The "I'm a contractor" mortgage saga - update

pinkteapot

You might remember my flap last week when we found out that HSBC wouldn't consider my salary for our mortgage because my job is a two year fixed term contract...

Spoke to a broker, and we're going for a Santander lifetime tracker at BOE base +1.99%. It's fractionally more expensive than the HSBC one at base +1.89%, but we could always switch back to HSBC once I'm permanent as there's no early redemption charge.

Here's the funny bit:

1. Santander won't consider my salary either. HSBC, who we've both banked with for 15 years, and who have seen us overpay our current mortgage down from £100k to £35k in the last three years, would lend us £208k based on hubby's salary alone. With Santander, who don't know us from Adam, we've managed to get the £245k we need.

2. Based on the above, think we'll switch to the Santander 123 current account after we've moved. Wondering now why we've been loyal to HSBC Premier, where we get no interest at all on our current account. :mad:

3. We wanted to do the mortgage over 25 years. Our broker had fun with Santander - we wanted £245k and on hubby's salary, over 25 years, they'd lend us £243,500! They said they'd do it over 26 years. We actually decided at that point to take it over 28 years instead (max term we can get due to retirement age). We'll be overpaying from the start so the original term is irrelevant, and if we have an income squeeze due to kids in the future our standard monthly repayment will be a bit lower which will help.

AIP is done. Just got everything crossed it all goes through OK because it sounds like we're close to the limit of Santander's affordability rules. I think people in the chain will be worried about the FTB below us, but I'm more worried about our mortgage application! Broker swears it'll be OK... Fingers crossed!

Annoying thing is that I asked work if I could get anything in writing to confirm I'd be made permanent, as then the banks would consider my salary. I don't have anything, but they've now started the process to make me permanent. It'll take a few weeks as it's a large organisation with lots of bureaucracy. Just too late for the mortgage application!

Anyway, thank you to everyone on here who's helped and given advice this week. Much appreciated!

dimbo61

Loyalty has the GOD that is Martin not told us many times about Loyalty!
We shop at ALDI, buy online for cheapest deals, use quidco if possible!
Avoid paying any Interest if at all possible ( Offset !!!! Friends and family)
Good Luck with Santander but there customer service was pants a few years ago!

Thrugelmir

pinkteapot wrote: »

2. Based on the above, think we'll switch to the Santander 123 current account after we've moved. Wondering now why we've been loyal to HSBC Premier, where we get no interest at all on our current account. :mad:

Santander are Spanish and so are looking for funding. HSBC is predominantly Asian based, the hint is in the name, so have adequate funding internally.

pinkteapot

Thanks - to dimbo61 - I did ask our broker about Santander and their poor reviews online for customer service, because it did worry me.

A lot of the complaints were about mortgages not being approved. Our broker is sure ours will go through. Only time will tell if he's right! He said he's placed others with them recently and not had problems so long as the AIP went through.

In terms of customer service after that, a lot of reviews talked about people coming off fixed rates and Santander not offering them competitive new deals. We're on a lifetime tracker so won't have that issue.

We've had our current mortgage for three years and have never contacted HSBC about it. We've done all our overpayments online. Hoping the one with Santander will be the same.

So long as we get the mortgage in the first place, I'm not sure how much poor customer service will affect us. If we do have trouble, we'll move it to someone else as I'll be permanent by then and we'll be free to go anywhere.

Touch wood! I am nervous about it getting approved. We're close to the affordability limit because my salary isn't being counted, but we've now been through the full AIP (complete with credit check) and they're happy, so fingers and toes crossed.

That's if our chain ever becomes complete! The mortgage application is all ready to go, and our solicitor is standing by to be instructed... Still waiting for the chain to form at the top (people at the top viewed houses this weekend).

suse*

are you going through a broker who deals with contractors as they can make all the difference. It can depend on if you're in a 3 month or 6 month contract or go through an ltd or umbrella or not.

Have a look on the pgc . org . uk for vetted services for contractors and see what deails they can come up with maybe?

Also it might be worth factoring in what the rents are like where you are so could they cover 125% of a mortgage and then give you the option to change it to a btl later if you did need to relocate or more over seas for work. Otherwise you might be stuck with a house you can't rent and can't get insurance for if it is left empty.