Mortgage [Relating To Self Employment Grant] - HELP

Ashleigh_Bennett

** I'm looking for help & advice **

In December 2020 myself and partner called our bank (NatWest) to ask what money they'd lend us if we decided to sell our property and buy a new one. They advised us they'd lend us £365,000 and should we decide to sell our property we'd be able to 1) keep our current mortgage rates due to having nearly 1 year left on this current mortgage, or 2) we'd be able to buy out of this mortgage and get a new one at lower interest rate for the new home. We spent around 1 1/2 hours on the phone with the bank going through jobs/ income / finances - literally everything and they gave us the go ahead advising if we sold our home we'd have no issues sorting the mortgage out and also, emailed us a letter reconfirming the amounts we'd be able to borrow etc. 

This month we've listed our home, sold it and put an offer in on a new property which has been accepted. We called the bank on Tuesday (19th Jan 2021) to inform them that we've sold our home and once the mortgage outstanding has been repaid we'd be left with £95K to put down on the new home as a deposit and we'd like to borrow £125K from the bank as the property we've bought is much lower than what they offered us.

After reconfirming all the details, the lady then asked if my partner had taken advantage of any of the self employment grants due to him being self employed (which this was never asked when we spoken to them in December but she knew he was self employed as they asked what he does for a job etc). My partner confirmed advising he's taken advantage of the first grant which I think was paid to him in May 2020 and then the second grant which was paid to him in August 2020 but hasn't needed to apply for the others due to work picking up and his income is back to how it was prior to lockdown. She then turned around and said because he's taken the self employment grants they couldn't count his salary towards the mortgage due to him needing support from the government baring in mind he only had 5 weeks off (due to the Government closing down the sites) but has worked throughout from then and can prove he's had weekly income. Nothing of this was mentioned in December and they gave us the go ahead to sell our home as there would be no issues. 

My question is does anyone know if all banks are rejecting mortgage applications if self employed people have accepted the grants or are we likely to still get a mortgage? I can't get the mortgage just based on my salary as i'd need an extra £20K deposit for them to lend me the money based on just my income. We feel betrayed as we checked everything within the bank before putting our home on the market and now we feel like they've back tracked what they originally advised us. When I questioned the lady we dealt with on Tuesday she just said 'oh sorry you've been misinformed' - which doesn't help me at all.

Any help or advice will be appreciated.

Thanks
Ashleigh

[Deleted User]

Not all banks are taking a hard-line approach.  Natwest are probably the harshest mainstream lender for self employed clients at the moment 

Ashleigh_Bennett

Deleted_User said:

Not all banks are taking a hard-line approach.  Natwest are probably the harshest mainstream lender for self employed clients at the moment 

Thank you, this gives me hope that someone else won't be so harsh. After having sleepless nights over it I was starting to worry we'd need to withdraw if all banks were taking this approach.

Thank you, we'll take a look to see what other banks will be happy to help

MovingForwards

Ashleigh_Bennett said:

Deleted_User said:

Not all banks are taking a hard-line approach.  Natwest are probably the harshest mainstream lender for self employed clients at the moment 

Thank you, this gives me hope that someone else won't be so harsh. After having sleepless nights over it I was starting to worry we'd need to withdraw if all banks were taking this approach.

Thank you, we'll take a look to see what other banks will be happy to help

Save yourself a lot of time and headaches by using a good broker.

