max loan term = contract length?

[northernladuk]

I put down my income (company income) not my salary.

Your company income?? You mean what the client pays you? or company income i.e. total amount you make from company, divs and salary?

[formant]

And remember getting a mortgage (and a loan for that matter) is based on a whole range of factors not just employment length. If you have good credit, large deposit, low LTV then yes you can, if you don't have those things then no you won't. No one factor means you can get a mortgage.

Well in the case of the OP, as a lender I'd be more skeptical about his income and the fact that he already has a 10k loan with the same bank which he (despite his (rather high) income) hasn't managed to pay off. That smells like not so great finance management to me.

Mortgage or loan - looking at just the income (assuming what the OP said about no gaps in employment/contracts is true), that shouldn't be alarming. I agree - they do look at more than just that of course. I must say I'm a bit confused that they asked about the length of the contract in the first place. I've never seen that sort of question pop up on any such application (I mean most lenders (particularly if you're an existing customer) only ask about your current income and outgoings to determine affordability). Chances are he was flagged up as risky for other reasons, which prompted them to dig further to find a reason to politely decline his loan application.

Mind you, mortgage lending is a bit random anyway. When I got my first mortgage (under two years ago) I had mediocre credit, only 7 months in my (then) job, rubbish LTV (Halifax 90% mortgage plus vendor gifted deposit) and was still approved. Will be in much better financial and LTV position when remortgaging in a few months, and somehow I doubt it'll be as smooth. Loans on the other hand are predominantly about credit score/existing credit and affordability. Last loan my other half applied for (as an existing customer of his bank) they didn't even bother with a credit check (he just fiddled with the affordability figures until the online application was approved automatically). Hence my point about banks lending on riskier grounds than (what we know about) the OP's circumstances.

..and 6 months into a permie does not mean you are unstable as 6 months in to your very first contract at all. One carries a much greater risk than the other.

Until you're eligible to take your case to a tribunal you can be dismissed without notice and there's f-all you can do about it. Any company can falsely claim gross misconduct if there'll never be a court case where they'd have to defend it. Sure, in theory it's meant to be more stable in permiedom, but in reality it's not until you've served your two years (formerly one). Now, of course being let go 'at random' is more likely to happen in a contract position (after all you're officially part of the temporary workforce), but you basically aren't protected from that sort of thing in permiedom either.

[northernladuk]

[QUOTE=formant;1710251]<good stuff snip> [QUOTE]

Fair points well made.

[formant]

Fair points well made.

Cheers.
So yeah, there'll be more to the story as to why they don't want to give him that loan...it won't be about (just) about the contract length.

[psychocandy]

Getting a loan is a complete pile of tulipe at the moment. Especially as a contractor.

I can't get one at the moment for £12K for some reason. I even tried putting down income as £42K for me and £42K for wife (which it is) and checked my credit record with experian (top banana) and I still get turned down for it. Its all black magic!

Best one was Barclays. Went to see premier manager woman who nearly fell off her chair when I gave her income details - lined me up for premier account etc the full monty. Then I asked for this loan. She blagged it for a few weeks then it was 'computer says no'. OK then thanks but I wont be opening the current account either then.

Completely nuts. £12K which is about 2.5 times what I take out of company and goes into personal account (by way of salary, my div, wife div) on average per month.

[psychocandy]

There is absolutely no need to do that if:
1. You have a good credit record, and,
2. You have credit cards, bank accounts and/or a mortgage with other financial institutions.

Generally if you apply on a paper form and have a good credit record and have other financial products using a bit of common sense you can get the loan you want.

(And yes I'm fed up of various financial institutions trying to give me loans and credit cards I don't want even though they fully know what my situation is just because I have another product with them.)

Be careful of too much available credit. I got bitten with that one.

Added up all my credit cards limit and it almost £100K. None of it used. Apparently, this can cause an issue.

[psychocandy]

Sod the bank, sod buying, just lease something. They don't care if you are ltd co, self employed or whatever. Stop paying and they do a repo on the car anyway.

You can get much more car for the money - as long as you don't mind having to keep paying out and not "owning", which if you are borrowing, you don't own it anyway.

Anything from a Fiesta 1.6TDCi Econetic for around £150/month up to an Audi RS5 for about £1500 a month. (Figures are indicative and not a valid quotation - DYOR). FWIW I got a Nissan Juke 1.6 Accenta Premium, with maintenance for £224/month inc VAT on a 2 year deal. All I have to pay in this time frame is fuel and insurance. Beats the last few cars I've had with blown turbos (£1300), busted valves requiring a head rebuild (£1800), warped discs (£400) etc.

Im thinking of that route now. Can't get loan need new motor. Lease company recommendations?

[SandyD]

I believe the last few years the banks had to abide with so many new regulations - having to be fair to the customer as the FSA puts it, means making 1000% that the customer can afford to pay back etc, obviously the legal and compliance gone overboard, but it all to stop / recover from the credit crunch... I think!

[northernladuk]

Your company income?? You mean what the client pays you? or company income i.e. total amount you make from company, divs and salary?

Sandy?

Sandyyyyyyyyyyy.....

[northernladuk]