To think this is unfair and discriminatory?

(51 Posts)
Catsize Thu 11-Apr-13 11:23:57

We have a house. Mortgage has come to the end of its five year special rate and we are now on something much more expensive, so we want to switch.

Circumstances...

Civil partnership for six years. Have had a mortgage for 13yrs, partner has had one for 28yrs. Never missed a payment. Both have good jobs. I have been self-employed for 11yrs and have all relevant accounts, figures etc. partner went self-employed as a freelance journalist to look after our son after I took seven months off to have him etc. She is earning money.

We are fortunate to have 60% equity in the house.

Problem....

Because I had a baby and don't get maternity leave etc, my income dipped. It is rising again. It has been fairy constant for the past years, but dropped to half of usual on year end 2012. As soon as I went back, income was back to usual level.
Have tried to remortgage, but am getting turned down again and again as they will only look at most recent year end, as this was a drop in income.

They will not consider my partner's income at all because she does not have three years' accounts (would have been better with her continuing employment and putting child in nursery!). Naturally though, they take into account her car loan, credit cards etc.! I am deemed to have two dependents, even though that is not the reality.

Spent an hour on the phone to HSBC yesterday (who allegedly averaged last three years, in which case we still qualified just about) to be told I could be lent less than twice my income. Marvellous. No real reason given, but can only assume it is for the same reasons as the other companies -drop in income due to maternity leave so the computer says 'no'!

We appear to have hit a brick wall.

Just wondering if anyone else has experience of this? Any helpful mortgage companies out there?!

Have written to MP and government but would help to have experience of others.

Sorry this is rather long!

lisaro Thu 11-Apr-13 18:05:36

Unfortunate - but certainly not discriminatory. I wish people would stop using it as an excuse when it isn't so, otherwise genuine cases of discrimination will start to be ignored. Is it discriminatory to not give a mortgage to someone who has too little income to pay it? The lenders are being careful - about bloody time.

trinity0097 Thu 11-Apr-13 18:06:52

In your situation I would use a broker as they know which ones to avoid totally for hour situation and which would be more helpful!

Catsize Thu 11-Apr-13 18:36:44

Can demonstrate all sorts of things. Don't have a choice about being self-employed as I work as a barrister, and nerly all barristers are self-employed (and no, we don't all earn £500k a year before I get those jibes! smile ), so in terms of ability to demonstrate future earnings etc., this is very easy. Suppose I had a choice in that I could have chosen a different career? Bit of a big ask maybe...
As someone pointed out today, going back much sooner would have made breastfeeding almost impossible. As I cannot nip out of court for breaks etc., could only express at lunchtime (if I wasn't having to work over lunch) and at the end of the working day (in all sorts of odd places, usually in full regalia!). I was rubbish at expressing to begin with and only managed it efficiently after a few months.
Aooreciate your help folks, and the civilised nature of this thread. flowers

Catsize Thu 11-Apr-13 18:38:20

lisaro, we more than meet the income requirements, hence sense of unfairness.

lisaro Thu 11-Apr-13 19:01:16

Sorry Catsize for not being clear, I meant that as an example, not directly at your circumstances.

Catsize Thu 11-Apr-13 19:50:30

Oh, thanks for clarifying. I agree it isn't discriminatory to refuse a mortgage to someone who cannot pay it. Think that just makes sense, whereas our scenario doesn't. Grrrrr. Banks. Grrrr. smile

Catsize Thu 11-Apr-13 20:02:58

Just looked at the Equality Act 2010. Would def be discrimination if treated less favourably due to being a)pregnant or b) within 26wks of giving birth. However, this scenario is a grey area perhaps as whilst I am being treated unfavourably by virtue of my pregnancy and its 26wk aftermath, I am not within the 26wk period at the moment (child now 15mths). An interesting point...

Catsize Thu 11-Apr-13 20:05:21

Should clarify - was only off work for 13 or 14 weeks afterwards but doubt that matters.

Floggingmolly Thu 11-Apr-13 20:26:36

We're still in a recession; of course your most recent earning potential is what they'll be most interested in hmm
It would only qualify as discrimination if they have applied a different policy to someone else - have they?

Catsize Thu 11-Apr-13 21:06:53

Hi floggingmolly. Haven't been treated differently in the sense that they would treat all self-employed women who had a period off work to have a baby in the same way. That is the bad thing. However, I have been treated differently by virtue of pregnancy etc. than I would have been but for the pregnancy. If I had not had a baby, I would have had no problem at all.
I can demonstrate that this drop in income is totally explicable and that the last eleven years are fine and that the next thirty years are likely to be, as I cannot be made redundant etc. and there is no prospect of my job disappearing. As long as I don't do something very naughty indeed! grin
Pregnancy affecting income is different to lower income due to illness, fluctuating business etc for reasons set out above.
And if it went belly up, they'd have a recently-built house with 60% equity to sell.

I totally understand where you are coming from here.

We are looking to refinance a mortgage as well - not borrow anymore money at all. We are on SVR at (I think) about 5.5%. We could get a rate of about 3% - but our income doesn't support it. We can afford (just) what we are paying now, and this will make it more affordable, but because it doesn't fit the calculators we can't remortgage!

I totally get it, I used to work in mortgages, but that doesn't make it any less frustrating. Wish we could still self-cert!

