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  • FIRST POST
    • katekavs
    • By katekavs 6th Feb 18, 11:15 AM
    • 5Posts
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    katekavs
    income doubled, mortgage offer reduced. What?
    • #1
    • 6th Feb 18, 11:15 AM
    income doubled, mortgage offer reduced. What? 6th Feb 18 at 11:15 AM
    Hello,

    I had a bit of a shock yesterday as I got an AIP done with Halifax and it was far less than I was expecting. Halifax currently hold a mortgage on my current property, which they offered me in 2012 for 25k. Since then my income has almost doubled (I'm self employed), yet the offer they gave me yesterday (which is for selling the current property, paying off the remaining 5k and buying a new property) was only 17k. Nothing else in my circumstances has changed, so I wonder if this sounds normal?

    I did include my partner on the new AIP, who is a student with a part-time job and around 6k additional annual income. I expected this to increase our borrowing potential, but perhaps he's bringing the offer down? I don't know why this would be, however, as he has a credit card which he makes regular payments to and no other debts.

    (As an aside, what impact do student loans have? Our earnings are below the threshold to start making repayments)

    Thank for any and all thoughts on this! I will try and get another AIP done in just my name and see if that makes a difference. Online mortgage calculaters are suggesting I might be able to borrow 35-40k

    Cheers,
    Kate
Page 1
    • kingstreet
    • By kingstreet 6th Feb 18, 11:26 AM
    • 33,173 Posts
    • 17,908 Thanks
    kingstreet
    • #2
    • 6th Feb 18, 11:26 AM
    • #2
    • 6th Feb 18, 11:26 AM
    If you are self-employed, Halifax will take an average of your latest two years' net profits, or director salary and dividends.

    It will not lend based on latest year's income unless it is lower than before.

    No student loan payments = no impact.

    Did you enter the current mortgage as a commitment and note it "to be repaid at or before completion?"
    I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.
    • katekavs
    • By katekavs 6th Feb 18, 11:38 AM
    • 5 Posts
    • 0 Thanks
    katekavs
    • #3
    • 6th Feb 18, 11:38 AM
    • #3
    • 6th Feb 18, 11:38 AM
    If you are self-employed, Halifax will take an average of your latest two years' net profits, or director salary and dividends.
    Originally posted by kingstreet
    That's what I thought, that average is about 9k (this is profit, rather than total income, which I think is the correct figure to use?)

    Did you enter the current mortgage as a commitment and note it "to be repaid at or before completion?"
    I was doing this over the phone, but when I expessed my surprise at the amount the agent checked this specifically and said he had entered it correctly.


    Maybe I was just really lucky in 2012 and have been deluding myself that I should be able to get more this time round? Or maybe my partner has some shady credit past that I don't know about?!
    • ACG
    • By ACG 6th Feb 18, 11:49 AM
    • 16,691 Posts
    • 8,675 Thanks
    ACG
    • #4
    • 6th Feb 18, 11:49 AM
    • #4
    • 6th Feb 18, 11:49 AM
    It is not just as simple as your title makes out.

    The affordability rules for all lenders has changed over the years.
    Added to that, your current mortgage is solely in your name based on your circumstances back then and now there are 2 of you based on your circumstances now.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • katekavs
    • By katekavs 6th Feb 18, 12:22 PM
    • 5 Posts
    • 0 Thanks
    katekavs
    • #5
    • 6th Feb 18, 12:22 PM
    • #5
    • 6th Feb 18, 12:22 PM
    Yes, I was trying to give the title a catchy hook based on my underlying confusion !!!128521;

    I can't see any way in which my circumstances are worse now than they were then, and several in which they're better. That's why I'm so puzzled.

    Maybe I should wait and see what an AIP in just my name comes out as...
    • Mortgage_Adviser
    • By Mortgage_Adviser 6th Feb 18, 4:42 PM
    • 112 Posts
    • 43 Thanks
    Mortgage_Adviser
    • #6
    • 6th Feb 18, 4:42 PM
    • #6
    • 6th Feb 18, 4:42 PM
    I believe Lloyds banking group lenders of which the Halifax is a member of have recently changed their maximum loan to income calcualtions at least I know Scottish Widows did.

    So where before they would lend 4.75x you annual income if you earn less than 25k now they will only lend 4.49.
    • katekavs
    • By katekavs 6th Feb 18, 5:37 PM
    • 5 Posts
    • 0 Thanks
    katekavs
    • #7
    • 6th Feb 18, 5:37 PM
    • #7
    • 6th Feb 18, 5:37 PM
    So where before they would lend 4.75x you annual income if you earn less than 25k now they will only lend 4.49.
    Originally posted by Mortgage_Adviser
    Thanks, that's good to know. Doesn't explain why they didn't even offer 1.5x our combined annual income though
    • katekavs
    • By katekavs 7th Feb 18, 8:25 AM
    • 5 Posts
    • 0 Thanks
    katekavs
    • #8
    • 7th Feb 18, 8:25 AM
    • #8
    • 7th Feb 18, 8:25 AM
    EXTRA INFO: I have just checked our Experian credit scores, and mine is 999 and my partner's is 973... (both 'Excellent')
    • Annie35
    • By Annie35 7th Feb 18, 9:12 AM
    • 214 Posts
    • 184 Thanks
    Annie35
    • #9
    • 7th Feb 18, 9:12 AM
    • #9
    • 7th Feb 18, 9:12 AM
    Might be worth trying a broker? It could even be something like Halifax not liking SE or low borrowing amounts, or both even maybe.
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