Staircasing Nightmare

Trentham

Good afternoon,

We're currently in the process of staircasing from 35% to 70% ownership and I'm unfortunately at my wit's end.

Out fixed term rate ends in August, so we approached a mortgage broker (Tembo) on 14th February. By early March they had obtained us a decision in principal with Skipton. Since then we have:

- Had a RICS valuation carried out on 11th March
- Provided all documentation requested by Skipton
- Had a 2nd valuation carried out by Connell's at Skipton's request
- Instructed Clarion (the housing association) of our intent to staircase and obtained a memo of staircasing
- Hired a solicitor
- Returned the signed mortgage deed to Skipton's

Skipton (via Tembo) have now informed us that they will not count Carer's allowance as income, and they will not consider Universal Credit income as they believe that the deductions are too high and that we are entitled to a 'negative amount'. The latter point makes no sense as both the Universal Credit statements and out bank statements show the amount that we are being paid. I'm furious that it took Skipton nearly 6 weeks to raise this issue as the first Universal Credit statement that we sent them was in the first week of March and they were fully aware that part of our income was from UC and Carer's allowance.

As such they have now withdrawn their mortgage offer. Devastated is not the word, but if anyone has any clarity on to what Skipton are referring to regarding the 'deductions' being too high then please can you share. I have attached one of our statements as an example (with personal information removed).

Thank you. 

Petriix

It's obviously quite complicated. Part of the UC award is 'housing' which covers the rental part of the shared ownership. If you staircase to 70% then your rent will presumably fall below the current housing award so your entitlement will go down. The UC statement is confusing and the deduction of £1549.92 does look high. I imagine the underwriters at Skipton see it as unreliable income. 

Really this is a broker issue. They should know which lenders will accept UC and Carer's Allowance and which might have issues. They should be getting this stuff lined up before getting you to apply. You might have to find a different lender. 

Trentham

Petriix said:

It's obviously quite complicated. Part of the UC award is 'housing' which covers the rental part of the shared ownership. If you staircase to 70% then your rent will presumably fall below the current housing award so your entitlement will go down. The UC statement is confusing and the deduction of £1549.92 does look high. I imagine the underwriters at Skipton see it as unreliable income. 

Really this is a broker issue. They should know which lenders will accept UC and Carer's Allowance and which might have issues. They should be getting this stuff lined up before getting you to apply. You might have to find a different lender. 

Thank you. That was the explanation that I needed with the statement regarding the rent.

I’ve got a call with Tembo tomorrow to discuss my options. We have an outstanding bank loan of £3800 (£250 monthly repayments) that we just about have the savings to pay off, while still having enough left to pay the remaining Staircasing costs. We’re happy to do this if it will make a significant difference with our affordability, but I’d rather have a solid answer before using our savings.

Christologymum_2

Also I believe that transitional protection is to cover you from moving from tax credits or whatever it was to UC and it’s only in place for 12 months so you aren’t financially worse off moving to UC, they could be looking at that and thinking that will go after 12 months 

Christologymum_2

Although reading it again it does say that it will continue until a change in circumstances, I work with DWP and thought that was just for 12 months. So poss ignore my previous post.