Mortgage broker - ask me anything

K_S

iBruno said:

Hi.

When submitting tax year overviews to lenders for self employed, what are they looking for?

I haven't really paid any attention to mine before now. My self assessment is pretty straight forward but I owe about £700 PAYE which I'm paying in monthly installments. Will the lender be wary of that?

@ibruno By 'installments', I'm assuming you mean being collected through an adjustment of your PAYE Tax code? I don't see anything to be concerned about from what you've said in the post. The TYO confirms that you have submitted a self-assessment following which HMRC has produced a TYO.

crispy99

I’ve got to the final checks on our mortgage application and the lender is now questioning a £100 payment I made to debt collectors in December, it was the last payment for historic council tax debt. It’s not on my credit file and I literally have no other debt. 

They said they need to think about it and make a decision as DMPs should be settled a min of 2 years ago. Does this really could as adverse credit if it’s not on my credit file or even a dmp? 

It just seems crazy that if I applied again in a few weeks they wouldn’t have that bank statement to even know about it.

iBruno

K_S said:

iBruno said:

Hi.

When submitting tax year overviews to lenders for self employed, what are they looking for?

I haven't really paid any attention to mine before now. My self assessment is pretty straight forward but I owe about £700 PAYE which I'm paying in monthly installments. Will the lender be wary of that?

@ibruno By 'installments', I'm assuming you mean being collected through an adjustment of your PAYE Tax code? I don't see anything to be concerned about from what you've said in the post. The TYO confirms that you have submitted a self-assessment following which HMRC has produced a TYO.

Thank you for getting back to me. 

When the self assessment was submitted in January 2022, I had the option of paying the tax bill over a few months rather than in one go. It's direct debit not PAYE. It was about £1500 and now it's £700.

But we've done everything as we should have I think. I hope.

K_S

iBruno said:

K_S said:

iBruno said:

Hi.

When submitting tax year overviews to lenders for self employed, what are they looking for?

I haven't really paid any attention to mine before now. My self assessment is pretty straight forward but I owe about £700 PAYE which I'm paying in monthly installments. Will the lender be wary of that?

@ibruno By 'installments', I'm assuming you mean being collected through an adjustment of your PAYE Tax code? I don't see anything to be concerned about from what you've said in the post. The TYO confirms that you have submitted a self-assessment following which HMRC has produced a TYO.

Thank you for getting back to me. 

When the self assessment was submitted in January 2022, I had the option of paying the tax bill over a few months rather than in one go. It's direct debit not PAYE. It was about £1500 and now it's £700.

But we've done everything as we should have I think. I hope.

@ibruno In that case, depending on how many instalments are left, and the specific lender policy, it may either be treated as a committed outgoing (potentially reducing your maximum borrowing) or ignored as it's due to end 'shortly' (defined differently depending on the lender). Given that it was £1500 in Jan and £700 now in March, I'm assuming its only got another couple of payments to run, so probably won't be material to your application.

K_S

crispy99 said:

I’ve got to the final checks on our mortgage application and the lender is now questioning a £100 payment I made to debt collectors in December, it was the last payment for historic council tax debt. It’s not on my credit file and I literally have no other debt. 

They said they need to think about it and make a decision as DMPs should be settled a min of 2 years ago. Does this really could as adverse credit if it’s not on my credit file or even a dmp? 

It just seems crazy that if I applied again in a few weeks they wouldn’t have that bank statement to even know about it.

@crispy99 Well, tbh your broker should have picked this up when he/she reviewed your bank statements. If it is related to a DMP which ended only in December, and the lender criteria is that DMPs should have been settled 2+ years ago, then it's down to their discretion. Hopefully, they will override the policy in this case, good luck!

iBruno

Thanks for that, yes it's got about 3 months left.

crispy99

K_S said:

crispy99 said:

I’ve got to the final checks on our mortgage application and the lender is now questioning a £100 payment I made to debt collectors in December, it was the last payment for historic council tax debt. It’s not on my credit file and I literally have no other debt. 

They said they need to think about it and make a decision as DMPs should be settled a min of 2 years ago. Does this really could as adverse credit if it’s not on my credit file or even a dmp? 

It just seems crazy that if I applied again in a few weeks they wouldn’t have that bank statement to even know about it.

@crispy99 Well, tbh your broker should have picked this up when he/she reviewed your bank statements. If it is related to a DMP which ended only in December, and the lender criteria is that DMPs should have been settled 2+ years ago, then it's down to their discretion. Hopefully, they will override the policy in this case, good luck!

I really thought a dmp was a type of plan to consolidate all debts into a single plan over a certain period. This is directly with the council, just the department is called enforcement so they picked up on this on the bank statement. Ah just impossible to get this over the line, I’m going to have to wait until my next statement so I don’t have to show Decembers I guess.
  

bubby08

Hi K_S

I have a couple of questions I have an existing default which I have disputed but not got anywhere with. Long story. However it will be six years old early next year. I have checked my credit score on Experian and equifax and although the core data seems the same, searches etc seem different by credit score is very poor on Experian and very good on equifax. Can you advise how this will possibly affect my application. Also around the last two years ago I become a company director and shareholder, I have just completed my latest tax return, does the figure owed and repayments have an affect. This mortgage application is actually for a re-mortgage on a property that has no mortgage outstanding. 

Many Thanks K_S

K_S

bubby08 said:

Hi K_S

I have a couple of questions I have an existing default which I have disputed but not got anywhere with. Long story. However it will be six years old early next year. I have checked my credit score on Experian and equifax and although the core data seems the same, searches etc seem different by credit score is very poor on Experian and very good on equifax. Can you advise how this will possibly affect my application. Also around the last two years ago I become a company director and shareholder, I have just completed my latest tax return, does the figure owed and repayments have an affect. This mortgage application is actually for a re-mortgage on a property that has no mortgage outstanding. 

Many Thanks K_S

@bubby08 There's a few things going on there, but very very generally speaking -
- one 5+ year old default *should not* stop you from getting a mortgage. What rate/lender etc will depend on the specifics and the rest of the background.
- you can safely ignore the Experian/Clearscore/CreditKarma 'credit-score', it's only the core data that matters.
- if you're paying a tax bill in instalments, depending on the time remaining, it may be factored in as an outgoing. Whether or not that will impact you will depend on the numbers. 

bubby08

K_S

Many Thanks I am only looking to remortgage half the the value of the property and as I said there is nothing outstanding on the property. Thank you for advice regarding the score according to the both CRA the only adverse factor is the default.

when you say time remaining on my personal tax bill, I just pay monthly installments as far as I am aware there isn’t deadline in terms when it needs to repaid.

Thank you so much K_S