Cancelling mortgage application to apply with new lender

Giggidy

We are using a mortgage broker to apply for a mortgage with Natwest, however their service has been poor since the application has been submitted 2 weeks ago and we have found a better rate with a Halifax. Initially we went with the broker for the purpose of finding lenders that would take 100% of my partner's basic + guanteed commisson, overtime, bonuses etc but have since found out Halifax accepts the full income and their 5 year fixed rate is about £30 less each month. Would it adversely affect us if we cancel and reapply. Natwest has already done a hard search last week, and just worried this will affect us negatively but would rather do the application ourselves as we have less faith in the broker/case manager pushing this as quickly as we could doing it directly?

K_S

@giggidy Practically speaking, there's nothing stopping you from making a new application with Halifax. Having said that, even if you do go ahead with Halifax, you may want to considering letting the NatWest application take its course given that its been 2 weeks since your full app.

I wouldn't expect the NatWest hard search to be a show-stopper, but if it is, that should show up at the soft-check DIP stage for Halifax, so there's no harm done.

Giggidy

K_S said:

@giggidy Practically speaking, there's nothing stopping you from making a new application with Halifax. Having said that, even if you do go ahead with Halifax, you may want to considering letting the NatWest application take its course given that its been 2 weeks since your full app.

I wouldn't expect the NatWest hard search to be a show-stopper, but if it is, that should show up at the soft-check DIP stage for Halifax, so there's no harm done.

Thank you, it would make sense to not cancel the Natwest one at this point, as long as applying with Halifax doesn't affect it should we be declined with Halifax for whatever reason. I assume that once a hard search has been done by Natwest they won't need to do it again?

kingstreet

I'm surprised Halifax treatment of variable earnings is same as/better than NatWest's. It isn't usually.

K_S

Giggidy said:

K_S said:

@giggidy Practically speaking, there's nothing stopping you from making a new application with Halifax. Having said that, even if you do go ahead with Halifax, you may want to considering letting the NatWest application take its course given that its been 2 weeks since your full app.

I wouldn't expect the NatWest hard search to be a show-stopper, but if it is, that should show up at the soft-check DIP stage for Halifax, so there's no harm done.

Thank you, it would make sense to not cancel the Natwest one at this point, as long as applying with Halifax doesn't affect it should we be declined with Halifax for whatever reason. I assume that once a hard search has been done by Natwest they won't need to do it again?

@giggidy Generally speaking, lenders might need to 're-score' the application if there are any relevant material changes during underwriting, in which case they may refresh the credit-check (usually a soft-footprint check only). But there shouldn't be a need for another hard check.

Giggidy

kingstreet said:

I'm surprised Halifax treatment of variable earnings is same as/better than NatWest's. It isn't usually.

I spoke to a mortgage adviser at Halifax about this and they said they do usually take 100% of guaranteed commission, bonuses etc, if it's consistent, at least in the latest 3 month's payslips anyway

Giggidy

K_S said:

@giggidy Generally speaking, lenders might need to 're-score' the application if there are any relevant material changes during underwriting, in which case they may refresh the credit-check (usually a soft-footprint check only). But there shouldn't be a need for another hard check.

The mortgage adviser at Halifax confirmed the soft search at AIP stage but said it depends how far we are into our Natwest application, which can make a difference. Which confuses me slightly, I told them we had the hard search and rate secured within 24 hours but still at the reviewing documents stage with the broker. She said that could make a difference, not sure why though as that doesn't seem to be that far into it. She also said Halifax don't guarantee the rate until the full application stage, so we could apply for this and still get a worser rate. I thought the rate applied for with the AIP would be the rate you get? On top of that, they are pulling the current rates tonight

K_S

Giggidy said:

K_S said:

@giggidy Generally speaking, lenders might need to 're-score' the application if there are any relevant material changes during underwriting, in which case they may refresh the credit-check (usually a soft-footprint check only). But there shouldn't be a need for another hard check.

The mortgage adviser at Halifax confirmed the soft search at AIP stage but said it depends how far we are into our Natwest application, which can make a difference. Which confuses me slightly, I told them we had the hard search and rate secured within 24 hours but still at the reviewing documents stage with the broker. She said that could make a difference, not sure why though as that doesn't seem to be that far into it. She also said Halifax don't guarantee the rate until the full application stage, so we could apply for this and still get a worser rate. I thought the rate applied for with the AIP would be the rate you get? On top of that, they are pulling the current rates tonight

@giggidy I might be biased here but I don't rate most single-lender mortgage advisers' knowledge levels, I'm not entirely sure what she is referring to re the stage that the NatWest is at.

She is right that with Halifax you can 'secure' a rate only when a full application is submitted, not at DIP stage. So if you need a product that will be withdrawn today (not all rates are going up afaik), the application needs to go in before 8pm today.

kingstreet

Giggidy said:

kingstreet said:

I'm surprised Halifax treatment of variable earnings is same as/better than NatWest's. It isn't usually.

I spoke to a mortgage adviser at Halifax about this and they said they do usually take 100% of guaranteed commission, bonuses etc, if it's consistent, at least in the latest 3 month's payslips anyway

I've just done an experiment. On a  basic salary of £30,000, the max loan was £134,700. If I altered that to £25,000 and £5,000 bonus, it dropped to £119,045. That is because only 60% of overtime/bonus/commission is taken into account for affordability using latest three months' payslips.

Using six months' payslips, NatWest accepts 100% in affordability. This is why they usually lend more where variable earnings are included. Proceed with Halifax with caution.

Giggidy

kingstreet said:

I've just done an experiment. On a  basic salary of £30,000, the max loan was £134,700. If I altered that to £25,000 and £5,000 bonus, it dropped to £119,045. That is because only 60% of overtime/bonus/commission is taken into account for affordability using latest three months' payslips.

Using six months' payslips, NatWest accepts 100% in affordability. This is why they usually lend more where variable earnings are included. Proceed with Halifax with caution.

You were right. Computer says no. I entered the same details of our income on Halifax's Mortgage Borrowing calculator and on the AIP application, and the differences in what we could borrow were vast. On the calculator we could borrow up to £300k but only about £190k on the AIP. Went through the figures again with a Halifax mortgage adviser and still came to the same low amount.

Fortunately, we had some movement with Natwest and the broker today, valuation booked and requested updated bank statements, so will just push on with them

kingstreet

Phew. Disaster averted.