Lending criteria has changed?

[Deleted User]

I approached a L&C broker to remortgage as our 4.24% 2 yr fixed comes to an end next month and they told me that they can't help us because none of the banks would lend to us? They told us to go back to our current lender (A&L). DH is on 50K and I am home with my son, we need to borrow £160K (house worth £500K). Our earnings haven't changed since we bought the house 2 years ago. We have an immaculate credit record, no debts, never been in red etc. It sounds that the lending criteria have changed? I am bummed that we won't be able to shop around.

Jonbvn

From the info you have supplied, I would expect lenders would be happy for your business. Specifically:

1. LTV = 32%
2. Loan = 3.2 x income (seems reasonable).

What has changed since you took out the original mortgage? I would suggest you try another mortgage broker.

herbiesjp

Seems very strange

I can think of plenty lenders looking to agree this for you

What kind of property is it? What area of London?

[Deleted User]

Nothing has changed since we bought the property We also have £8K in savings. The broker said that now lenders look at the net income rather than gross when they calculate affordability, also the fact that I don't work and have a son doesn't help. He said that assuming that my DH's net earnings are £35K, we can't borrow £160K.
It's a detached house in the Borough of Barnet. It's probably worth more than £500K now. So have lending criteria really changed that much?

Mr_helpful

All I can say is that I wish most of my clients were like this. I can see no reason why you shouldnt get an easy remortgage. You should check what A&L offer first though

herbiesjp

This really does look straightforward

I know the house prices well around Barnet as I live up in North Finchley, so the figures you quote are totally realistic

Can't understand what L&C have said. See what A&L can offer and then have a word a different fee free whole of market adviser to compare, and see if it is worth changing lender

HelpWhereIcan

This sounds a bit like a gross profit / net profit discussion. Is your DH self employed or a contractor? Lenders will (and always have) only consider the net profit figure.

Having said that 160 is still only 4.5 ish x 35, so quite a few lenders should still be willing to look at this for you.

The main issue I have been having with Affordability calculators has been the term of the mortgage restricting the loan amount.

Like everyone else I am a bit confused about the info you have been given.

Get some more advice from a different whole of market broker... ideally one local to you who can deal face to face.

Ideally use personal reccomendations to pick one or even something like the Yellow pages etc.

No harm in speaking to more than one and always make sure to ask the questions Martin suggests in http://www.moneysavingexpert.com/cgi-bin/viewnews.cgi?newsid1101649966,86816#step2.

Hope this helps

Good Luck

[Deleted User]

Is your DH self employed or a contractor?

He is the Director of a small Limited company, so I guess he is seen as self-employed.

Anyway, I spoke to our current lender this morning and their deals aren't too bad so we have decided to stick with them for another couple of years. Thanks everyone for your help!

[Deleted User]

The main issue I have been having with Affordability calculators has been the term of the mortgage restricting the loan amount.

We have 18 years left, but we overpay a little to pay it off quicker.