Mortgage broker - ask me anything

K_S

homeless9 said:

I will be remortgaging in the near future and was wondering if rules have become stricter as to how overtime pay if viewed?

I fear I may not be earning enough to borrow what I need, so plan to do some overtime throughout the 3 months before remortgaging just so I can borrow more.

Can you get away with this these days?

@homeless9 If you're looking for a like-for-like remortgage, affordability is often relaxed. If you're still not able to meet affordability, you should still be able to do a rate-switch/product-switch/product-transfer with your current lender without any income checks or underwriting.

If you're looking to borrow more then all your income will come into the picture. Generally speaking, the treatment of variable pay components is a bit stricter than it used to be before covid, plus lender affordability in general has tightened significantly in the past few months since the rampant inflation numbers came out.

The treatment of OT can differ significantly across lenders, there's no single approach to it.

Which approach suits your requirements best will depend on the details. For example lender A might take the lowest of the last 3 payslips and take 100% of it while lender B might take the average of 3 months and use 30/50/60% of it for affordability. Some will require the numbers to be in line with the year to date figures, others may need it to reflect on the most recent P60, etc. 

James_D

Hi K_S, in your experience, do lenders tend to check job status after a mortgage offer is received - at exchange, completion, or both? If so, what do they tend to do? For example ask for payslips, check with employer directly? I may be looking to start in another role and just wonder whether it would disrupt the process. Thanks!

K_S

James_D said:

Hi K_S, in your experience, do lenders tend to check job status after a mortgage offer is received - at exchange, completion, or both? If so, what do they tend to do? For example ask for payslips, check with employer directly? I may be looking to start in another role and just wonder whether it would disrupt the process. Thanks!

@james_D Not regularly but it depends on the specific lender, the applicant's profile, whether it gets picked up for an audit, etc.

If they do want to re-verify employment, with mainstream lenders it's usually looking at payslips, or payslip+bank statement or (less commonly) an employer's reference.

If you do think that you may change roles between offer and completion, it might be worth flagging that with your broker in advance so that they can highlight any potential issues from it (eg: if you have variable income that is needed for affordability) and avoid lenders that will need to see a full payslip or 3 months in a current role. There are plenty of mainstream lenders who'll be happy to consider the basic salary on a contract that has just started or will start soon so a new job before completion wouldn't necessarily be an issue and the difference in rates (if any) would be minimal.

James_D

K_S said:

James_D said:

Hi K_S, in your experience, do lenders tend to check job status after a mortgage offer is received - at exchange, completion, or both? If so, what do they tend to do? For example ask for payslips, check with employer directly? I may be looking to start in another role and just wonder whether it would disrupt the process. Thanks!

@james_D Not regularly but it depends on the specific lender, the applicant's profile, whether it gets picked up for an audit, etc.

If they do want to re-verify employment, with mainstream lenders it's usually looking at payslips, or payslip+bank statement or (less commonly) an employer's reference.

If you do think that you may change roles between offer and completion, it might be worth flagging that with your broker in advance so that they can highlight any potential issues from it (eg: if you have variable income that is needed for affordability) and avoid lenders that will need to see a full payslip or 3 months in a current role. There are plenty of mainstream lenders who'll be happy to consider the basic salary on a contract that has just started or will start soon so a new job before completion wouldn't necessarily be an issue and the difference in rates (if any) would be minimal.

Thank you for this! Do you have any insights specific to Clydesdale Bank and how common it is that they might do this? I've got a newly qualified professional's mortgage product and so I thought that a check might be more likely. 
Thanks so much!

K_S

James_D said:

K_S said:

James_D said:

Hi K_S, in your experience, do lenders tend to check job status after a mortgage offer is received - at exchange, completion, or both? If so, what do they tend to do? For example ask for payslips, check with employer directly? I may be looking to start in another role and just wonder whether it would disrupt the process. Thanks!

@james_D Not regularly but it depends on the specific lender, the applicant's profile, whether it gets picked up for an audit, etc.

If they do want to re-verify employment, with mainstream lenders it's usually looking at payslips, or payslip+bank statement or (less commonly) an employer's reference.

