Mortgage & Student Loan

HampshireH

Mortgage application is in but Virgin have requested I pay off my student loan before an offer can be made.

I was always under the impression student loans weren't assessed in this was for affordability. I can understand why they would be but I never anticipated having to pay the balance.

Thankfully I'm in my last 6 months so this isn't huge and has now been done. Just wondered if anybody else had been required to do so.

Student loan company less than helpful in evidencing full settlement has taken place:(

ACG

Did you say it would be cleared on the application?
I have never known it to be a requirement, but in saying that I do enter it on the application and affordability so I know it will not need to be cleared when I tell my customers how much they can lend.

walkersneed

SLC shouldn't give you too much trouble with regards to a letter confirming that your balance has been cleared.


They may want to hedge and say 'Given your one-off payment of xxxx, and your confirmation of xxx paid out of your salary in the current tax year, I can confirm that your balance is cleared.'


This is along the lines of what I received on the letter they posted to me. I can check the exact wording if you'd like.

HampshireH

Hi thanks for coming back to me.

Not advised anything on the application except I had 6 months left. The mortgage broker told me not to worry about it & he put it down so I didn't expect to have to pay it off before an offer is *hopefully* made.

The SLC now nèed to fax my advisor (apparently SLC don't do email) to advise I have paid.

Thankyou walkersneed. That's exact what I am hoping they will say and quickly p:beer:

ACG

Speak to your broker.
Your broker may have ticked the box to say it will be cleared by completion - which is why it is on there.

Some lenders will ignore commitments if they have less than 6 months left to run, I am not sure if Virgin are one of them. But speak to your broker, it may just be a case of getting the offer re-issued without that condition on there.

HampshireH

I've paid it now so not the end of the world. But it was a surprise and it was cash I didn't expect to spend upfront.

They have said any offer relies on it being paid (hence payment being made).

Caraway90

I still have a lot of student loan to pay off and it wasn't part of the assessment for our mortgage at all. Personally I think people should think of it as a tax instead of loan - if you aren't earning over the threshold you don't make any payment that month, standard loans do not have those sort of terms.

From my experience the amount of student loan "debt" you have is not taken into account when being assessed for mortgage affordability. If your net pay is enough to afford the repayments (after any student loan deductions have been taken) that is all that matters, not the total amount left to pay back.

femster82

HampshireH wrote: »

Mortgage application is in but Virgin have requested I pay off my student loan before an offer can be made.

I was always under the impression student loans weren't assessed in this was for affordability. I can understand why they would be but I never anticipated having to pay the balance.

Thankfully I'm in my last 6 months so this isn't huge and has now been done. Just wondered if anybody else had been required to do so.

Student loan company less than helpful in evidencing full settlement has taken place:(

I've just had this exact situation today from West Brom Building society, my guess is since I only have 7 months left to pay my student loan and pay by DD they probably added it into affordability. I also guess my broker said I would pay it off thinking it wouldn't be necessary as it was 7 months left to pay.

I had a very long conversation with the SLC today and getting proof is not as easy as it seems. They said the fastest way they can send it is to FAX it, I said I don't even know anyone who still uses fax. If not I have to wait 10-14 days for the confirmation.

Has anyone had luck with this and do you think it'll cause issues with my offer? We are waiting for the underwriter to tell us if a statement or receipt of payment will be enough.

HampshireH

Exact same response by SLC for Me! Uselsss. They also never sent the fax and told me that they cannot guarantee it will get sent as they have a lot of customers!


I ended up providing my last SLC statement to show how much I owed (portal online only updates with manual payments or annually so useless) & every payslip this financial year to evidence my outstanding balance. I then paid it off and sent that transactions statement so they could marry it a up.

Now still waiting for a decision

HampshireH

Femster - Good luck! I have called them again today and they advised they hadn't sent either fax (based on the 2 requests) or the letter!

Useless. They have now put in a 3rd request. They also acknowledged that both times was due to the form completed by their team missing information - (2 different people) and that on neither occasion the errors were fed back to be rectified and that they don't have a process in place where they would bother to make contact with the customer to advise them - or resend the request - they just ignore them!