Mortgage broker - ask me anything

K_S

Bakerman1989 said:

K_S said:

Bakerman1989 said:

K_S said:

Bakerman1989 said:

K_S said:

Bakerman1989 said:

Bakerman1989 said:

K_S said:

Bakerman1989 said:

Any idea on turnaround times for Halifax at the moment?  Our case manager (large national broker) initially said 5 working days almost two weeks ago and has now went almost completely silent on us

@bakerman1989 Has the valuation happened?

Can't speak for your specific application but generally speaking, Halifax are as fast as they usually are - most applications the valuation is instructed immediately (though for physical valuations there can be a delay depending on surveyor availability, access, etc.), processing/underwriting team picking applications up and raising queries up in 1-2 working days, turning around any responses in the same timescales. I've done 2 this month and they've both flown through, though both were fairly straightforward 95% LTV FTB PAYE apps.

So if it's been two weeks with no news it's either that underwriting is complete and they're waiting for the val to be done, or they've raised a query which is sitting with your broker and hasn't been responded to, or it's already gone to offer and you just haven't been told.

Thank you, @K_S.  Finally got an update from the broker that Halifax will update us today or tomorrow.  I'm thinking it must be at valuation as you say as they haven't asked for any more information from us. 

@K_S - turns out it's not valuation, but the fact that Halifax are looking to verify my wife's income. She is a contractor working for a council through an umbrella company.  Halifax have asked for 12 consecutive weeks payslips, but she has been off at least once every few months meaning that the most number of consecutive weeks we can provide is 10.  We're trying to get an employment contract for the umbrella company in lieu of the payslips.  My question - how common sense are Halifax likely to be here?  Is there a way for the broker to escalate it to someone once we provide all the information?  We're told there are no issues re. affordability and we can, if needed, provide 12 months worth of payslips and hopefully an employment contract.

@bakerman1989 Halifax have a pretty clear cut way of calculating income for day-rate contractors paid through umbrella PAYE.

Off of the top of my head, it's the lower of income calculated as follows -

Contract income: day-rate X days/week X 46

Payslip income: gross pay on latest month's (or 4/5 weeks if weekly) payslip adjusted to 46 weeks. Can't remember if it's 4 or 5 weeks.

I wouldn't worry too much, assuming that your broker knew that your wife was a day-rate umbrella contractor and not a perm PAYE employee, they would have done the above calcs and made sure it all aligns to criteria before recommending Halifax.

Thanks again @K_S - it's not so much the affordability we're worried about; it's the inflexibility of the underwriter by insisting on 12 weeks consecutive payslips.  If I speak direct to my broker (instead of the case manager) can he jump on a call with the underwriter to explain, and how receptive are underwriters generally to common sense?  If checklist criteria is 12 consecutive weeks payslips as evidence, do they have any discretion?

@bakerman1989 I think there's some misunderstanding here, perhaps caused by the case manager wrongly interpreting the underwriter query and/or not understanding how contractor income works. Also, I'm assuming here that your wife's income has been keyed in as a contractor and not as a perm PAYE employee.

Underwriters know that day-rate contractors take time off and that there may be no payslip issued for weeks that they don't submit a timesheet, hence the assumption of 6 weeks without income a year.

So if they've asked for the latest 12 weeks payslips and all you can provide is payslips for 10/12 weeks, then that should be absolutely fine, they may just adjust the affordability accordingly if warranted. And if affordability isn't an issue in this case then there shouldn't be anything to worry about.

I can't speak for the outcome of your particular case as I know nothing about it, but I've done plenty of contractor cases who've had gaps (both between contracts and within contracts, say over Christmas or summer) and other than the impact on affordability, I've never had a lender decline a case for a reason like in your case, where it meets criteria.

@K_S I'm getting the feeling that the case manager may have misinterpreted the underwriter's query as we were clear with the broker that my wife is a contractor from the start. The initial information request was for x5 consecutive weeks of payslips, which we couldn't provide due to wife being off over xmas. We were then asked to provide a letter from wife's employer confirming reason for the missing payslip along with 12 weeks of payslips, which we did.  Somewhere along the process the information request has turned into x12 consecutive weeks of payslips, which we can't provide due to wife being off at least once in every 12 weeks (although still worked 46 weeks in the year). We have now uploaded 7 months' of payslips, a letter from employer confirming no work = no payslip and the employment contract.  It just seems to me this could all have been sorted out with a phone call.

@bakerman1989 I'm probably missing something obvious here as a lot of the above doesn't appear to correspond to how a contractor income would be underwritten or packaged. 