K_S

Ashleigh_Bennett said:

** I'm looking for help & advice **
In December 2020 myself and partner called our bank (NatWest) to ask what money they'd lend us if we decided to sell our property and buy a new one. They advised us they'd lend us £365,000 and should we decide to sell our property we'd be able to 1) keep our current mortgage rates due to having nearly 1 year left on this current mortgage, or 2) we'd be able to buy out of this mortgage and get a new one at lower interest rate for the new home. We spent around 1 1/2 hours on the phone with the bank going through jobs/ income / finances - literally everything and they gave us the go ahead advising if we sold our home we'd have no issues sorting the mortgage out and also, emailed us a letter reconfirming the amounts we'd be able to borrow etc. 
This month we've listed our home, sold it and put an offer in on a new property which has been accepted. We called the bank on Tuesday (19th Jan 2021) to inform them that we've sold our home and once the mortgage outstanding has been repaid we'd be left with £95K to put down on the new home as a deposit and we'd like to borrow £125K from the bank as the property we've bought is much lower than what they offered us.
After reconfirming all the details, the lady then asked if my partner had taken advantage of any of the self employment grants due to him being self employed (which this was never asked when we spoken to them in December but she knew he was self employed as they asked what he does for a job etc). My partner confirmed advising he's taken advantage of the first grant which I think was paid to him in May 2020 and then the second grant which was paid to him in August 2020 but hasn't needed to apply for the others due to work picking up and his income is back to how it was prior to lockdown. She then turned around and said because he's taken the self employment grants they couldn't count his salary towards the mortgage due to him needing support from the government baring in mind he only had 5 weeks off (due to the Government closing down the sites) but has worked throughout from then and can prove he's had weekly income. Nothing of this was mentioned in December and they gave us the go ahead to sell our home as there would be no issues. 
My question is does anyone know if all banks are rejecting mortgage applications if self employed people have accepted the grants or are we likely to still get a mortgage? I can't get the mortgage just based on my salary as i'd need an extra £20K deposit for them to lend me the money based on just my income. We feel betrayed as we checked everything within the bank before putting our home on the market and now we feel like they've back tracked what they originally advised us. When I questioned the lady we dealt with on Tuesday she just said 'oh sorry you've been misinformed' - which doesn't help me at all.
Any help or advice will be appreciated.
Thanks
Ashleigh

@ashleigh_bennett Yes, if you had the advice call with Natwest in December, they did indeed give you wrong information. They informed brokers that from 24/11/2020, income from a business that has applied for or received a SEISS grant on or after 14 July 2020 would not be considered. Tbh, if the 90 minute(!) call with Natwest was a formal advice call, they can't just say "oh sorry, you've been misinformed". That's just poor.

Not all banks have such a blanket approach to SEISS grants. I recently advised a client who'd taken out the third SEISS grant at the end of last year (even though he did not need it and in fact the business was doing much better than the prior year) and when I talked to lenders there were a few mainstream lenders who were willing to treat it on merit to make an assessment of whether there was any significant negative impact from Covid on the business.

It's impossible to say whether you will get a mortgage or not (as that depends on the specifics), but I can say that if your business hasn't been materially impacted by Covid and you can evidence that, there should be options out there. I would recommend getting in touch with a broker to do the legwork and find the most appropriate lender. Good luck!

Ashleigh_Bennett

K_S said:

Ashleigh_Bennett said:

