Scottish Widows Professional not issuing mortgage certificates?

jamespetts

Does anyone here have experience of using Scottish Widows Professional?

My broker recently made an application to them for a decision in principle. I am self-employed and wish to use an offset mortgage (so that, amongst other things, money that I collect in VAT can reduce my mortgage interest payments until I have to pay it to HMRC), and was advised that Scottish Widows Professional tends to be more understanding of the vagaries of self-employment, especially amongst professionals. My accounts, prepared by professional accountants, are complicated by me having taken advantage of the HMRC's new cash basis scheme, and transferred from the earnings basis to the cash basis two years ago: this means that, so that I do not have to pay tax on the same money twice, my accounts are prepared with the net profit figure being reduced to compensate for money received this year (or in last year's accounts, received last year) but earned two years ago (when I had to declare both money received in that year, whether earned or not in that year, and money earned in that year, whether received or not). My accountant has produced a detailed reference explaining this.

My broker made an application for a decision in principle for a particular sum, which he said that he had been told by them that was within their affordability limit. However, when the application was made using their online system, my broker tells me, it was declined on affordability grounds. The application was referred for manual consideration, and a slightly lower figure, I am told by my broker, was approved. Although not ideal, I can work with that lower figure and find something potentially suitable. I should note, however, that the reason for the lower figure was that they would not lend more than five times the figure shown in my last year's accounts as being the net profit, which, as explained in my accountant's reference, is an understatement of my true income for that year.

However, my broker also told me that, for reasons entirely unclear, Scottish Widows would not issue a mortgage certificate because, apparently, they do not issue mortgage certificates when there has been a referral. I am extremely wary of this, which seems to me positively bizarre. I do not wish to make an offer and incur the very great costs of a survey and search fee without being confident that a full application will succeed if all is well with the surveys and searches. Does anyone else have experience of Scottish Widows Professional in these sort of circumstances?

My broker states that he has little confidence in them as a result of this, but cannot find any alternative suitable offset mortgages.

kingstreet

The certificate is meaningless anyway.

It does not confer a right to a mortgage. The mortgage is still subject to application, valuation and meeting the lender's criteria at the time.

amnblog

SWB do a good job - trust your broker.

jamespetts

kingstreet wrote: »

The certificate is meaningless anyway.

It does not confer a right to a mortgage. The mortgage is still subject to application, valuation and meeting the lender's criteria at the time.

I am aware that it is not legally binding, but that does not make it meaningless: being able to submit a mortgage certificate to a vendor with an offer may well make the difference between an offer being accepted or not.

SWB do a good job - trust your broker.

I am slightly confused: the broker said that he had no confidence in them as a result of not issuing a certificate. Is it normal for Scottish Widows not to issue a certificate but yet go on to approve a full application?

kingstreet

Some lenders just don't issue certificates, Leeds Building Society and NatWest being two I can think of...

Can't your broker confirm to an agent that you are in a proceedable position?

jamespetts

kingstreet wrote: »

Some lenders just don't issue certificates, Leeds Building Society and NatWest being two I can think of...

Can't your broker confirm to an agent that you are in a proceedable position?

He did not say: just that he had no confidence in them because they would not issue a certificate. He then told me that I ought to apply for a non-offset mortgage with the Halifax, which, he told me, would get me the figure that I was originally looking for, and that this could be done within 3 hours. This was Tuesday afternoon. I had heard nothing from him by yesterday evening, so e-mailed him to enquire as to progress. He wrote back this morning to say that he was now off work until Saturday, but that the Halifax would only give a much lower figure again because I was rated "B" rather than "A" in terms of credit, but did not explain the basis for that rating. I have checked my own credit report with Equifax, and I find everything as expected: all the little boxes are green, and there is no record of any problem at all (indeed, no credit searches from either Scottish Widows or Halifax appear). I have also applied for my statutory report with Experian, but that seems to take longer to be e-mailed to me and has not arrived yet. I am rather concerned at the way in which this has been handled to date, and should be interested whether others have had a similar experience and, if so, what the ultimate outcome was.

amnblog

It sounds to me like your broker does not use SWB very often.

We use them every day, if my contacts there tell me a case is good to progress I am happy.

With regard to the decision certificate. Absolutely unnecessary - I would have you refer the estate agent to me as your broker and I would confirm your position is good to go.

Senior_Paper_Monitor

We also use Scottish Widows regularly and I can endorse what AMNblog says in total - they are an ideal lender in the circumstances you describe, they don't do daft DIP certificates.


While they are having a touch of post MMR stress at the moment it should all work out fine.

jamespetts

Thank you very much: that is extremely helpful.