Mortgage broker - ask me anything

lantanna

Hi KS, 

Broker is asking for bank statements for my parent to show gifted deposit build up. Lender is NatWest, I’ve just checked the website and see nothing about this just gifted letter form. Is this typical? Parent will go nuts if I ask for this, due to age and generally feeling they shouldn’t be under assessment when all they are doing is giving a gift! 

Soku

Is it ok to ask bank directly about progress of the mortgage application if broker is not calling back or replying to my emails?

K_S

lantanna said:

Hi KS, 

Broker is asking for bank statements for my parent to show gifted deposit build up. Lender is NatWest, I’ve just checked the website and see nothing about this just gifted letter form. Is this typical? Parent will go nuts if I ask for this, due to age and generally feeling they shouldn’t be under assessment when all they are doing is giving a gift! 

@lantanna Lenders, brokers and solicitors are legally obligated to do AML checks which in house purchases primarily involves getting sufficient assurance over the source of deposit. The law doesn't say exactly what you need to do so each can have their own policy/processes which also involves some subjectivity.

Solicitors asking for deposit buildup (6 months statement for example) from giftors is quite common, they're doing it for themselves and on behalf of the lender. I personally don't go to that level unless there are some flags but do highlight to the client that the solicitor will most likely ask for it.

Don't know if that helps but hopefully that somewhat answers your question!

K_S

Soku said:

Is it ok to ask bank directly about progress of the mortgage application if broker is not calling back or replying to my emails?

@soku Of course, though some lenders will point you back to your broker.

Except for a few, most competitive mainstream lenders are taking ages to process applications at the moment so it might just be that it's sitting in a queue. Even so, your broker should be responding to your queries about progress.

Soku

K_S said:

Soku said:

Is it ok to ask bank directly about progress of the mortgage application if broker is not calling back or replying to my emails?

@soku Of course, though some lenders will point you back to your broker.

Except for a few, most competitive mainstream lenders are taking ages to process applications at the moment so it might just be that it's sitting in a queue. Even so, your broker should be responding to your queries about progress.

They have received the last document they asked for on Friday and my application is still sitting in the queue to be reviewed by underwriter.

It takes so long. Our expiry date for the new build reservation expires in two days. There's no chance we'll have an offer by then. Are developers likely to extend reservation for another 2-3 weeks?

Kimonos88

Hi KS,

my broker submitted my NatWest mortgage application last Thursday but one thing I’m anxious about is the overtime. I have overtime on every payslip in the past 6 months apart from Januarys. Will they still take my overtime into account?

K_S

Soku said:

K_S said:

Soku said:

Is it ok to ask bank directly about progress of the mortgage application if broker is not calling back or replying to my emails?

@soku Of course, though some lenders will point you back to your broker.

Except for a few, most competitive mainstream lenders are taking ages to process applications at the moment so it might just be that it's sitting in a queue. Even so, your broker should be responding to your queries about progress.

They have received the last document they asked for on Friday and my application is still sitting in the queue to be reviewed by underwriter.

It takes so long. Our expiry date for the new build reservation expires in two days. There's no chance we'll have an offer by then. Are developers likely to extend reservation for another 2-3 weeks?

@soku Can't speak for your case specifically but I don't see why they'd take a hard-line on it if they know that the mortgage app is being processed, especially if the valuation has been arranged/completed.

K_S

Kimonos88 said:

Hi KS,

my broker submitted my NatWest mortgage application last Thursday but one thing I’m anxious about is the overtime. I have overtime on every payslip in the past 6 months apart from Januarys. Will they still take my overtime into account?

@kimonos88 Sorry I don't remember their policy off of the top of my head but I'm pretty sure your broker would've run it past them before putting in the application.

Connoisseurus_Rex

I've just posted about this but trying here in case it's more active. 

I've worked for an overseas company full time since 2019, I invoice them each month for my salary, which is set out in the terms of my contract. I'm "self-employed" in the UK but my income isn't really variable except for the payrises I've had in that time. Would a lender ever accept a contract as proof of earnings rather than previous years tax returns? Feels like a quirk of the system where I'm effectively an employee but not treated as such by banks. 

I'm now being paid more than I was previously, but if a lender uses my tax returns, what I can borrow is far less. Seems ridiculous that an employee earning 30% less than me could actually get a larger mortgage.

K_S

Connoisseurus_Rex said:

I've just posted about this but trying here in case it's more active. 

I've worked for an overseas company full time since 2019, I invoice them each month for my salary, which is set out in the terms of my contract. I'm "self-employed" in the UK but my income isn't really variable except for the payrises I've had in that time. Would a lender ever accept a contract as proof of earnings rather than previous years tax returns? Feels like a quirk of the system where I'm effectively an employee but not treated as such by banks. 

I'm now being paid more than I was previously, but if a lender uses my tax returns, what I can borrow is far less. Seems ridiculous that an employee earning 30% less than me could actually get a larger mortgage.

@Connoisseurus_Rex It's hard to give a definitive answer as it depends on the details. If you are registered as self-employed in the UK and submitting self-employed tax returns every year, it's unlikely that mainstream lenders will treat you the same as a PAYE employee.

However, that doesn't automatically mean that you would lose out on affordability as there are lenders who may look at the substance of the income and track record (it's a positive that you have 2+ year to show) to give a better outcome. More likely if you are a 'high-earner' (generally speaking over 75k income).

If you need to maximise borrowing, I would recommend getting in touch with a whole of market mortgage adviser, MSE guide here https://www.moneysavingexpert.com/mortgages/best-mortgages-cashback/

You could first try one of the volume ones and if they aren't interested then move on to others in the list. Good luck!