Advice sorely needed - sudden issue with lender

Duke_Leto

Hi all,

I have just found this forum which appears to be well frequented by very helpful people. I am looking for some advice and will try to summarise our situation below...

My girlfriend and I are purchasing a new build flat. There is a very tight time-frame for completion, as dictated by the property developer. We have until the end of Jan to complete.

Prior to undertaking this property purchase, we received approval in principle from a mortgage lender. From the outset we have been very transparent about our employment status and all other details. Based on all the information and evidence we provided, there were no concerns raised, they set the valuation date and everything appeared to be progressing nicely.

On New Years Eve, we were informed by the lender that there was an issue with the mortgage. The underwriter was suddenly not willing to recognise by girlfriend's income, although they would still lend based on mine. However, this leaves us short of the funds we require.

My girlfriend works at a law firm, one of the biggest in the world, where she is due to begin working as a trainee solicitor late Jan. This will be on a a two year contract. She is currently working for them on a six month contract in business services prior to her solicitor training commencing. Although the business services and trainee solicitor roles sound different, they are actually very similar and the business services role is only offered to future trainee solicitors as extra training, so it is all an extension of the same thing. She gets a significant salary bump when starting the new contract but we are still able to get the required mortgage based on her current income. Her employment status is very secure, she has no probation period when her new contract starts and cannot be dismissed without approval from the Solicitors' Regulatory Authority.

The reason given by lender for not recognising her income is that the role in business services and trainee solicitor are in "different areas" and can't be counted as continuous employment. We have sent a letter from her employer refuting this but we are not hopeful that they will change their mind.

We are now stuck in the middle of this property purchase with mounting legal costs and no mortgage. We have since become aware that the lender has a reputation for declining mortgages based on petty technicalities.

We need to identify a mortgage lender who will recognise her income and also be able to quickly process our application and conduct the property valuation. As mentioned before, the completion deadline is the end of Jan. We are not sure whether we should approach a broker, and if so which one, or whether there are lenders who are more appropriate for our situation. Has anyone had experience of a similar situation or can offer any advice?

Many thanks.

kingstreet

So, you did this direct?

Which lender?

Duke_Leto

kingstreet wrote: »

So, you did this direct?

Which lender?

Hi Kingstreet, thanks for the reply.

Yes we did this direct, the lender is Yorkshire Building Society.

kingstreet

What's the loan to value?

Any cash incentives? Stamp duty, contribution to legal fees etc?

Not HTB - EL, as you wouldn't have gone to YBS.

Duke_Leto

kingstreet wrote: »

What's the loan to value?

Any cash incentives? Stamp duty, contribution to legal fees etc?

Not HTB - EL, as you wouldn't have gone to YBS.

Hi again

The LTV is 70%.

There are no cash incentives.

I'm not sure what you mean by HTB - EL, please forgive my ignorance!

ethank

Does she have her training contract for the 2 years signed already?

With my HR Manager hat on, service for the same employer will always be treated as continuous - as long as there is not a gap of more than 7 days between the contracts.

Duke_Leto

ethank wrote: »

Does she have her training contract for the 2 years signed already?

With my HR Manager hat on, service for the same employer will always be treated as continuous - as long as there is not a gap of more than 7 days between the contracts.

Hi Ethank

She has signed a statement of terms but doesn't actually get the new contract until the day she starts the new job (which is the day after she finishes the old one). What you, me and and her employer have all said is that the employment is continuous and should be considered part of one continuous role. But it doesn't look like they are going to agree with us. So we are really looking for either an alternative lender or a mortgage broker that specialises in these types of situations - any ideas?

Thanks!

ethank

Seeing it from their position, I think the problem may be that YBS are only considering the 6 month contract. If she does not yet have a signed contract for the 2 year training contract, then the they will not take it into consideration? Although there is a potential offer, there is not a secure contract. Will the firm give her a contract now?

To me their position is a little silly, as she would have no protection from unfair dismissal on her employment until she has two years continuous service.

kingstreet

"Help To Buy - Equity Loan."

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