If you do think that you may change roles between offer and completion, it might be worth flagging that with your broker in advance so that they can highlight any potential issues from it (eg: if you have variable income that is needed for affordability) and avoid lenders that will need to see a full payslip or 3 months in a current role. There are plenty of mainstream lenders who'll be happy to consider the basic salary on a contract that has just started or will start soon so a new job before completion wouldn't necessarily be an issue and the difference in rates (if any) would be minimal.

Thank you for this! Do you have any insights specific to Clydesdale Bank and how common it is that they might do this? I've got a newly qualified professional's mortgage product and so I thought that a check might be more likely. 
Thanks so much!

@james_D If you're depending on Clydesdale's enhanced 5.5x enhanced affordability for the professionals product, then I guess your lender choices are limited.

I don't use Clydesdale regularly enough to give any specific insights but afaik they don't have an issue with new jobs as long as continuous employment can be demonstrated and the change makes sense.

James_D

K_S said:

James_D said:

K_S said:

James_D said:

Hi K_S, in your experience, do lenders tend to check job status after a mortgage offer is received - at exchange, completion, or both? If so, what do they tend to do? For example ask for payslips, check with employer directly? I may be looking to start in another role and just wonder whether it would disrupt the process. Thanks!

@james_D Not regularly but it depends on the specific lender, the applicant's profile, whether it gets picked up for an audit, etc.

If they do want to re-verify employment, with mainstream lenders it's usually looking at payslips, or payslip+bank statement or (less commonly) an employer's reference.

If you do think that you may change roles between offer and completion, it might be worth flagging that with your broker in advance so that they can highlight any potential issues from it (eg: if you have variable income that is needed for affordability) and avoid lenders that will need to see a full payslip or 3 months in a current role. There are plenty of mainstream lenders who'll be happy to consider the basic salary on a contract that has just started or will start soon so a new job before completion wouldn't necessarily be an issue and the difference in rates (if any) would be minimal.

Thank you for this! Do you have any insights specific to Clydesdale Bank and how common it is that they might do this? I've got a newly qualified professional's mortgage product and so I thought that a check might be more likely. 
Thanks so much!

@james_D If you're depending on Clydesdale's enhanced 5.5x enhanced affordability for the professionals product, then I guess your lender choices are limited.

I don't use Clydesdale regularly enough to give any specific insights but afaik they don't have an issue with new jobs as long as continuous employment can be demonstrated and the change makes sense.

I am indeed - hence my hesitation to disrupt the process! It is just my income that got us the mortgage offer, and my partner recently finished studies and has a job lined up so we probably wouldn't need a 5.5x mortgage product if we applied somewhere else again, but we locked in a good interest rate so I suppose best not to rock the boat.. thanks very much again for your help, it's always really useful.

James

bubby08

@K_S Hi K_S, I was wondering do you know what the standard lending parameters are when re-mortgaging a property that is being renovated? I’ve had a valuation, but somewhat worried that although the property has hot water toilet bath it is in the midst of a full renovation and I’ve had stay at my in-laws for a couple of weeks whilst some work is being undertaken. Is this going to be a problem down the line?

thanks for your help 

K_S

bubby08 said:

@K_S Hi K_S, I was wondering do you know what the standard lending parameters are when re-mortgaging a property that is being renovated? I’ve had a valuation, but somewhat worried that although the property has hot water toilet bath it is in the midst of a full renovation and I’ve had stay at my in-laws for a couple of weeks whilst some work is being undertaken. Is this going to be a problem down the line?

thanks for your help 

@bubby_08 If you take a look at pages 29-30 of the Nationwide valuer's manual, you'll get a general idea. Just to be clear, this is not to say that every mainstream lender will follow the same approach.

bubby08

@K_S Hi thank you, I’m struggling to understand the grid what does MRV and FARR mean as in some instances the say the same and conflicting things. In my circumstances the work being undertaken is more than £1000 hence the remortgage thanks

K_S

bubby08 said:

@K_S Hi thank you, I’m struggling to understand the grid what does MRV and FARR mean as in some instances the say the same and conflicting things. In my circumstances the work being undertaken is more than £1000 hence the remortgage thanks

@bubby08 As far as I can tell, in your case it's the MVR that applies. Apologies, I'm not an expert in the these matters so can't really add any useful comments.

In any case, there's nothing much you can do besides wait for the valuer to return their report, which should not take more than 1-2 working days at most. Hope it comes through fine, good luck!