Or is the Halifax?(23 Posts)
I've just been knocked back for a loan by the Halifax. The reason? Because I'm on maternity leave. They told me affordability would be no problem ordinarily but not when I'm on maternity. The money my husband pays into my account every week cannot be taken into consideration, they say. I was only asking for 5k which I would have no bother paying back. In August I'm allowed to release equity from the house to the tune of 90k with...the Halifax! But now they won't loan 5k because Im on maternity. AIBU in thinking this is massively unfair? Any suggestions anyone?
PS If I release equity now I get charged a hugely higher interest percentage and because I'm careful with finances I know it would be unwise to do so until August when the mortgage term ends.
I don't know what the legal position is, but I would guess that their experience shows that a good % of women don't go back to earning the same after ML as they did before and therefore that lending to a woman on ML, based on her pre-ML salary is a poor risk. Theirs is a risk business and they have been criticised/burned badly in the past for lending more than people can afford to repay. Can't win, can they?
It does sound frustrating but I think YABa little U. Lenders have tightened up and rightly so in the last few years and lots of peoples circumstances change hugely during maternity leave, they may end up not going back to work after thinking they will etc.
Can you not apply for a joint loan with your husband I suspect that would work?
I have a relative who owns unencumbered properties with enough savings to live off but couldn't get a store card recently to save 10% off a large purchase because they have no regular income- seems like madness but rules are rules unfortunately.
Can't your husband get the loan?
Not because it's a man's job, but because he will have the right "look at my current salary" paperwork.
Where does the OP state she needs it urgently Laquitar?
Yes, it does seem unfair on the face of it but, as KentishPud says, this is the result of the past problems.
I suppose the mortgage would be a different proposition as, presumably, your DH is also named on it (bringing his income into account) & being secured on your property makes it altogether a safer lend as they can always repossess, should the worst happen.
I know it's a pain in the arse but is it an option to get the £5k loan in your DH's name for the time being?
Banks are not Charity - they have to be realistic.
They can only look at things in terms of concrete income. You are on maternity leave with a low income. Yes your DH is paying money into your account, but what if he decides next month not to? Halifax have no guarantee.
They dont want to be left with a 5K debt which you cannot afford to pay back as it stands.
Any reason you specifically need to do it and not your husband?
Loans are based on your financial position at the time of application, not increases in earnings that will possibly/probably come in the future so yes it is frustrating but its entirely normal. I believe some people have had success in reversing mortgage refusals based on discrimination (mortgage cos are not allowed to discriminate based solely on maternity leave) but it will take time and is not guaranteed to work anyway.
Equity release is different as you already own a property that will serve as collateral.
It might not be a sensible decision for them, but it might be. They have no idea if your DH is going to stop paying you or not, or whether you'll decide not to go back to work when your leave is up. And you aren't earning, so it's not unfair. They don't owe you a loan, and they can use whatever criteria they like to decide who is eligible for a loan.
I can see it from both sides, I understand that it seems odd that the bank won't lend you £5k when you could pay it back in one go in August & still have £85k left over
But I had every intention of going back to work after maternity leave except they moved my job to a different city & I couldn't get to it so I had no choice but to leave. I didn't qualify for redundancy as my job was still available (strangely enough my company & Halifax were both owned by the same company). 5 years later I'm still a sahm.
Plus you know you could repay it in August but as far as the bank are concerned you could have your eye on a £90k Ferrari so the August money is already spent ifswim
Lenders are clamping down. My husband earns a packet but we had to jump through hoops to remortgage with a slight increase because he is self employed-90 yrs established business with continual growth in a secure field. But he was still considered high risk!?! Don't take it personally.
I think it's just a bank making a decision on the basis that you aren't earning your full salary at the moment. You may decide not to go back to work or you may decide not to. Why can't you take out a joint loan with your DH. that would be the sensible thing to do.
Waroftheroses, are you married to Highlander?
I can't see how you could be self-employed in a business established 90 years ago otherwise. When you are self-employed you work as yourself (e.g. a plumber) or you work through your own limited company that you established yourself.
I presume that he works in a business that was established more than ninety years ago. If he's not employed by that business, including being a director of the business, then I can understand the lender's position.
FinancePrincess - can you not be self-employed as owner of a company established by your grandfather or great-grandfather & passed down through the family?
I'm not contradicting you, just interested. Would that still count as self-employed?
No, Santa, you'd be employed by that company, although for all practical purposes and most financial ones (like getting a mortgage) you'd feel self-employed.
He is in a partnership in a 90 yr old business. All partners are registered individually for personal self assessment and responsible for their own tax returns and payment of taxes and regarded as self employed. The partnership is an entity in its own right and files its own tax return. Thus he is self employed....
I'd imagine you'd qualify for a joint loan application or in your husbands name only. I don't believe that's discriminatory, as all the Halifax care about is the numbers on paper and risk assessments.
You don't have any 'right' to a loan. You apply, they decide if you are a valid risk or not.
Also released equity isn't money you've come into it's money you borrow / more debt. They won't be impressed with that either and you may not even qualify for that remortgage if you reduce hours or decide to stay at home.
I hate to be a pedant, but if you are a partner in a partnership you aren't truly self employed. That's because each partner in a partnership - which is an entity with its own independent existence - is a fee earner, and the total income is pooled then split according to the partnership agreement.
The term 'self employed' is often used as shorthand for 'not in a standard contract of employment where PAYE and NICs are deducted at source', so I can see where you are coming from, but a truly self-employed person is exclusively dependent on his or her own labour, irrespective of the mechanism by which it is delivered.
The Halifax presumably looked at the partnership accounts and decided that the revenue stream wasn't steady enough for their liking, so to all intents and purposes it had the same effect as being self-employed from the bank's point of view.
The bank is not being unreasonable. They have a business to run and have to weigh up the risks of giving you a loan. Can your husband get the loan in his name?
Get an interest free credit card that does superbalance transfers usually the easiest way
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