I'm curious as to what has happened here out of professional interest, so please do close the loop when you get to the bottom of this. Good luck!

@K_S it turns out my wife's payslips were the issue as they list different types of payment from the umbrella company.  The underwriter was confused, but we explained and got it sorted over the phone.  Sent for valuation today I am told, although they have raised an additional query around renewal of my wife's contract. Do Halifax have a minimum requirement?  My wife works on 3 month contracts and has done since Jan 22, with the next renewal due at the end of March.

@bakerman1989 Thanks for the update and glad to hear it's getting sorted.

Compared to other lenders, Halifax has very generous criteria wrt contractors -

either 12 months continuous service plus 6 months left on the current contract

OR

2 years continuous service in the same line of work (which doesn't have to be as a contractor).

You could be an accountant who's only ever been a perm PAYE employee and just started their first day-rate contract job, you'd meet the criteria on day 1 of your contract.

rickyroma

My son has ended up with a CCJ over an unpaid parking fine. He didn't even realise it was in place until about 3 months after. The amount owed was about £230 which has now been paid. I believe he can get a letter of satisfaction to show this?
 Lots of differing opinions how much it will affect his ability to get a mortgage anytime soon. Obviously it's not good to have the CCJ but how badly will it affect a future mortgage application? 
I imagine it will reduce the amount of potential lenders, amount he can borrow, rates etc... anything else? Or am I being overly pessimistic? 

SPRichards

Hello,

Just a quick one hopefully. I have a 2 missed payments in my credit history in 2017. I've been told anything after 60 months won't affect my my mortgage or the rate I might get. The report is completely clean and clear after 2017. But I wanted to be sure before I pushed on with this. There are a couple instances of going over my credit limit in the same year, but no one seems to mention this as an issue. Only defaults and missed payments seem to be a concern. Do I need to wait another year for these to drop off? 

Thanks for any info! 

K_S

SPRichards said:

Hello,

Just a quick one hopefully. I have a 2 missed payments in my credit history in 2017. I've been told anything after 60 months won't affect my my mortgage or the rate I might get. The report is completely clean and clear after 2017. But I wanted to be sure before I pushed on with this. There are a couple instances of going over my credit limit in the same year, but no one seems to mention this as an issue. Only defaults and missed payments seem to be a concern. Do I need to wait another year for these to drop off? 

Thanks for any info! 

@sprichards Very very generally speaking, for most mortgage applications, on its own, the impact of a couple of missed payments is likely to be zero after 2+ years so you should be absolutely fine on that front.

NannaH

My Daughter’s mortgage fix ends in 6 weeks and she’s not sure whether to stick with Nationwide and go for a 5 year fix at 4.3%  ( currently on 3.25%)  or to remortgage through a broker -  the CCJ (parking fine + house move 🙄)  that she discovered last year has now been sorted and no longer shows on her credit file.  The mortgage is 2.3x joint income.   She’d have liked to release £10k equity for a kitchen but with rates having soared this last few months it’s probably not a good idea.  
If she could get 4% ( or less) then she’d be more inclined to move lenders. 
The house should be £300-310k,  their outstanding loan is around £230k so they may or may not have 75% ltv.  

What’s the lowest available rate currently?  She plans to sort it next week when she’s off for half term. 

I mentioned a discounted tracker but she’s not very keen,  unsurprising on that size mortgage. 

LadyA2023

Hoping I can get some good advice.
I am buying a property due to complete end March.
Mortgage offer was accepted in October on the basis of repaying some debt. This has been done. Mortgage offer is a whole year so no risk of this expiry before completion.

Due to some sticky situations at Christmas I had to increase and use my overdraft on current account - which was £0 during acceptance.
Overall debt has dramatically decreased from acceptance however anxious overdraft will cause completion problems. 

My credit score has not decreased and our overall affordability I don’t believe has changed due to OH income being very high.

femster82

Situation - I have two IT contracts, one through an LTD company, and one through an Umbrella. I have had an offer on a house accepted and have been speaking to 3 brokers with the hope of securing the right mortgage deal. I take my credit very seriously and I don't want to do a full application until I am confident in the broker.

Broker #1 - Recommended by a friend who has two contracts and they seemed to help him. Came back with a deal with a high street bank but I do not know whether they spoke to the underwriters first or just submitted my details based on the information I gave. They got me an AIP for way more than the value of the house which worried me a bit. I put them on hold for now to do more research. The fee is £499. 

