Halifax Mortgage 'decision in principle' credit check

kingstreet

Halifax criteria;-

IT and other contractors

For IT contractors on any income and other contractors whose income is more than £500 per day or £75,000 per annum: whether employed or self employed, we accept the gross value of the contract as evidence of income. All applicants must have a current continuous employment of 12 months or more with 6 months of the contract remaining or 2 years continuous service in the same type of employment.

mc1981

Oh no! so because I only have 4 months experience and 4 months left on my contract, it will be declined? I should also have said that I have no adverse credit history and 25% deposit, is there no way they will take this into consideration?Also, my partner will be coming onto the mortgage with me after he sells his property so the mortgage would only be in my sole name for a short period of time

gazfocus

mc1981 wrote: »

Oh no! so because I only have 4 months experience and 4 months left on my contract, it will be declined? I should also have said that I have no adverse credit history and 25% deposit, is there no way they will take this into consideration?Also, my partner will be coming onto the mortgage with me after he sells his property so the mortgage would only be in my sole name for a short period of time

Unfortunately, your partner coming onto the mortgage with you won't make the blindest bit of difference until such a time that that happens.

kingstreet

Did a broker advise you to use Halifax for this?

If so, I'm sure they established Halifax would be happy with the case before they suggested it.

If you went direct, I can only suggest you ask Halifax.

mc1981

I went through a broker and he keyed all of the information into Halifax and I have my official DIP from Halifax, I knew of the criteria you had mentioned above but I'm hoping the broker I'm using would at least be able to "sell" my case a bit to them to make them consider it before refusing outright, I completely understand that contractors are high risk but it's just frustrating that when you're putting down such a large deposit and are a sightly higher earner. I'll just need to hope for the best, my broker was 100% honest with all of my information he gave Halifax so they know my contracting history and duration and day rate, etc so I'm thinking if it was a straight no I wouldn't have gotten a DIP? Would that be right?

gazfocus

mc1981 wrote: »

I went through a broker and he keyed all of the information into Halifax and I have my official DIP from Halifax, I knew of the criteria you had mentioned above but I'm hoping the broker I'm using would at least be able to "sell" my case a bit to them to make them consider it before refusing outright, I completely understand that contractors are high risk but it's just frustrating that when you're putting down such a large deposit and are a sightly higher earner. I'll just need to hope for the best, my broker was 100% honest with all of my information he gave Halifax so they know my contracting history and duration and day rate, etc so I'm thinking if it was a straight no I wouldn't have gotten a DIP? Would that be right?

The DIP is a computer says yes/no process. It is basically a case of 'can x afford a mortgage of y on his/her income?'. Halifax also only check your current address for possible adverse credit history at DIP stage. Unfortunately, I don't think they look at things like your employment type until it goes to full application and an underwriter goes through everything.

mc1981

Is the underwriter a human process or system? Would they look at each case on merit or is it a straight decline/approval based on their rules? BTW I'm so sorry for all the questions and thank you so much for all your patience! I'm just really worried I'm going to lose out on the chance of my dream home because I've gone for it based on getting the DIP and am now seriously worried if I go to full application it will be a no! : (

Ltd_Company_advice

Hi,

I thought I would reply to this post as I'm currently going through a mortgage application with Halifax at the moment and I am an IT Contractor.

I got my AIP a week or 2 ago. We are looking at a new build and they make you get this before they will allow you to put down a deposit.

Which is great but the people doing these AIP's will ask you what you earn, so if you are a contractor your day rate etc.

They will put in various bits of information about you, previous addresses any known adverse credit etc and then they will let you know whether they will lend you the money. Great.

Until you have to go through the full mortgage application. They will want 3 years of completed accounts and they will calculate your average salary for the latest 3 years and that will be your salary and what you can borrow on.

So if you earnt 30k first year, 40k 2nd year and 50k 3rd year they would base your earning on 40k.

So forget about using what you earn per day as a contractor as what you can borrow on. They will use the total income, minus Directors remuneration, minus expenses. Then you get the figure you can borrow on.

Mine was only submitted yesterday so I am waiting at the moment.

I have adverse credit from 3-5 years ago. All paid off now but have to see how much of a problem it is. The broker said it should be ok as I got through the DIP but that they might query it but because it is all paid off it might be ok.

I'm always the pessimist and I don't think I will get the mortgage offer anyway. :-(

kingstreet

FWIW we get everything we need upfront and don't rely on the DIP. For a contractor, we get a copy of the contract, invoices and bank statements and ensure the case fits the lender before we submit anything to the lender.

Or last contractor case was based on £450 per day, 20 days per month, so an income of £108,000 per annum. The bank statements and contract confirmed this.

Sometimes, clients get peed off with us because we do it this way. It can take two weeks or more to get to reservation stage with us, but usually, our applications are offered in about a week to ten days, because effectively, we've underwritten it before it's submitted.

We consider we are MMR compliant with only one or two minor hurdles to overcome.

Ltd_Company_advice

Just an update on how mine is going. Mortgage broker rang me last night to say that we had failed the electronic identification but that the mortgage was fine.

I sold a place last year and moved to my in laws for a few months so nothing matches. Not a problem just got to find everything that they want now.

I have noticed this morning on my credit report though that a few more searches have appeared. One in particular is one that shows the amount that you want to borrow?

Does anyone know if this is now past the credit checking stage?