Mortgage: which lender doesn't have ridiculous affordability calcs?

[user1471530109]

I know I'm going to get jumped on, especially with cost of living going up.

My mortgage with HSBC is coming to the end of it's fixed term in December. The plan has always been to borrow more for an extension. I've decided against this because of the CoL crisis and tbh it's been a tough few months financially. I've had to dip into my credit card for various reasons and now have a balance of £3500. However, I've completed a loan last month so I'm hoping the money saved on those monthly repayments will clear the balance in 12-18 months. Annoyingly with interest rates threatening to rise, I feel I need to fix a new mortgage rate asap and likely before I can knock this £3500 balance back down.

I'm a single parent but with a good wage. When I have typed into the HSBC intermediary affordability calculator, it says they won't lend me what I currently owe on the mortgage by around £10k! I wanted to borrow £10k more to get 30+ old windows and front door replaced and a few other necessary improvements done on the house. the hope was to do this to combat the energy price rises. Luckily I have a fixed energy tariff until Oct 2023 so have some time. Now I'm panicking I will have to shelve these plans as well as the extension I have spent 5 years planning.

HSBC when they first lent the mortgage were very difficult right at the last moment. So I know they have strict affordability calculations.

Is there another lender with less strict calcs? I know that doing many credit checks will cause it to flag up on my credit score so I don't want to cause any other problems.

I am expecting a pay rise in the new school term. If I wait I'd have that and would have cleared some of the credit card balance. But I'm worried the interest rates will have risen again.

The joys of being a single parent. Please don't spend time making me feel shit and telling me I can't afford the mortgage etc. I've been paying one my whole adult life. But when there is one income and one off bills come at you all at once, it's difficult to absorb them with using credit. Unfortunately it's happened at a time that could have a significant impact on new mortgage repayments for the next 5 years and I don't want to mess this up.

Halifax used to take benefits and child maintenance into consideration if that helps.the

How much do you want to borrow compared to what you earn? The max across the board is 4.5 times.

Yorkshire building society (and actually HSBC) might go a bit higher but only for high earners.

FWIW im with Yorkshire and I’ve found them very easy to deal with and they have good rates

My broker told me that Santander were the least strict - that was 18 months ago.

We've stumbled across the same problem.
When we last mortgaged, I had a full time teaching job and my husband also worked full time. Nowadays and a few kids later, I work part time in retail (husband still in same job) and have a few debts. We no longer pass the affordability calculation which is ridiculous as we have never been in arrears on any of our bills.
Our mortgage broker has said our only option is to stay with the same mortgage provider (Barclays) and move to a different tarif (higher interest rate obviously). It's going to cost us an extra £110 a month.
We also wanted to borrow extra money for renovations but that's just not happening.
It's so frustrating. How anyone can afford to buy at the moment is a mystery.

@Mushroo and @RedHelenB thank you.

With my current salary and the extra £10k it would be 3.8x. So a fair way less than 4.5.
I honestly think it's the credit card balance with hcbc intermediary calculation.

Last time, they got funny regarding my pension. As a teacher, it's a fair amount out of my salary every month. I was made to feel like I had hidden this even though I had answered all their questions truthfully and they had had my pay slips and bank accounts (also a HSBC customer and had been for over 25 years at the time) for months. I vowed never to use them again but it's just been easier to stay with them as their rates had been good and I didn't want the stress of moving and going through all the checks again!

As you already have a mortgage with them you’ll probably find as you approach the end of the current fixed product they’ll provide renewal offers anyway without going back through credit / affordability checks, so I wouldn’t worry unduly about that. But, if you want to increase the amount you borrow then it is likely to be treated as a ‘new’ application.

Thanks @Tryingtokeepgoing . I did wonder if I just try and fix it at the current amount (this is what I did 2 years ago and payments stayed the same etc) and then forget the extra borrowing, get through this financial mess the country is heading in, and worry about the home improvements in a few years time. Just pissed off as £10k increase on the mortgage is negligible on repayments but the improvements I want to do would save me more money over the next 5 years.

Have we been given an inkling as to when the next interest rise may be? That's what I am trying to beat.

It sounds as though it’ll be worth speaking to an independent mortgage broker. It’s their job to match borrowers with a lender who is suitable. They should know exactly who would be willing to lend, based on your current situation.

The next Bank of England meeting on interest rates is next Thursday (4th August). I think the expectation is a further rise then, probably of 0.5%, with the potential for it to be 3% by the end of the year.

Is there anyway you can reduce your credit card debt? Even if you have a balance, showing it's reducing will be advantageous. An independent broker may be more flexible

Use london & Country

Should also have added that the market will be factoring the 0.5% into rates already, so don’t panic too much about next weeks rise as I don’t think you’d save much, if anything, if you fixed today compared to next Friday!

I think the rules about stress testing change on 1 August and become less stringent. That may help you.

I'd expect most products on the market right now will have factored in an expected rate rise next week,

L&C were great with me advising on which lenders were suitable for a single parent and which would/wouldn't take into account maintenance payments.

I sympathise though. I'm in a similar situation with my deal ending in January and having had to replace my car recently.

Oh really?
With the last rise, my new mortgage if left at the same amount of borrowing, would rise by £100 (if I've done it all correctly) which was depressing enough.

I have no other debt other than the £3500 on cc. I've paid off car.

I'm sick of thinking about money. I have a decent job and no real debts. I dread to think how those on lower incomes are coping.

Thanks for the suggestion of Santander. I've run through the intermediary calcs and they would lend a fair bit more. As would Halifax. Santander even asked about pension from payslip so I know they have all information.

Do London and country charge? I've never used a broker before.

I’ve used London and country before too. I did all my homework and decided on a deal but thought I’d check what London county could offer. They came up with the exact same deal. Easy to deal with and I wasn’t charged anything. I’d use them again.

I also recommend London and Country. It was all very easy with them and they didn’t charge.

Use a broker

broker will just sort it out for you without you needing to stress tbh

Thanks for all your help. I've filled out forms for L&C 🤞