Mortgage lender not lending and not listening!

[chillipickle]

I thought we had found a house we liked and could afford, and all was going smoothly, but today it seems we won't be able to get the mortgage. OH has been working on a temporary contract for the past year, but we only want to borrow 3 times my salary. Our mortgage broker advised that it should be fine to just apply on my salary and not worry about trying to prove OH's earnings.

The mortgage company have come back to say that because I'm the 'only earner', I must be supporting OH and the children, including paying >1K a month childcare costs, and have rejected us on affordability grounds. The broker is now saying that any mainstream lender is likely to take a similar view.

I feel as though I am beating my head against a wall. We have childcare costs because we BOTH WORK. If OH didn't work, we wouldn't pay them. But they will only take his earnings into account if he has a minimum of 2 years accounts as a contractor.

Sorry, bit of a ramble really, but I don't know what to do. Can't face the prospect of losing this house and starting all over again, or getting stuck in our rented flat for ever. Anyone been through this? Should we ignore the broker and try approaching other lenders, or are we setting ourselves up for more pain?

[minipie]

What broker are you using? I would suggest trying another broker. A good broker should be able to find the lenders who are more willing to consider contractor's earnings.

[chillipickle]

The broker is an independent, and he says he knows of one mortgage company that would accept contractor earnings with less than 2 years accounts, but the interest rate would be somewhat higher. Though I take your point, perhaps another broker would offer us more options.

Perhaps we'll have to bite the bullet and pay more by borrowing from a non-mainstream lender, but it's frustrating to be rejected on 'affordability' when the repayments would be anything but unaffordable. We're paying more at the moment in rent.

[SierraMadre]

Definitely try another broker. A different broker will have different connections and options open to him.

[KatieMortician]

It used to be the case that Santander's lending policy was 3 x single salary, plus the other person's. I think they'd be sympathetic if you went direct.

Alternatively, PM me and I'll give you the details of my lovely friend who is an independent broker.

[mspotatochip]

I know a lot of people who have had grandparents "pay" childcare costs for a while then paid them back. Its unfair to judge a 25 year mortgage on 2-4 years max of most expensive childcare outgoings. Can't you say your dh pays all household expense and you're salary is purely for the mortgage? We found we got a different answer on amount we could borrow from branch versus call centre of the same building society. Call centre much better

[drcrab]

We had same thing happen. Dh was made redundant, bank who we have had current mortgage with said all ok. Then last minute said it wasn't going to work. What they offered in the end was such a joke (really) we walked straight to Halifax and they offered us a mortgage for the amount we needed at £100 less repayments/month.

Halifax say that they agree their mortgages in house (Ie the person you see is the person who will agree or not your mortgage). The other place sent it off to 'london' where I presume a junior underwriter pressed the wrong Button and screwed up (even our mortgage manager of that same bank said so).

We got it with just my pay.

[chillipickle]

Thanks all for your responses. We are indeed looking at other brokers now, including one that specialises in contractor mortgages. Will follow up your various recommendations too.

Mspotatochip, interesting about grandparents temporarily paying the childcare! You are right though, it makes no sense for the mortgage to be rejected on it. In less than a year DS1 starts school, and then early years funding will kick in for DS2, so it only gets better from here.

We have been arguing that the childcare is paid for by OH, because it's only necessary while he's working, but part of it has to come out of my salary because I'm in a childcare voucher scheme and they just seem unable to get their heads around the whole thing.

Most annoying also that this should have happened on a Friday afternoon so we can spend the entire weekend stewing. But drcrab, I'm taking comfort from the fact that someone else has been there and come out the other side.

[billgrangersrisotto]

I can second L&C. V v good. Call them!

Good luck.

[chillipickle]

OK then, have spoken to L&C, and they are going to call me back on Monday. They were quite reassuring, said it may or may not be easy to find a mortgage (depends how the lenders view our particular circumstances, which is difficult for them to predict), but they didn't think it would be impossible by any means. So at least I can spend the rest of the weekend feeling hopeful that the whole thing isn't about to fall through. Fingers crossed!

[MOSagain]

Sounds a bit odd to me. We have just moved back to UK, DH having worked abroad for many years. We saw our dream house last week but thought we had no chance as he is not yet working and although hopefully he will have a job in the next week or so it will be contracting so they won't take him into account for a while. We therefore considering applying for the mortgage (only need a relatively small one thankfully) in my sole name. Saw mortgage advisor yesterday, explained circumstances and had no problems in getting a mortgage certificate in my name. Fingers crossed you get it sorted

[chillipickle]

Just popped back to say that the advice here was absolutely spot-on. We contacted L&C and they advised of three mortgage lenders who they thought might be able to help. One was Halifax, who they said would almost certainly do it.

We found we could get a slightly better rate by going to Halifax directly rather than through a broker, and it was just as drcrab described, we called the mortgage adviser in our local branch and she was very helpful and called back later the same day with our agreement in principle. She works Saturdays too, so we can see her in person then.

ING have now come back with an agreement in principle at slightly better rates than Halifax, though they would need evidence of OH's contract being extended again beyond the end of this year. Which we may or may not be able to get. But either way, we are reassured that Halifax will definitely do it.

In the meantime OH has been interviewed for his job to go permanent, and will hear by the end of next week, so if that materialises in time then everything may change again.

One thing which might be useful for other people in our situation - unlike a lot of lenders, Halifax do not include childcare costs in their affordability calculations. In our case, not having this large outgoing in the equation means we are able to borrow the amount we need on my salary only.

Anyway, thanks again all for your advice and support.

[Gonzo33]

That is good news. Good luck with everything from here on out.

[Lcy]

Our Halifax is with mortgage. The customer service by the in house mortgage adviser was amazing. I even got a good luck text when I moved in!