Broker #2 - Has not come back with any deals, but a friend had used him for over 17 deals and he always gets him a mortgage sorted. He has been taking his time and speaking to underwriters, which actually gives me more confidence than someone just applying for an AIP. He is just taking a bit longer than I would like and days are ticking by before the seller starts asking questions. The fee is £399.

Broker #3 - CMME, after reading contractor forums this was recommended and I wanted to see what they could offer. They came back with the same offer as broker #1 for a high street bank they say is favorable to two contracts. The main issue is the fee is almost £1000 on top of the bank fee of £995 and surveying still to pay for that would hit me massively short term. But they seem to be good at what they do and seem highly recommended even on this site. But the deal they came back with was almost identical to Broker #1

The third broker actually gave me a bit more confidence in broker one.

I know it's long, but does anyone have experience with multiple contract mortgages?
Is CMME worth the high fee, considering they found the exact same deal as the others?

K_S

@femster82 Applicants with multiple income streams aren't uncommon at all, and aren't necessarily more complicated simply because it's two contracts as opposed to an applicant with PAYE+selfemployed or PAYE+s/e+rental income, etc.

As far as the 'deal' is concerned, the vast majority of whole of market brokers will all have access to the same lenders and products. So if yours is a high street case, in theory they should all be recommending the same product/rate. And while there are exceptions (BoI Bespoke cases for example), with the vast majority of high-street lenders, while we can speak to our lender BDMs and get their take on a case, we don't have direct access to an underwriter prior to submitting an application. And in any case, high-street lenders will only look at a case in underwriting level of detail once it is submitted.

The point of the broker is that they should be able to place a case with reasonable confidence, package it properly and be able to anticipate most queries. There will always be an element of subjectivity when it comes to situations like yours as the underwriter will want to ascertain the plausibility and sustainability of the two income streams eg: are these two separate income streams or are they one contractor shuttling between outside-IR35 contracts (through ltd co) and inside-IR35 (through umbrella PAYE), is it plausible for both contracts to be carried out simultaneously, etc. 

In your place, I would go with whichever broker fills you with the most confidence, is good at communication and seems invested in getting you to offer quickly. Also keep in mind that delaying an application can come at a cost. I have a large loan client who's been mulling a Platform 5yr fix recommendation for a couple of days and Platform has now gone and pulled the product due to excess demand. So most likely he's now going to be paying 3-4k more over the 5 years due to the delay. Over the past week there have been other lenders who have increased rates slightly to avoid being at the top of the charts.

Are you sure you need both incomes for the required loan size? If not, then it should all be pretty smooth going.

A long winded comment but hope it helps

I hope you settle upon a broker and get a mortgage that you're happy with, good luck!

femster82 said:

Situation - I have two IT contracts, one through an LTD company, and one through an Umbrella. I have had an offer on a house accepted and have been speaking to 3 brokers with the hope of securing the right mortgage deal. I take my credit very seriously and I don't want to do a full application until I am confident in the broker.

Broker #1 - Recommended by a friend who has two contracts and they seemed to help him. Came back with a deal with a high street bank but I do not know whether they spoke to the underwriters first or just submitted my details based on the information I gave. They got me an AIP for way more than the value of the house which worried me a bit. I put them on hold for now to do more research. The fee is £499. 

Broker #2 - Has not come back with any deals, but a friend had used him for over 17 deals and he always gets him a mortgage sorted. He has been taking his time and speaking to underwriters, which actually gives me more confidence than someone just applying for an AIP. He is just taking a bit longer than I would like and days are ticking by before the seller starts asking questions. The fee is £399.

Broker #3 - CMME, after reading contractor forums this was recommended and I wanted to see what they could offer. They came back with the same offer as broker #1 for a high street bank they say is favorable to two contracts. The main issue is the fee is almost £1000 on top of the bank fee of £995 and surveying still to pay for that would hit me massively short term. But they seem to be good at what they do and seem highly recommended even on this site. But the deal they came back with was almost identical to Broker #1

The third broker actually gave me a bit more confidence in broker one.

I know it's long, but does anyone have experience with multiple contract mortgages?
Is CMME worth the high fee, considering they found the exact same deal as the others?

TigerLily3

Does anyone know, I've been told by solicitor that lender has told her funds will be released tomorrow and we will complete, so is that it now, no more checks? thank you

Rvsbf_104

Hi. In your experience, how long are straightforward Halifax applications (via broker) taking from application to offer at the moment?
Joint house move mortgage, 55%LTV, joint paye salaries of 90k, standard build mid 90s property, unsecured debt declared as being repaid on completion, strong credit scores and history for both of us. Thanks.