Wrong wording? Or rejection?

dk5294

Received this from Leeds Building Society today.

"We have been unable to verify the declared income from the supplied income documents in order to <b>prevent</b> maximum loan, so we have sent for an employee reference. The income will be re-assessed once this has been returned."

Not sure if it's a badly worded letter or if that note isn't meant to be there.

ACG

It sounds like as things currently stand they will lend to you, but not the amount requested as your payslips/P60s do not confirm what you have put on your application.

So in order to lend you the amount requested, they want a letter from your employee to confirm your income.

If you have put the correct figures on your application there is nothing to worry about. I am assuming you hae either had a recent payrise or you are looking to use overtime/bonuses.

dk5294

Yes, guaranteed bonus at Xmas and overtime which is regular. Unless he's on holiday he has at least 2hrs overtime.

I'll give a breakdown if you can tell me what you think?

Everything is annually

Basic salary -£13832
Delivery supplement (written in contract and advised it class as basic salary) £884
Overtime £1536 (took last 3 months and averaged it at £35 a week, this is the lowest he makes a week and multiplied it by 48 to account for 4wks of the year he is on holiday) LBS only take 50% of this though.
Guaranteed bonus of £140 at Xmas.

He has £253 a month to pay on car finance, which ends in 3yrs. I pay this and will continue to though as I asked him to finance the car and I've always paid it. I know they don't care and still hold him responsible for the payment.

Requested 50k on a 68% LTV. Leeds say they will lend up to 4.5 times income, so in my calculations he's fine...but I'm not so sure now.

ACG

To be honest I would not want to comment. I do not use Leeds as we tend to go after different parts of the market but providing you entered those figures as they would expect you should be fine. If not it sounds like they will reduce the loan amount.

Easier said than done but there is nothing you can do until they hear from your employer so it's just a case of waiting and trying not to worry as there is nothing you can do for the time being.

dk5294

Thanks ACG.

Royal Mail supposedly aren't too forthcoming with confirming employee information and supposedly only state the basic. If this is the case, do lenders tend to look at payslips for regular overtime etc?

dk5294

Also meant to ask, when a lender says they will lend up to 4.5 times your income, does that actually mean they will times your income by 4.5 and then make a decision before reducing the loan amount?

ACG

Some lenders would ask for a p60 or 12 payslips but I don't know Leeds stance.

Up to 4.5x is the maximum they would lend. There are affordability checks they do.

Presumably you or your broker checked the criteria and affordability calculations before applying?

dk5294

Yes and they were above what was required. We did contact a broker after we had a DIP. They looked at payslips etc and said they everything had been put in as they would but they advised to do an execution only mortgage.

So I have no one to discuss this with haha!

ACG

Ah. I'm always happy to try and help but it is difficult to be anything significantly more than generic without seeing the payslips and running it by their criteria and affordability.

If Leeds do not lend you what you need I'm sure there will be others lenders as Leeds are not the most flexible lenders I have come across, although I have only used them 2-3 times in as many years.

dk5294

We don't have many lenders to choose from as it's a shared equity lender we need. A lot do help to buy but not the LIFT scheme.

Another complication is my husbands hours went up and he received a contract to say this, but they've said it's a temporary change but there is no end date. We were advised to use his current income which is the figure above. I'm now starting to wonder if they will use his current contract or his original one to verify basic salary. He did ask HR and they couldn't tell him when his hours would/if they'd change again either.