Application declined

Newmummy2b

My husband and I wanted to buy a larger new build property but before we could reserve, we had to have sale agreed on our house. We managed to put our house on the market and get a cash buyer within 2 weeks on the market at the end of 2019, meaning we could reserve the new build plot we wanted, estimated completion May 2020. The buyer couldn’t wait for our new house to be built and wanted a sale ASAP, so we arranged with my parents, to move our family into their house temporarily, until our new home was ready. Unfortunately as things progressed, the legal pack became less appealing and we were not  happy with the customer care received from home builder, so we withdrew our reservation in Feb 2020 and cut our losses. We had a full mortgage offer for this house from a large well known bank. We decided a house on the open market was the way forward and began our search. We agreed to a completion date on our sale for the end of March, thinking we had arranged to stay with family and could still do this, putting us in a good position to buy somewhere new.  

We finally found a property to buy in March, put in an offer and our broker submitted a revised application to said bank. All was going well until Covid lockdown was announced. The bank were about to make an offer but wanted clarification how lockdown had effected us. 

I am an NHS worker and unaffected financially. My husband is self-employed and CIS contracting. His site went into lockdown but he decided that rather than sit and wait for the self employed furlough type payment, he’d see if he could get alternative work rather than claim. He managed to get further work the following week, on a similar CIS basis for similar money. They have advised they will have work for him until his old site reopens alternatively they’d be happy to keep him on longer term, if he wanted to stay. 

Having declared all this to the bank, they have declined a mortgage offer. They advised, if my husband is furloughed and we have proof of this, they’d accept this and make an offer based on the 80% wage earnings.  It appears, because he’s tried to do the right thing and keep money coming in, that’s gone against us. 

It doesn’t make sense and seems really unfair. He’s had continuous earnings so we have appealed the decision but it’s been a week, and we’re still waiting to hear anything back. I can’t believe how our situation has turned out, such bad luck!! 

BrassicWoman

I'm a bit confused because if he's self employed, he can't be furloughed - so not much choice but to work? The SE scheme is not like furlough at all, and if the bank want a furlough agreement, it won't do the trick. I think finding new work is a good move.

Slithery

Unfortunately most lenders have now tightened their belts and are no longer willing to lend to as many people.

Your best option would be to employ the services of a broker and see if they can find you a more willing lender.

Newmummy2b

BrassicWoman said:

I'm a bit confused because if he's self employed, he can't be furloughed - so not much choice but to work? The SE scheme is not like furlough at all, and if the bank want a furlough agreement, it won't do the trick. I think finding new work is a good move.

It may not be called furloughed as he’s self employed but he will be entitled to 80% of his earnings the government are promising because he submitted a tax return for 2018/19. However, he decided to work instead so we don’t anticipate claiming for anything. 

I’m worried sick at how long we will now have to wait before we will even be considered for a mortgage. We can’t live with my parents for too long.  

Newmummy2b

Slithery said:

Unfortunately most lenders have now tightened their belts and are no longer willing to lend to as many people.

Your best option would be to employ the services of a broker and see if they can find you a more willing lender.

We are using a broker. I hope they reconsider us after our appeal, the fact my husband can find work at this time must prove we are decent, honest, hard working people - which I know counts for nothing these days but I’m keeping everything crossed they have some common sense. The uncertainty is so stressful.

Doozergirl

I think you gave them too much info. 

To all intents and purposes, your husband was, and is still, self employed.  He hasn't stopped earning at all.  

He can't be furloughed if he's CIS because that is self-employment.  They don't know what they're talking about.  

Newmummy2b

Doozergirl said:

I think you gave them too much info. 

To all intents and purposes, your husband was, and is still, self employed.  He hasn't stopped earning at all.  

He can't be furloughed if he's CIS because that is self-employment.  They don't know what they're talking about.  

I absolutely agree with you, I wish I’d just replied and said we are both continuing to work and earn money. Very hard lesson learnt! 😢