Mortgage application confusion

Shawty88

We’re hoping to move and applied for a mortgage via a mortgage broker. Sent all supporting documents and were told we’d hear back this week.

We did, today and we’re told via the broker that they could offer £3k less than we applied for, but would like x2 further pay slips from my bank work and it may increase the amount they offer. This will delay the process by 2 weeks, when we have a deadline to meet and exchange contracts in 3 weeks.

Its a little frustrating really, I genuinely don’t understand why, in the grand scheme of things, a bank isn’t willing to lend an extra £3k to meet our application amount but will happily lend over £200k?

Guess I’m just venting. Find the whole thing massively frustrating and I’ll now need to wait a further 10/11 days until my weekly payslips that are coming up are issued.

Fingers crossed it doesn’t all fall through if the deadline isn’t met.

MorningcoffeeIV

Shawty88 said:

I genuinely don’t understand why, in the grand scheme of things, a bank isn’t willing to lend an extra £3k to meet our application amount but will happily lend over £200k?

Lending regulation is a lot stricter than it used to be.  The FCA doesn't look well on lenders who just chuck a few extra grand on top of what they've assessed the borrower can afford.

housebuyer143

Shawty88 said:

We’re hoping to move and applied for a mortgage via a mortgage broker. Sent all supporting documents and were told we’d hear back this week.

We did, today and we’re told via the broker that they could offer £3k less than we applied for, but would like x2 further pay slips from my bank work and it may increase the amount they offer. This will delay the process by 2 weeks, when we have a deadline to meet and exchange contracts in 3 weeks.

Its a little frustrating really, I genuinely don’t understand why, in the grand scheme of things, a bank isn’t willing to lend an extra £3k to meet our application amount but will happily lend over £200k?

Guess I’m just venting. Find the whole thing massively frustrating and I’ll now need to wait a further 10/11 days until my weekly payslips that are coming up are issued.

Fingers crossed it doesn’t all fall through if the deadline isn’t met.

If you want a bank to lend you £200k you should be expecting to jump through some hoops. They have a set amount they will lend based on your income and they can't just increase that.. If you have additional income they will look at it again, which seems to be the case. 
It's not the banks fault you have a ridiculously short deadline. Many mortgage offers take more than a few weeks to be offered. 

ACG

Where is the cut off point? If they lend £203k, but you needed an extra £3k you are then at £206k...
There has to be a cut off point somewhere. 

Unless you have gone to a little building society or a specialist lender, the maximum loan should have been known from the outset as they use ONS figures. With the smaller lenders its a little more open to interpretation as they go through bank statements. 

Could you extend the term? That might help affordability. 

Shawty88

It’s a ‘green’ mortgage so unsure if that makes any difference.

we had a mortgage in principle of £300,000 (I know it’s not guaranteed), and the mortgage broker has dealt with it all for us. I guess they might want to see weekly bank shift pay slips to ensure consistency. It’s frustrating, feel like I’ve jumped through many hoops over the last 2 weeks already. We could still afford it in the worst case, I was just hoping to have some money from the equity to cover solicitors fees without dipping into savings. 

I know they have to have a cut off somewhere, but common sense says in the grand scheme of things it’s not a huge amount, essentially it’s paying a mortgage for an extra 3 months.

housebuyer143

Shawty88 said:

It’s a ‘green’ mortgage so unsure if that makes any difference.

we had a mortgage in principle of £300,000 (I know it’s not guaranteed), and the mortgage broker has dealt with it all for us. I guess they might want to see weekly bank shift pay slips to ensure consistency. It’s frustrating, feel like I’ve jumped through many hoops over the last 2 weeks already. We could still afford it in the worst case, I was just hoping to have some money from the equity to cover solicitors fees without dipping into savings. 

I know they have to have a cut off somewhere, but common sense says in the grand scheme of things it’s not a huge amount, essentially it’s paying a mortgage for an extra 3 months.

It's not a common sense thing, it's an FCA regulation thing that they have to stress affordability etc and then someone high up has looked at it and set the max affordability and then commitments etc are deducted from affordability from there.

If you don't want to wait, then dip into your savings. If you don't want to then you need to wait.

ACG

The lender is probably also stress testing the mortgage at a rate higher than you will be paying. So its not an extra £15 a month, its probably more like an extra £50 a month.

I do get the frustration, I have had the same arguments with lenders many times over. Some far more frustrating than this... I have a big hole in my wall where I bang my head because that makes more sense (not really but there should be a hole). 

JMA74

You had a mortgage in principle for £300k but they will only give you £200k?  

Given its a 'Green' mortgage I am assuming its a high street lender, the agreement in principles with most high street lenders are accurate 99% of the time....if the right income is keyed to the system

With a £100k difference I can only guess that your income was calculated incorrectly by the broker.  But obviously i dont know all the details but its not normal to have a difference of £100k between DIP and App

Shawty88

JMA74 said:

You had a mortgage in principle for £300k but they will only give you £200k?  

Given its a 'Green' mortgage I am assuming its a high street lender, the agreement in principles with most high street lenders are accurate 99% of the time....if the right income is keyed to the system

With a £100k difference I can only guess that your income was calculated incorrectly by the broker.  But obviously i dont know all the details but its not normal to have a difference of £100k between DIP and App

I think this has added to the frustration! I thought it’d be a lot smoother. The DIP was £300,000.. the house we want to buy is less than that. Asked to put down about £15% deposit (ish) with £230k loan. Apparently the ‘worst case scenario’ is being offered 3 grand less than we applied for, but this may go up once they get the next 2 weekly pay slips until the end of this tax year and it could go up. 

I’ve been on the bank for 2 years this week (so just short of when we applied) so not sure whether this might have caused the hold up - they wanted 2 solid years of extra earnings 🤷🏼‍♀️
Just confusing when all the details/circumstances we gave for the DIP haven’t changed. But, I guess that’s mortgages.