Mortgage in Principle - What are my rights?

luckylouise08

Hello,

I have been trying to get a mortgage and finally got a decision in principle for the amount that I require for the mortgage. The lender has now turned around and said they will lend me over £23k less due to my payslips not showing my basic pay and overtime separated. I just wondered what my rights are as they had seen all my documents, payslips and a very thorough lot of paperwork so I cannot understand how they can say at this late stage that they won't lend me the amount i need when they already knew how i was paid. Please can anyone help. Even got down to the valuation stage at their end so the application process has gone very far to be told I will not be leant what i need. I feel i have been misled. It would be fine to accept if it was less money due to inaccuracies on my pay or bad credit score or the valuation being the problem but i think i should not have been given a mortgage in principle at the amount i got approved for. Any thoughts?

ACG

A mortgage in principle is worthless.
It is a credit check with basic information entered.

Full application is submitted along with payslips where it is assessed by an underwriter (not the advisor/broker) and then a business decision is made based on the lenders criteria.

You could appeal the decision and ask what (if anything) you can provide in order to get them to review or overturn their decision, but I would be more inclined to look for an alternative lender. I suppose there is nothing stopping you from doing both.

muhandis

The AIP usually mentions that the decision is subject to full underwriting, which is presumably when they came back with a mortgage offer of 23k less.

My Nationwide AIP was issued on the basis of what I told them and a snapshot of my credit report. The NW mortgage offer is issued on that plus review of the supporting documentation and credit report.

Unfortunately, I don't think you can hold them to what's given in an AIP.

luckylouise08 wrote: »

Hello,

I have been trying to get a mortgage and finally got a decision in principle for the amount that I require for the mortgage. The lender has now turned around and said they will lend me over £23k less due to my payslips not showing my basic pay and overtime separated. I just wondered what my rights are as they had seen all my documents, payslips and a very thorough lot of paperwork so I cannot understand how they can say at this late stage that they won't lend me the amount i need when they already knew how i was paid. Please can anyone help. Even got down to the valuation stage at their end so the application process has gone very far to be told I will not be leant what i need. I feel i have been misled. It would be fine to accept if it was less money due to inaccuracies on my pay or bad credit score or the valuation being the problem but i think i should not have been given a mortgage in principle at the amount i got approved for. Any thoughts?

Neutrinno

Rights? It is the lender's money, if they aren't happy that your income doesn't stack up to what you have told them then it is their discression as they are the ones personally lending you tens of thousands of their money.

I'm guessing when you or your broker has keyed the DIP this has been done incorrectly compared to how you are actually paid, so the error is there not with the lender.

Thrugelmir

luckylouise08 wrote: »

due to my payslips not showing my basic pay and overtime separated.

In this computerised age why not would be the question I would be asking. How do you know that you are being correctly paid. Something to take up with your employer as a most unusual practice.

AnotherJoe

You don't have any "rights" it's up to each lender to make their own rules subject to governments overrides. Perhaps,as per previous post, ask your employer why they dont separate them out.
Couldn't you get a signed document from HR stating the split !

kingstreet

TBH this never happens to us because we have to fully understand how the lender is going to view what is on your payslips before we submit the application.

If we have any doubts, we seek guidance and if we have any concerns, we find another lender, or at the minimum discuss the situation with the client first.

We might also establish the position and find out if an employer's reference would straighten out the payslip situation by showing contractual hours and the nature of overtime, regular or guaranteed, shift allowance etc.

No broker should be submitting a case wondering what the lender is going to do.

luckylouise08

Thanks perhaps the broker hadn't done all they could to represent my situation as best they could have. I'm really disappointed as we even got a whole year's breakdown document put together covering my basic pay, overtime and mileage separated out which was submitted to the lender and signed off by my employer before they had said £23,000 less was going to be offered due to the way my payslips don't separate the basic pay, overtime and mileage. This has now got me worried that by the time i make my next application that i am going to have the same problem with my pay and my employer is not willing to separate these on my payslips frustratingly. I don't want this to be the reason i get rejected or offered a lot less money next time around. I know this time i have probably missed the boat as the property i wanted, the owner quite rightly didn't accept my offer of £23k less (i had already got the owner agreeing to sell at around £10k less anyway). I am waiting to get the bank to actually send me the offer as i have not heard whatsoever from the bank itself...only via the broker which is concerning me as well as i would quite like to hear from the bank directly. Thanks for the reply anyway.

amnblog

Sounds like these three source of revenue were submitted as basic income when two of them are not. The overtime is likely to be halved before consideration, the mileage allowance discounted.

Crossed wires here, as KS says, the broker should have been aware so that this could have been factored in at the start.

Don't wait from an 'offer' from the Bank. You are not at that stage.

luckylouise08

amnblog wrote: »

Sounds like these three source of revenue were submitted as basic income when two of them are not. The overtime is likely to be halved before consideration, the mileage allowance discounted.

Crossed wires here, as KS says, the broker should have been aware so that this could have been factored in at the start.

Don't wait from an 'offer' from the Bank. You are not at that stage.

Does that mean that the broker is at fault then? I was already given a Mortgage in Principle by the bank when they had all of my documents that i had given to the broker including the breakdown of my income, so they had all the facts. I really don't understand why they would agree then say no when they had all of the information at that stage. It just seems really bizarre to me and i do feel like i haven't been told the full truth or been represented properly by the broker.

muhandis

Given that you submitted an employer certified year's breakdown of income to the broker, it does look like he didn't put it through accurately or was just plain careless.

The MIP you got is based on numbers input online by your broker, the bank does not review your documents at that stage.

In your place, if you have paid a fee I would ask for a refund and if I was still looking for a mortgage, find another broker.

luckylouise08 wrote: »

Does that mean that the broker is at fault then? I was already given a Mortgage in Principle by the bank when they had all of my documents that i had given to the broker including the breakdown of my income, so they had all the facts. I really don't understand why they would agree then say no when they had all of the information at that stage. It just seems really bizarre to me and i do feel like i haven't been told the full truth or been represented properly by the broker.