Double counting by lender - contract hire car; credit cards

Jakesy

Hi,

New to this forum so please don't hesitate to tell me if I do anything wrong/inappropriate!

I am remortgaging. Have been to broker. He has recommended a certain high-street, well known lender. However they are being really weird about two major things which is reducing their offer significantly:

1. Most significant is that I am self-employed and, through my business, I have a car on contract hire. The expense, therefore, is deducted from my overall annual profit and so my total profit is less. When they did the Experian credit check, they saw the contract hire agreement which is in my name as I'm a sole trader/self employed but which is clearly a business agreement. However they have insisted on reducing their offer even further by saying I have this liability. This is clearly double counting. Apparently they are aware that this causes an issue but they are not prepared to do anything about it.

Anyone had experience of this or got any good advice? Can I challenge their approach besides what the broker has tried (writing, calling and emailing)? I even suggested an accountant's letter to say that if they are using the figures from Experian, then my profit is higher than my accounts show, but this isn't appropriate.

2. Second issue is that we always pay our credit cards off in full every month on time. However when they did their Experian check, they saw that we owed whatever was due that month and therefore reduced the offer further because of the outstanding debt. The broker has suggested paying everything early and not using the cards for a while and then we have to do another Experian check ourselves and provide it to the lender. They apparently won't accept a statement showing nothing is owed.

Does this sound right?

Thanks in advance helpful people!!

amnblog

Point 1. Many lenders will discount if they can evidence that the car hire is paid by the business, even if the contract is in your name


Point 2. Santander by any chance?

Jakesy

Yes! You've obviously come across this issue before! Am I wasting my time?

amnblog

With this broker? - apparently!

Jakesy

The broker is really trying hard and I have no complaint against him. He seems really up against it with them, yet even reducing their offer for these annoying reasons they still seem to be offering more than other lenders at suitable terms. It's just not enough for the job we need and I know that the underwriter's formula/policy is just plain wrong and unfair! Any point contacting Santander directly myself and complaining?

amnblog

If the broker does not know that Santander work on the outstanding unsecured debt even if you intend to pay it off, then he or she has little experience.


The car thing is something that you might argue only the more experienced brokers would be wise to.

Thrugelmir

If your business has no income. Then you still have the liability for the car hire contract.

Credit cards allow people to defer settlement of expenditure. In effect using the current months income to settle last months expenditure.

This particular lender appears to be operating a cautious policy to accord with the regulations under MMR and the incoming EU directive. The focus of which is affordable and responsible lending.

When it comes to money. Borrowers are optimistic and lenders pessimistic. Has always been the same.

betmunch

If we can guess which lender you are going to by the problems you are facing then its clear your broker hadn't done his research properly.
It's been ages since Santander would consider debt paid off, there is no appeal thats going to get the contract hire removed from the calculation.
You might get the card balance removed if you can show a statement dated between the date the credit file was updated and the date of the application, but if relying on that then it should have been discussed before application.
Sorry, but youve been let down here

Jakesy

Thanks so much for your answers everyone. Will have to go back to the drawing board!