NiceTabard Thu 11-Apr-13 21:16:58

we applied for a remortgage when I was on mat leave and they told me they wouldn't take my usual salary into account as they couldn't guarantee that I would go back to work after mat leave.

I was pretty pissed off TBH as they were saying that, what, an adult woman doesn't know her own mind? Men might go part time or take a sabbatical or anything but they don't go questioning them whether they are intending to carry on working or not.

So I kind of get where you're coming from. my only suggestion is to shop around.

IThinkOfHappyWhenIThinkOfYou Thu 11-Apr-13 21:19:17

I would see a financial advisor. Can you still self cert? Mine is self cert but I've had it 12 years. I'm scared to move in case I lose it, my rate is to die for.

Nancy66 Thu 11-Apr-13 21:24:19

A lot of lenders won't let you self certificate any more - they have been too badly stung. they now want to see SA302 forms from the Inland Revenue detailing the breakdown of your earnings for each tax year.

badguider Thu 11-Apr-13 21:27:55

I get where you're coming from. I am s-e and taking six months off this year. I have got my accountant to write MATERNITY LEAVE in huge letters all across this year's accounts so that it's very clear that I there was a personal rather than business reason for the lower bottom line. This applies for when I have to show my accounts when I tender for jobs etc.
I also have a client who insists on paying me PAYE even though I only do 59 hours a year for them (it's a university, i teach one module). So I always have to preface my accounts with a letter from my accountant about my entire income.

There must be a way of finding out which mortgage lenders are most self-employment friendly... Try the self-employed/freelance board on here and maybe also google for 'mortgages for the self-employed' some broker is bound to be specialising as there are a lot of us in a similar position.

Pilgit Thu 11-Apr-13 21:28:25

go to a mortgage broker - they can have these conversations with the banks and know how to pitch it. It isn't discrimination really but it is bloody unfair as they won't look at the full picture - this is where a good mortgage broker earns their money (they also get better deals)

badguider Thu 11-Apr-13 21:32:28

maybe give this lot a call (number at the bottom): www.whichmortgageadvisers.co.uk/help/self-employed/

Goodwordguide Thu 11-Apr-13 21:42:09

Definitely go via a broker - DH and I were both self-employed, were returning from abroad and I had just returned from maternity leave and we managed to get a mortgage (with Halifax). I think we had about a 40% cash deposit, which helped, and we used a broker via St James Place. Brokers have relationships with the mortgage companies and can argue your case.

This was pre-financial crisis however, and the market has of course tightened since then.

herethereandeverywhere Thu 11-Apr-13 21:43:30

When FirstDirect (owned by HSBC) refused to recognise my income because I was on maternity leave which is discriminatory, we ended up with RBS private bank through a broker (and screwed out of £5k by First Direct Grrrr still bitter). The broker cost us but did the business for getting just the mortgage we needed!

Blending Thu 11-Apr-13 22:01:19

Our fixed rate tracker came to an end whilst I was on the unpaid element of ML, so we were unable to switch to a new lender, as I found like yourself it prove that my salary dip was temporary.

Our existing lender allowed us to switch to a better mortgage, with minimal fuss, no drama. It turned out it was less than our previous rate and close to one of the better rates availible at the time (2 years ago)

We will be in exactly the same position when this one ends as I am pregnant again. I hope they can do something simular this time.

Have you looked at what your existing provider can do for you? Especially with a proven track record of payments and a decent amount of equity in the property they should be able to offer something better than the standard rate.

Catsize Thu 11-Apr-13 22:34:17

Thank you everyone for your suggestions. We tried our current lender first of all and they weren't interested . 'Lower rates are for new customers. Yes, we prefer to treat our new customers more favourably than our loyal ones' etc.
After no joy with lots of people, my partner rang them again today. She had found a letter in which they promised to beat the repayments after the promotional period ended. Result is that they will lower payments. Not massively, but they would be lower. For a £999 fee of course. Eh? What is there to rearrange?? Especially on a remortgage. Still, we are gratefulish, especially as they haven't yet gone into accounts etc.
Re:self-cert, not sure this works any longer. I have 14yrs of accounts. Partner doesn't, so it would be relevant for her.
What the above posts show is that this is sadly a common problem. Although I am not applying to remortgage in the middle of maternity leave, the effect and the reasoning is the same.
Oooh nicetabard, I would have been grumpy too.
We are going for as long a fixed rate period as poss to avoid this possibly happening again, should we brave be blessed with a second child. hmm
We were trying to avoid using mortgage broker, but think it may be the way forward. Have done so many times in the past. Simply that getting to appointments is more of a faff nowadays! smile Oh, and we thought our financial circumstances would make an application quite straightforward. grin

Catsize Thu 11-Apr-13 22:36:47

herethereandeverywhere, they screwed you out of £5k?? Do tell! Major grrrrrrrrrrrr!

x2boys Sat 13-Apr-13 09:24:42

Sorry if i,m not understanding is your partner working freelance? and is your mortgage in both your names? if so should nt they look at your combined income?

badguider Sat 13-Apr-13 09:58:50

They don't look at freelance income until you have at least three tears of accounts (all un-marred by maternity leave).
Op's accounts include the year she took mat leave and her partner doesn't have three years yet.

badguider Sat 13-Apr-13 09:59:23

Years not tears blush

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