Mortgage - Change in the circumstances

[Geekman]

I am with Halifax since Oct 2007. I haven't yet told them that I have left my permanent job and started IT Contracting since Sep 2013 (15 years of perm job before that).

I am currently on 3.99% variable and there might be a lower rate available. However my dilema is:
1> I contact Halifax and they offer me a lower rate. Job done for me
2> I contact Halifax and knowing my current circumstances (left perm jonb and only recently (4 months back) started IT contracting) they even take away 3.99% and force me to take a higher rate (due to increased financial risk).

Hence I am currently afraid of contacting Halifax.

Does anyone have advice/opinion or experience good or bad (especially with Halifax)?

Thanks!

[kingcook]

I am with Halifax since Oct 2007. I haven't yet told them that I have left my permanent job and started IT Contracting since Sep 2013 (15 years of perm job before that).

I am currently on 3.99% variable and there might be a lower rate available. However my dilema is:
1> I contact Halifax and they offer me a lower rate. Job done for me
2> I contact Halifax and knowing my current circumstances (left perm jonb and only recently (4 months back) started IT contracting) they even take away 3.99% and force me to take a higher rate (due to increased financial risk).

Hence I am currently afraid of contacting Halifax.

Does anyone have advice/opinion or experience good or bad (especially with Halifax)?

Thanks!

3.99% is the rate you both agreed to originally back in 2007. How could they change it?

As long as you're paying the monthly sum, they ain't bothered.

[Dactylion]

Does anyone have advice/opinion or experience good or bad (especially with Halifax)?

In my opinion Halifax is a horrible place.

[eek]

I am with Halifax since Oct 2007. I haven't yet told them that I have left my permanent job and started IT Contracting since Sep 2013 (15 years of perm job before that).

I am currently on 3.99% variable and there might be a lower rate available. However my dilema is:
1> I contact Halifax and they offer me a lower rate. Job done for me
2> I contact Halifax and knowing my current circumstances (left perm jonb and only recently (4 months back) started IT contracting) they even take away 3.99% and force me to take a higher rate (due to increased financial risk).

Hence I am currently afraid of contacting Halifax.

Does anyone have advice/opinion or experience good or bad (especially with Halifax)?

Thanks!

Why would you tell them. Go to a broker and see what they can offer you?

Banks just don't understand contracting as its none standard. You really do need to go via a suitable broker who will use the correct words and know the appropriate clueful person.

[Scruff]

Halifax are actually one of the few lenders who do understand contractors.

If I were you though, I would just keep schtoom and continue on the SVR @ 3.99%, since as a contractor with less than 2 year's accounts, they will probably offer you a higher rate, depending on the Loan to Value on your existing loan.

All that they wanted to see from me, when I moved from an ECM back to Ltd Co. was a copy of my CV and contract.

[jmo21]

Are you actually moving, or just hoping they'll say "yeah, no problem, we'll move you to the lower rate"

[Support Monkey]

Contractor Money or one of the other specialist companies, I have never had to show accounts when i have changed Mortgages (3 times) they sorted it all out, never been in to see anyone all done via email and phone, and still ended up with an High street mortgage via barclays\woolwich, in fact the only time I have approached a high street lender directly they told me i did not earn enough and then promptly lost all my company account documents that I had sent them

[Power Mortgages Ltd]

As it is just a simple product transfer and you are already with Halifax you can switch over to a new mortgage without giving them any additional information.

A product transfer requires no underwriting so you could be unemployed and they would still offer you the cheaper rate. It is only if you were to switch to a new lender that you would have to go through the underwriting process.

Think of it from a risk point of view, if Halifax are already lending you £x then it doesn't really matter what rate you are on to them, their risk is based upon the amount they have lent to you and in fact you stand a better chance of repaying it if the rate is lower as the repayments will be lower.

Lenders do not 'rate' interest rates like a life assurance company does if you are not 100% healthy or a car insurance company would if you have points or a couple of accidents in your driving history. You either fit the lender's criteria and they offer you a rate which is the same as everyone else at the time has access to or you do not fit their criteria and they won't offer you a mortgage.

If you are applying to borrow more money, move home or move from one lender to another then you will have to go through full underwriting where they will need you to prove affordability via either the conventional approach which is through 2-3 years of accounts or via the contractor route with income based as a multiple of your contract rate but as it is a product transfer, you do not need to prove you can afford the mortgage as you already have it so a product transfer will be available to you regardless.

Hope that helps?

[Power Mortgages Ltd]

Contractor Money or one of the other specialist companies, I have never had to show accounts when i have changed Mortgages (3 times) they sorted it all out, never been in to see anyone all done via email and phone, and still ended up with an High street mortgage via barclays\woolwich, in fact the only time I have approached a high street lender directly they told me i did not earn enough and then promptly lost all my company account documents that I had sent them

If you have accounts you should ALWAYS provide them to your broker - your broker should know this and if they simply default to asking for your CV & contract and don't ask about the accounts to at least ensure there is definitely no options available using the accounts then they are lazy brokers and probably not providing you with a service which ensures you are getting the best rate possible.

Just because one lender may not be able to assist on how they view your income from the accounts, doesn't mean all other lenders would decline an application based upon income from the accounts.

Using your CV and contract to prove your income, whilst advantageous in some circumstances (if your income genuinely isn't sufficient to support the mortgage using the accounts or you do not have 2-3 years of accounts) generally restricts your choice of which lenders can assist with most lenders needing 2-3 years of accounts to assess your income.

For example, a lender like HSBC will generally look to assess your income defined as your salary and dividends as an average over the last 3 years and will typically lend you 4 - 4.5 times whatever that figure is. If your Accountant has been very efficient with the accounts and retained a lot of profit then you could find that your salary and dividends are a lot less than what you could have taken from the net profit after tax figure.

A lender like Virgin Money however, will define your income as your share of net profit before the deduction of corporation tax plus your salary as an average over the last 2 years and can lend up to 5 times this figure. Therefore it is very common for contractors to be declined lending by one institution (like HSBC in the above example) and accepted through another due to the different lenders interpretation of your income through the accounts.

So if you have 2+ years of accounts your broker should ALWAYS be asking to see these initially even if it is simply to rule out the possibility of using them and providing certainty that you have to go down the CV and contract route otherwise they are just plainly being lazy.

[Sausage Surprise]

If you need a recommendation for a mortgage broker then go no further than Ben at Power Mortgages. He succeeded for me where all other contractor mortgage specialists failed (and he does a discount rate for CUK members).