Mortgage offer made but credit application needed due to car lease scheme at work

Bardo_Pond

I'd appreciate any advice on this please as I'm getting pretty stressed. I'd posted this in the mortgage forum but thought it may be more appropriate here:

My husband and I have had a mortgage offer from Halifax for a new build which wont be ready till early Oct 2016.

There were no issues with getting the mortgage as we have no debt of any kind and our level of borrowing on the mortgage compared to our income is modest.

However - my husband has been told by his employer that he will 'have' to use their car lease scheme which will involve getting a credit check. He currently has a hire car (arranged through employer) but this isn't allowed to carry on any longer. The payments for the lease vehicle would actually be less coming out of his wage than the current rental hire vehicle so affordability isn't an issue......but the credit check will be I'm guessing.

Taking into a/c the reason for the credit (car lease via employer) and lack of affordability issues where will we stand with Halifax?

He can't afford to just buy a car outright as his employers policy is a car owned (as opposed to on their lease scheme) has to be less than 5 yrs old.

Any help/info would be much appreciated, thank you.

Bardo_Pond

Can anyone provide any advice on this? A broker perhaps?

MartiMcfly

Just tell Halifax, They shouldn't be bothered. Banks get funny if you appear to try and 'cover things up' if you're upfront on things, it shouldn't be an issue. But I'd tell them for sure, if only to put yourself at ease. Do you have an actual offer that has been received in the post? There should be a number to call with questions and your ref number.

Bardo_Pond

No offer through the post yet - the survey is pending. We're using HTB so had to go through a broker - my husband has told him the predicament but his advise was not to apply for credit. Well we know this but my husband may not have the choice if he wants to keep his job!

MartiMcfly

Your broker will be earning his commission at offer, so its in his / her interest to make sure it all goes through, tell the broker to contact Halifax asap and explain. I'm sure it will be ok, if your HTB, the bank's exposure is so low, as effectively you have a large deposit.

Bardo_Pond

MartiMcfly wrote: »

Your broker will be earning his commission at offer, so its in his / her interest to make sure it all goes through, tell the broker to contact Halifax asap and explain. I'm sure it will be ok, if your HTB, the bank's exposure is so low, as effectively you have a large deposit.

My husband's already spoken to the broker, he wasn't very helpful apparently, said something along the lines of, "these things happen", he wasn't up for contacting the lender - not sure why but I'll email him myself tomorrow and try and nail him down.

MartiMcfly

I suspect the broker knows the lender well, and doesn't see this as an issue then. If your husband's outgoings will actually go down because of this, its no reason to worry.

Another thing to remember is your broker works for YOU, so even in the 1 in a million chance of something going wrong, he will have a back up plan of another lender to push it through quick. I speak from experience, was going through a purchase, and the bank withdrew , but this was just after Agreement in principle stage , rather than formal mortgage offer, my broker got a new lender within a week, and all was fine. Stressful thought...

usefulmale

Never mind the mortgage. I would be looking into exactly what you are getting into. What happens if your husband is sacked / made redundant? Is the lease terminated with immediate effect, or are you saddled with an ongoing cost that you might not need or can afford?

Can your husband not use his own car?

Bardo_Pond

usefulmale wrote: »

Never mind the mortgage. I would be looking into exactly what you are getting into. What happens if your husband is sacked / made redundant? Is the lease terminated with immediate effect, or are you saddled with an ongoing cost that you might not need or can afford?

Can your husband not use his own car?

Lease scheme terminates if husband loses job, no issues there. He doesn't have a car otherwise he'd use it.

usefulmale

Bardo_Pond wrote: »

Lease scheme terminates if husband loses job, no issues there. He doesn't have a car otherwise he'd use it.

I saw the bit about your husbands lack of a car after I posted.

Have you told the mortgage provider about this lease? Could your mortgage offer be recinded if they deem the mortgage unaffordable?

I imagine the mortgage provider will want to run another credit check closer to October, just to make sure you haven't maxed out your credit cards or taken on a car lease. Could this cause problems for you closer to your completion date?

Have your husbands company offered a pay rise to offset the lease costs? This scheme sounds like it offloads employer costs of doing business onto the employees. Where is the benefit for employees?

Finally, I believe that it is illegal to coerce someone into taking out a loan or completing any other financial transaction. I would see if you could have a free half-hours consultation with a solicitor if I were in your shoes.

marksoton

Bardo_Pond wrote: »

Lease scheme terminates if husband loses job, no issues there.

This still seems bizarre.

My company lease my car not me. I have never heard of this setup where the employee is liable for the credit check or lease unless they are just in receipt of a car allowance.

I really wouldn't trust that a binding lease contract would terminate if his employment did. It's HIS agreement not his employers in this scenario.