Mortgage approval

ashleyj722

I recently got an offer accepted on a property and have decided to go through a mortgage broker. Due to my personal circumstances, I was coming up to 6 months left on my fix term contract and was worried that I couldn't get a mortgage which I explained to the mortgage broker who we haggled the fee down to £250 upon completion. He said that he had found a lender that would consider my case. We subsequently choose a 5 year fixed term with no arrangement fees with the Santander. It's not the best deal as the seems to be at least £25 difference per month between this deal and the best 5 year fixed even when we take into account the fees. Since then, I found out that my contract is being extended to September 2016 and now have written proof of that. At the same time, we've just had the mortgage approved subject to the valuation. My question is whether I can reject a mortgage offer and go through another lender to get the best deal. I know the credit search will show up on any subsequent application and I don't think the mortgage broker would be happy about it.

BlaEm

Assume you don't have any sort of contract or signed terms of business with the mortgage broker? As fees are due on completion, it sounds as though you don't have to go through with anything, particularly as you have reason to believe that this is not/no longer the best deal for you.

I'd think it would definitely be worth talking to another broker (e.g. London and Country, who do not charge a fee), where you can explain your current offer and change in circumstances and they can see what else is on the market.

Have you had made a full on mortgage application, or is it just an agreement in principle at this stage?

ashleyj722

I made a full application now so it is passed the DIP stage. I remember that I signed some terms and conditions

pinkteapot

The other question is, how patient is everyone in your chain? If they're keen to move fast they may not look too kindly on you starting the mortgage process again...

Some lenders won't consider contractors regardless of how long the contract is (eg HSBC) so worth talking to another broker before you do anything, just to see what the best rate you can now get is. You may not have the very best rates available to you.

ashleyj722

Luckily, the property is chain free.

Rosetinted

pinkteapot wrote: »

Some lenders won't consider contractors regardless of how long the contract is (eg HSBC).

HSBC were happy to give me an AIP a couple of months back, even though I stated very clearly I'm on a fixed-term contract and asked them to check if I could still get a mortgage through them. Once I'd confirmed I'd already had a contract renewal and been in the role for more than a year, they said it would be no problem. However an AIP and a mortgage are two different things. I hope this doesn't spell trouble ahead!

kingstreet

In mortgage terms, there's a world of difference between someone who is an employee on a fixed term contract and a "contractor," normally someone with their own limited company and on a daily rate, where the gross value of their contract is used as their income.

jimpix12

Nobody seems worried that the banks are still lending risky mortgages, in this case to someone who openly admits to having a job for only another few months?

The mind boggles.

Kat88

Not really as these contracts are very common these days. Although they are fixed term they are often renewed, or people on them are often aware of when they end and ensure they get a new job before it does. It's really not a big issue..

ashleyj722

spunko2010 wrote: »

Nobody seems worried that the banks are still lending risky mortgages, in this case to someone who openly admits to having a job for only another few months?

The mind boggles.

I understand your concern but in my line of work, it is very difficult to get a permanent. I work in academia as a post doc where you are always given a fixed term mortgage. I don't have any other debts other than my student loan which isn't really considered debt. I'm currently paying more in rent than my mortgage repayment would be, I have a 20% deposit and I have enough savings to live off for a year if I was to lose my job. So don't think I'm just someone who is financially irresponsible.