Mtg application hell

jon_viola

Hi,

I wonder if you could help me. My Wife and I are applying for our first mortgage. We have slightly complicated financial arrangements. My Wife is self employed and I have PAYE income and SE. We have a 25% deposit.

I have been trading since 09/11 so have one SA302 with another on the way. However this means that although I have been trading for 2 years I only have 18 months HMRC accounts. I have prepared accounts to 09/13 so that it covers the two years I have been trading. My PAYE has been for 10 years but is only worth 1/3 of my SE. I have accountants reference with projections, employers reference.

My wife has been trading for 4 years.

We have had such problems with brokers. The first applied to Halifax got a huge AIP but then decided to go to Santander, got an agreement in principal but then we were declined thanks to my 18 months HMRC accs apparently. He then washed his hands of us.

We then approached another who again got us an AIP with Halifax (for far more than we need) but he inputted the wrong figures and the offer dropped below what we needed.He now won't revise the figures and has washed his hands of us.

We then went direct to HSBC, my wife spent hours on the phone to the underwriters checking that it was possible under their criteria to apply. We were told this was the case. We were again given a huge AIP and then subsequently declined.

We were advised to apply to Halifax directly for a more positive result so we have. Again AIP is huge so we intend to make the application asap.

We are really at our wits end about all this and want to get a mortgage to secure our dream house.

Can anyone tell me how to make the application to Halifax in the best way so it goes through?

Please help!!

Thanks

Jon

GMS

The slinging mud until some sticks approach will cause damage to credit score.

How much do you want to borrow?

What are the figures for your self employments? PAYE income?

Annisele

Do you know why HSBC declined you?

Do you and your wife both have copies of all three of your credit reports? (I believe Halifax only uses Experian, but I'm not sure about that.) I don't think Halifax's AIP is a full search, so if there's something they don't like on your credit files they might well agree an AIP but then decline a full application.

I wonder if somewhere along the line (eg your broker's wrong figures) your income has been declared as much higher than it is. That looks fraudulent - and can rather spook lenders.

jon_viola

Thanks for your swift replies

HSBC declined us on not having three years accounts for both of us. We had checked this with the underwriter and told that it was ok but clearly not!

We've checked our files and our scores are good.

We need a £219k mortgage. My PAYE is c£13k and my SE c£32k. My wife is c£20k

GMS

Are your wifes profits showing increases year on year?

Get another broker. Important to get the right lender rather than rate chasing and killing credit score.

Do you have any unsecured borrowings? What ages are you? Any children?

Annisele

When you say your "scores" are good, are you talking about the number some of them give you? If so, the lender doesn't care about those. The lender cares about the actual data - payment record, available credit, that sort of thing. Any missed payments at all for either of you?

I can understand the underwriters being a bit nervous about your £32k of SE profit if you've only been trading a couple of years. (I'm assuming your figures are profit, not turnover).

What does your wife's trading history look like? If her last four years of profit were £16k, 18K, £19k, £20k that looks much better than £100k, £80k, £40k, £20k.

How much deposit do you have (as a percentage of the value of the house you want to buy)? Criteria for 95% mortgages are much stricter than for 60%.

Given that you haven't been SE for very long, I do think you're pushing things looking at a £219k mortgage. All I can really suggest is that you try to find an experienced broker who you trust who seems confident they can get you a mortgage. If you can't find such a person, that might be because you're trying to borrow just a bit too much for your current circumstances.

jon_viola

We've no kids.

Wife's showing increase yes.

We've got some debt yep but not too much. No ones reacted to it badly yet at least!

We have a £78k deposit so 25%.

We've been going through brokers from recommendations but it seems they make mistakes. Living in London as we do you simply can't get anything for less than £300k that would fit a family.

Annisele

How much debt is "not too much"? Debt can have a surprisingly large impact on affordability calculations.

GMS

jon_viola wrote: »

We've got some debt yep but not too much. No ones reacted to it badly yet at least!

We have a £78k deposit so 25%.

What debts? Not too much to you may be enough to lower the amount available.

Deposit doesn't pay the mortgage, your income will hence why the debts could have an impact.

May be that you need to repay the debts and have a lesser deposit. Did your broker explore the options in detail?

Was it an estate agent broker?

jon_viola

We've about £3k between us on CC and one loan of £1.5k

One broker was independent the other attached to an agent.

jon_viola

I should add that one of the problems seems to be whether to give an income figure all rolled into one or split them in to the two areas.

Any advice you could offer on this would be very helpful. Also as to how to word my application in terms of being a trader (with full accounts) for two years but only having 18 months HMRC SA302's.

Any other general advice about being on the phone to them?