Remortgaging and underwriter logic?

WandererWoman · 17 April 2019 at 10:57PM

I’m trying to remortgage to a fixed deal with a new lender, Santander. I bought the house before I was married and husband has never been on the mortgage application or deeds.
All was well, affordability not an issue, looking at 59% LTV. Single application so husband’s income not a factor.
According to Santander’s estimation, if I pay mortgage and all household bills myself (I don’t), i’ve £350 to spare at the end of the month.

Santander asked for usual info on outgoings but childcare costs have been flagged up by underwriter. We have one child. I contribute £160 pm to childcare though, combined, we both contribute £460 pm.

Underwriters wanted to know how i’d cover £300 shortfall if hubby left and refused to pay childcare. I explained I’ve £350 spare each month.
Not satisfied, underwriters stated that if interest rates rose to 9% then I wouldn’t have spare cash so what would I do if rates rose and no hubby?
I suggested I could use our £26k of savings.
Underwriters again weren’t satisfied as, generally, savings aren’t secure and can be spent so they wanted to know what i’d do if I had no savings, high interest & no hubby?
I said I can rely on family to fill childcare gaps, he’s the only grandchild on both sides.
Underwriters still not satisfied, asked what I would do if I had no family, no savings, high interest and no hubby

Is there a point where the catastrophising of the underwriters just becomes ridiculous??

I’ve had to go back and explain to Santander and the underwriters that I’m seeking to fix my interest for 2 years - hence no rates changes for 2 years. At that point my son will be school age and childcare costs will be zero.

Should I suggest paying all childcare costs upfront, with savings? Seems extreme.
Can anyone advise me on how to rationalise with these automatons?

AnotherJoe · 18 April 2019 at 6:27AM

Yes there is a point and Santander's underwriter reached this when they stress tested against 9% ! I would (a) complain officially that 9% is an outrageous stress test and (b) look elsewhere.

TrickyDicky101 · 18 April 2019 at 7:17AM

I wonder if you would face the same difficulties if you made a joint application with your husband (ie a transfer of equity)? Perhaps one of the brokers could comment.

csgohan4 · 18 April 2019 at 7:38AM

Seems the stress test FCA recommendation was +3% above the rate you get when your introductory discount finishes, so technically if your SVR is say 6% potentially, you could reach 9%

https://www.fca.org.uk/firms/interest-rate-stress-test

ACG · 18 April 2019 at 9:54AM

I am surprised you have got to that level of debate. It usually either passes or does not, if not the loan amount would be reduced.

Thrugelmir · 18 April 2019 at 5:14PM

WandererWoman wrote: »

I bought the house before I was married and husband has never been on the mortgage application or deeds.

Why not add him to the mortgage? Unsurprisingly the underwriters are concerned given they have no visibility of him.

[Deleted User] · 18 April 2019 at 8:28PM

They have to take your word that your husband earns something.

As Thrugelmir says, sole married is normally a concern. Although there are genuine reasons for it being a sole married case - including legal fees/religious beliefs etc., another possibility is that the husband has bad credit/doesn't have a job and can't contribute as you have declared he can. Some lenders just won't consider sole-married at all (appears harsh, but understandable IMO).

Ultimately it's hard to 'prove' one way or the other. Is there evidence of the £460 coming out of your bank account, or just the £160? If the £160 is consistently coming out month on month, you can send a few more months bank statements worth as proof.

Unfortunately it's so easy to manipulate and people say what underwriters want to hear, although I admit this does sound extreme - something has obviously spooked them.

Have you thought about a fix with your current lender? It may not be the absolute best rate, but you may be able to skip a load of the underwriting given that they already know you.

How much was affordability passing by? If it was very tight on their model (which admittedly is stressed), then I can understand their concern.

robatwork · 19 April 2019 at 11:36AM

First Direct won't give you such a hard time as a "sole married"

Remortgaging and underwriter logic?

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