Hard to believe but my mortgage application was declined.

toja

I currently have 121k remaining with Woolwich, wanted to port my mortgage to a new house and borrow extra 14k (up to 135k) – based on Woolwich calculations I can only afford to port/borrow 80k!

My salary is 32.5k, mortgage based on single income, deposit of 40%, two children. Though significant childcare expenses (£950/month), but my husband transfers me £900 every month to cover it for years, and I have signed up for £243 childcare vouchers – effectively I pay NIL for childcare, but Woolwich still deducts £243 as my own childcare cost.

I have checked with other brokers and they would lend but I am not keen on paying 3% early redemption fee to Woolwich.

I feel frustrated. My payment record is impeccable, I overpay my mortgage and my credit rating is excellent.

ACG

Are you no longer with your husband? Why is he not going on the Mortgage?
Why are you paying childcare costs and then hes paying you? Why does he not just pay those costs?

StuC75

The £243 salary sacrifice is still being paid by you (albeit at lower amount because of tax elimination)., or are you saying that your 32k salary is after that?

Other than that there probably not netting off the other childcare contribution - how would it look if that was stripped out?

amnblog

If you cannot work with the smaller mortgage you will have to move to a new lender and pay the Woowlcih repayment penalty.

Seems a bit ambitious however, to suggest another lender will lend you £55,000 more than Woolwich.

toja

The salary sacrifice may be paid by me but then recouped from my husband's contribution... We do not pay £900+£243 - we pay £950 which is covered by hubby £900 and tax savings from the sacrifice ~£70+.

I am together with my husband but our finances are separate, i.e. I am the manager of our budget at home (I am just better with money) and he contributes what I tell him to. He is not on the house deeds, I bought it before we got married and because he has bad credit record from the past we do not want him to be on the deeds.

I am surprised that I got mortgage approved several years ago when my husband was unemployed and he took care of our kids (no childcare expenses). Now we are better off financially even after the childcare paid.

I just realized that Woolwich also have not taken Child Benefit into account.

toja

It is ridiculous but other lenders (according to the broker) are ready to lend me 155-170k. Some of them do not take into account childcare vouchers (e.g. Halifax).

whitewing

Is it worth seeing what the situation would be like if your husband were to apply with you with Woolwich? I understand about his bad credit rating etc, but I am also quite surprised that he is happy to not be on the mortgage, unless he has other big investments.

toja

whitewing wrote: »

Is it worth seeing what the situation would be like if your husband were to apply with you with Woolwich? I understand about his bad credit rating etc, but I am also quite surprised that he is happy to not be on the mortgage, unless he has other big investments.

He is happy as it is and involving him is not an option.

This is not the point though. I think Woolwich has made some mistakes. For example, they asked for a net salary on a payslip. Net is after deducting season ticket loan and childcare vouchers. So, for example, season ticket loan affects affordability twice. Then my child benefit was not accounted at all. I could drop the childcare vouchers and it is likely to change the affordability, but I don’t have the time to wait until next payslip in the end of August.
The broker cared to ask about these things..

Let_Us_See

Responsible lending? What happens if your husband loses his job or decides not to pay? Sometimes a lender just cannot win!

Has this decision been confirmed by lender or purely the result of you using the lender's affordability calculator? If the latter, then remember this is not written in stone and a good broker should be able to "present" this application.

toja

Let_Us_See wrote: »

Responsible lending? What happens if your husband loses his job or decides not to pay? Sometimes a lender just cannot win!

Has this decision been confirmed by lender or purely the result of you using the lender's affordability calculator? If the latter, then remember this is not written in stone and a good broker should be able to "present" this application.

If my husband loses job then he will take care of the kids = no childcare costs. If the husband decides not to pay... well that's similar to if we had joint mortgage and he decides not to pay his share... (too many ifs).

It was an automatic decision based on affordability calculator.

Should I use a broker to represent my "case" in Woolwich? I thought brokers are only for new mortgages...

Let_Us_See

Underwriting is all about "ifs."

Can you confirm my previous query "Has this decision been confirmed by lender or purely the result of you using the lender's affordability calculator?"

There is no reason a broker/adviser could not assist.