** I'm looking for help & advice **
In December 2020 myself and partner called our bank (NatWest) to ask what money they'd lend us if we decided to sell our property and buy a new one. They advised us they'd lend us £365,000 and should we decide to sell our property we'd be able to 1) keep our current mortgage rates due to having nearly 1 year left on this current mortgage, or 2) we'd be able to buy out of this mortgage and get a new one at lower interest rate for the new home. We spent around 1 1/2 hours on the phone with the bank going through jobs/ income / finances - literally everything and they gave us the go ahead advising if we sold our home we'd have no issues sorting the mortgage out and also, emailed us a letter reconfirming the amounts we'd be able to borrow etc. 
This month we've listed our home, sold it and put an offer in on a new property which has been accepted. We called the bank on Tuesday (19th Jan 2021) to inform them that we've sold our home and once the mortgage outstanding has been repaid we'd be left with £95K to put down on the new home as a deposit and we'd like to borrow £125K from the bank as the property we've bought is much lower than what they offered us.
After reconfirming all the details, the lady then asked if my partner had taken advantage of any of the self employment grants due to him being self employed (which this was never asked when we spoken to them in December but she knew he was self employed as they asked what he does for a job etc). My partner confirmed advising he's taken advantage of the first grant which I think was paid to him in May 2020 and then the second grant which was paid to him in August 2020 but hasn't needed to apply for the others due to work picking up and his income is back to how it was prior to lockdown. She then turned around and said because he's taken the self employment grants they couldn't count his salary towards the mortgage due to him needing support from the government baring in mind he only had 5 weeks off (due to the Government closing down the sites) but has worked throughout from then and can prove he's had weekly income. Nothing of this was mentioned in December and they gave us the go ahead to sell our home as there would be no issues. 
My question is does anyone know if all banks are rejecting mortgage applications if self employed people have accepted the grants or are we likely to still get a mortgage? I can't get the mortgage just based on my salary as i'd need an extra £20K deposit for them to lend me the money based on just my income. We feel betrayed as we checked everything within the bank before putting our home on the market and now we feel like they've back tracked what they originally advised us. When I questioned the lady we dealt with on Tuesday she just said 'oh sorry you've been misinformed' - which doesn't help me at all.
Any help or advice will be appreciated.
Thanks
Ashleigh

@ashleigh_bennett Yes, if you had the advice call with Natwest in December, they did indeed give you wrong information. They informed brokers that from 24/11/2020, income from a business that has applied for or received a SEISS grant on or after 14 July 2020 would not be considered. Tbh, if the 90 minute(!) call with Natwest was a formal advice call, they can't just say "oh sorry, you've been misinformed". That's just poor.

Not all banks have such a blanket approach to SEISS grants. I recently advised a client who'd taken out the third SEISS grant at the end of last year (even though he did not need it and in fact the business was doing much better than the prior year) and when I talked to lenders there were a few mainstream lenders who were willing to treat it on merit to make an assessment of whether there was any significant negative impact from Covid on the business.

It's impossible to say whether you will get a mortgage or not (as that depends on the specifics), but I can say that if your business hasn't been materially impacted by Covid and you can evidence that, there should be options out there. I would recommend getting in touch with a broker to do the legwork and find the most appropriate lender. Good luck!

Thank you, we spoke to the bank on the 29th December and she never said anything. The lady we dealt with on Tuesday didn't even apologise just said 'sorry you've been misinformed and didn't really care', that's what we are most upset with. 

As he's a sole trader (as he's a bricklayer), we've got statements to prove that the company he's contracted with have been paying him weekly due to him working and from August onwards the site had returned back to normal so his earnings were back to how they were prior to this pandemic.

Thank you, we'll most take a look into a mortgage broker option and save us the hassle of ringing round different banks.

Thank you for your advice

[Deleted User]

If hes a brickie on CIS contracting then some lenders will assess him as employed which is anothet avenue worth exploring 

YasminAJ

I got an offer with accord within 2 weeks. Took Seiss 1 and 2 and it wasn’t a problem as long as I could show my business was operating again and profits had increased. 

SurreySelfEmployed

this is really promising. Natwest have told me they can't take my income into account as I took the first two grants, despite since then trading has picked back up to normal levels so I didn't take the third grant and I have paid invoices as proof.  We, like you are in a fixed term with a £20k penalty to leave early. I asked if they could release me from this penalty so I can go to another lender who would consider my salary and they told me no one would. So off to chat to my broker to see what she can do, hadn't spoken to her as thought our only option was to port so when that was shut down we'd given up hope of moving!

K_S

@SurreySelfEmployed Out of interest, have NatWest actually said that they'll waive a £20k ERC for this reason?

SurreySelfEmployed

K_S said:

@SurreySelfEmployed Out of interest, have NatWest actually said that they'll waive a £20k ERC for this reason?

No, they havent't. on friday they said the policy is being reviewed and we should have news in a few weeks...