new mortgage affordability checks, how bad are they?

[Meglet]

I'm hoping to move my mortgage to a new house but I need to go through the mortgage affordability process tomorrow. It will be another 5yr fixed rate so interest rate rises won't affect me for some time.

Has anyone else done it yet? I understand they'll need to know all my incomings and outgoings (ie; council tax right down to contact lenses) and stress test whether I can take a rise in interest rates? In 10yrs I've never missed a mortgage payment, overpaid for some of them, not missed credit card payments, never overdrawn, only changed my job once... so that's all good and in my favour I hope. But I'm a LP and a low earner so I'm terrified actually going into total panic this evening they'll reject the application .

Bad nights sleep worrying about this....and what was the lead story on radio 4 news when I got up. Mortgage affordability checks. I might puke.

Bumping this for you. Hope all goes well.

We have just done it well dh has. Asks outgoings across various things shopping bills etc. We asked which for advice so had already done it for them.

I am a mortgage consultant. Your case sounds alright depending how much you want to borrow. To be honest there has not been a huge amount of change from the lenders apart from the increased paperwork for us consultants!

Thanks all.

financialwizard I actually only need to move it across to the new house, mum is giving me the rest (yes, I am very lucky). It's the possibility of being told I don't have enough spare for a big interest rate rise that worries me.

iseenyou we've found a nice little house nearby, downstairs loo (hallelujah!), doesn't need anything doing to it so it's pretty much perfect. Been looking for a year and already let
one house go because the survey was grim.

The chap they interviewed on the TV said that it can take a week or two for them to decide whether the application is ok. I'm not going to like this wait am I .

We had to go through this 2 years ago with HSBC. Had to go into a branch and have our expenditure analysed by a teenager

I have to say I found him slightly patronising, telling me I should take out insurance for every single possibility when I already have some of it via my employer. If I insured for everything I wouldn't have money left to pay my mortgage.

So I'm not sure how much of a change it would be to be honest. If interest rates went up by loads I think we would be okay - but they tend to go up gradually unless we have another black Wednesday....

We applied for our mortgage two months ago. It probably wasn't in so much detail as they need now, but they wanted to know what our average monthly outgoings were (we'd done this as we wanted to make sure we could afford the extra mortgage and add something in for higher bills with a bigger house and mortgage rates ourselves). We knew how much we would have left over with no lifestyle changes and how much extra we could generate if we could reasonable cut backs.

Surely all they need is 6/12 months supply of bank statements showing what you have left over at the end of every month and they can then calculate if you could afford an increase. It was clearly pointed out to us how much a 1%, 3% and 5% increase would be.

I have just heard on Radio 5 that a mortgage applicant prepared a spreadsheet for the meeting. This showed how their income was spent, the slack in it to accommodate mortgage rate rises, and income projections. It showed how they could reduce spending on other things if needed. It allows you to prove to the lender that you can cope financially. If you truly cannot afford the loan you want, it is not sensible to have it. If you can afford it, you will be able to prove this. All your other factors look good so just do the homework and you will be ok. Good luck.

I think we can safely say that was a 'computer says no' conversation with my mortgage company !

Despite paying without fail for 10yrs, no debts, loans, never touching an overdraft, and over paying my mortgage for some of that time, they were unwilling to let me port it to a new home. I don't even want to borrow any more money. They didn't ask for my precise outgoings though, they just looked at what I earnt and the underwriters came back as 'no'. They did ask me if I smoked (never) but no questions on gym membership, eating out etc.

Appparently I can appeal, but it sounds very unlikely so we're not wasting time on it. Mum is getting her financial advisor to process the mortgage he found for me last week so we just need to fiddle about getting that set up.

And with that I'm going to have a cup of tea .

Bastards! When we remortaged last year (borrowing an extra wodge of cash) we had to tell them all our outgoings, write them a letter to explain why our childcare costs are so low (DH works from home mostly and we have obliging family/ad hoc childcare), tell them what we would cut back on if interest rates rose, and give them copies of our bank statements. They also wanted to see the plans for our extension and our planning permission documents. We did it through L&C and they found us someone, when our then mortgage company wouldn't give us the amount we needed to do our extension. I think some 'normal' mortgage companies are a bit box ticky.

at bastards.

There was an awful lot of eye rolling from my mum while we had the bank on speakerphone.

I can understand the reasons behind box ticking, they have to start somewhere. They're obviously willing to take risks on unknown customers more than current reliable customers. A low paid single parent doesn't seem like an obvious home owner, but after 10yrs without defaulting common sense would show them I'm a pretty safe bet. Hey ho....

We did ours through L&C six months ago and it sounds exactly the same as the new version. I wonder if they are just very thorough as a company or were maybe piloting the new stuff?

TBH it was a pita and took hours, but we just thought it was them being picky and we got through no problem.

Sorry, pressed too soon - I hope it all works out for you OP.

You may find it easier if you try applying again at the end of the quarter (ie June). DH used to do mortgages and there was always a bit more leeway for human beings overriding ' computer says no' situations then, as staff had their eye on their quarterly targets and commission.