Mortgage application referred to underwriters: first time buyers

Honda421

Hi there,

I don't usually post on here, but having googled our particular situation at the moment I thought it would be best to just ask!

My boyfriend and I have recently had a decision in principle from HSBC, which said the maximum loan value we could request was 380K. we subsequently found a property and had our offer accepted - property value £350K. Our deposit is 10% so 90% LTV.

Our combined income is ~£80K. Mine is salaried, however my boyfriend is paid hourly depending on work, with a base salary of £350 per week (without additional hours). He usually earns around 700 a week.

We have a good credit history, no debts (other than student which I understand doesn't count) and 1 HSBC credit card each which are regularly repaid before the balance is due. No loans, overdrafts etc.

Our mortgage application has been submitted, but subsequently referred to an underwriter due to the LTV ratio. This didn't happen in our previous application (before the seller pulled out) so we're a little concerned that the mortgage will be declined and we'll lose out on this property. Our advisor has assured us it's nothing to worry about, but it's hard not to!

We know underwriter approval is standard, but would be good to know if due to the value, you'd expect any issues? thank you!

Thrugelmir

With 50% of your other half's income variable (£18k). Good enough reason for a closer look by an underwriter. As the lending boundaries are being pushed.

Honda421

Yeah we thought that's the likely flag for the underwriters. He has proven payslips from the past 3 years at a consistent wage, and the mortgage advisor didn't think it would be a problem.

I guess you can't really predict, but would you expect them to decline on that basis?

Thrugelmir

No idea what criteria may applied by HSBC. If you are using a 100% of the income then there's no slack should there be a downturn. Nature of the employer is a potential factor too. Mortgages last 25 years or more. Lenders will therefore be naturally pessimistic looking longer term. Whereas as borrowers look short term on an optimistic basic and worry about the long term when it arrives.