "bread and butter" requirement needed in every case. Perhaps you should be asking some pointed questions of your broker here, not Halifax. A copy of the submitted application may be a good first start, so you can see what was actually shown. This can be downloaded and printed from the broker's Case Tracking facility in Halifax Online.

Finally, lenders have requirements for the self-employed. They always have. Brokers know the lenders which accept one years accounts, two years accounts, or which will insist on three years. If you submit a case with insufficient trading records to the wrong lender, it will simply be turned around back with a "no thanks" attached to it. A broker only does that once or twice in a career before they get the message. Re-writing a case takes bloody ages and no-one wants to have to explain to a client they introduced them to the wrong lender! Particularly not if you've just allowed them to lose £430...

Thrugelmir

shapecontractor wrote: »

but surely if Halifax do have a problem with the change it makes no sense if you still satisfy the incomes over the 3 yr period. Rather confusing

The issue is the averaging of your self employed income over the 3 year period. With zero in year one. This will bring the average down.

shapecontractor

Thanks for that detailed response, I'll wait a while because as we're in the middle of a second application with the same broker I don't want to get on their back, but I will ask these questions you've clarified for me, but at least I'm now sure that I've lost the 430 through no fault of Halifax

shapecontractor

It does bring the average down over 3 years, but to 28k per year average over three. I earned 43k last year as the business did well. That's why I was a bit miffed that Halifax turned us down on yr1 even though I had 18k employed earnings part yr. can't understand halifax's inflexibility

Thrugelmir

The £18k of employed earnings from 3 years ago is irrelevant.

Lenders have to draw the line somewhere. So its not a case of inflexibility, but there own rule on lending.

shapecontractor

Thanks Guys, your honesty and sraight forward points have been appreciated.