Offer based on future income - what's the issue?

HomelessChump

Hello folks,

I have been allocated a HTB flat by a housing association and I am very keen not to miss this opportunity, but the timing is causing me difficulties.

I will be a trainee solicitor for another month and I have been offered a position as a solicitor at another organisation (with a much higher salary that makes this flat affordable) upon qualification, which I am taking up. The housing association expects/demands that I will have secured a mortgage offer by three weeks from today and exchanged contracts by mid November. Completion, however, is not due to take place until the end of February 2017.

Woolwich/Barclays, which offers the best interest rate for the particular type of mortgage I require, have told me that they cannot make an offer without sight of at least one payslip and my contract. I won't have this payslip until the end of November, which will not work at all for the housing association.

Why are Woolwich adverse to making an offer based on my (very near) future income? What difference does a pay slip make when the contract that contains my salary details is available? I'd appreciate it if someone could shed some light on the thinking behind this approach. Could a broker talk Woolwich around? Thanks!

SavingSteve

A broker will be best placed to find a lender that does suit your needs, if one exists. It may not be a high street lender and you may end up paying a higher rate. It'll be a price you have to pay.

Barclays play a stack it high sell it cheap approach, so spend minimal time underwriting and won't waste their time making exceptions for you, they can offer low rates as they don't spend expensive underwriters time on each and every case. Other lenders will offer that, but you pay for it by the higher rates.

If this is really the place you want you'll likely have to suck up the higher rates, go for as short term a deal as you can (2 years?) and the remortgage when your salary is stable and can be evidenced.

csgohan4

the issue is it's the future, nothing is certain, what is certain is your income now.


I could say I will win the lottery next week and pay off the mortgage so give me a million pound mortgage.


Banks are regulated and can only go on facts now and not the future what if's even though you have a piece of paper saying otherwise.


I'm afraid your going to have to wait, and generally you need to be in a job for a lot longer than 1 month to qualify. You need at least 3 months of payslips as a general rule.

getmore4less

Get another deal so you can exchange,

Then between exchange and completion source the best deal with the new job.

ACG

Every lender has their own criteria. There is no point moaning about it, large lenders do not normally have the capacity to make exceptions and I would not expect them to made an exception on this.

You need to find a lender where you fit criteria and the same can be said for everyone. Looking for the best rate i all well and good but there i no guarantee you will get it.

Realistically how much extra will cost you to go with say the 5th cheapest lender? Chances are nothing more than a few quid a month.

Thrugelmir

SavingSteve wrote: »

Barclays play a stack it high sell it cheap approach, so spend minimal time underwriting and won't waste their time making exceptions for you, they can offer low rates as they don't spend expensive underwriters time on each and every case.

That era has well and truly past. A lenders internal underwriting policy is signed off at board level. Mortgage lending is highly regulated. No lender wants to incur fines and penalties. Senior underwriters have a degree of flexibility as there's always going to be some marginal cases.

If every case were individually underwritten the cost of providing mortgages would rise significantly.

SavingSteve

Thrugelmir wrote: »

That era has well and truly past. A lenders internal underwriting policy is signed off at board level. Mortgage lending is highly regulated. No lender wants to incur fines and penalties. Senior underwriters have a degree of flexibility as there's always going to be some marginal cases.

If every case were individually underwritten the cost of providing mortgages would rise significantly.

We're saying the same thing. Barclays have their criteria and will push little to senior underwriters, the bulk dealt with by junior staff who if you don't tick the boxes reject the case. Other lenders will push more to senior underwriters. What Op needs is a lender who will look at the case individually, and Barclays are not that lender.

SavingSteve

csgohan4 wrote: »

I could say I will win the mortgage next week and pay off the mortgage so give me a million pound mortgage.

Mortgage and Lottery are very different things and are spelt differently.

kingstreet

I can think of one lender which will take future income into account. We did a case for a teacher back in April not starting work until September.

Westminster

kingstreet wrote: »

I can think of one lender which will take future income into account. We did a case for a teacher back in April not starting work until September.

Which is why a broker is worth their weight in gold (and their fee) - especially with non-vanilla cases.

OP - find yourself an independent broker ASAP