Mortgage application - lender asking for employer reference letter?

Wellington83

Hi everyone

First time buyer here just looking for some thoughts. We have an application in with Aldermore for £175k on a £233k property with £59k deposit (so LTV of 25%). We went with Aldermore in the end because my husband was previously on a debt management plan, which was paid off 2 years ago. We have a joint salary of £73k. We've used an independent broker who has been absolutely brilliant and he has provided rationale for all of this, which he thinks shouldn't be a problem.

The underwriters have now come back asking for an employee reference letter because my last 3 pay slips are showing considerable sick pay. I'm not sure why this is - I had a couple of weeks off sick back in May/June for a back problem so it could be pro-rata. What I'm concerned about is that I have over the past 2 years had quite a bit of sick leave. This was due to gastrooesophageal reflux disease caused by anxiety and depression after losing my dad in 2016. My mental health has been pretty poor and I've had a fair amount of flare ups but I'm slowly starting to turn a corner now.

I'm not worried about my job security and my sick benefits are very good (6 months full pay and 6 months half pay). I've been working through all of this with occupational health and I'm registered with our work disability support service.

What worries me is will this sick leave end up being a problem for our application? We're trying to buy our first property and I really want it to work out.

Thanks so much

MovingForwards

Have you discussed it with your broker?

It might be they are trying to establish what your actual salary/wage is due to the three wage slips not matching (give or take a bit for tax fluctuations each month).

Wellington83

My mortgage broker explained that from the lender's point of view it's worrying to see so much sick pay because it looks like I've been off for months on end (for example one had -£64 basic pay and over £3000 in sick pay). He thinks it's fine and we can provide a rationale but I'm just really confused why my pay slips would have it logged like that.

G_M

Well what do your pay slips show? We cannot see them from here.


As your broker says, the lender is probably concerned about whether you will be able to cover the monthly mortgage payments. If you receive a reduced salary, and/or just receive statutory sick pay, you may default on the mortgage.


The lender is concerned you might be a poor lending risk.