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Can I get a mortgage

mortgage deals, ideas and discussion
air04
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Can I get a mortgage

#34588

Postby air04 » February 26th, 2017, 12:23 pm

I am planning to buy a house soon(first house). We have cash to buy it, but it is all in good(hope so..) investments I do not want to sell out of; compared to the 2%ish interest on mortgage.

My wife is part-timing, and doing high salary sacrifice for pensions. I was told that as it is voluntary, it will not matter for mortgage. So, she will get around 4x of her gross(ish) for mortgage.

I do not have a job(for many years now), and am not self-employed. I have "income" from bank interest(mainly foreign), dividends, capital gains etc from investments. I have filed returns for many years now, and they show my income. I have other income from ISA and Capital gains which is not shown in my SA302. My dividend + interest income has been more than 20K for the last two years, and 15K in the year before that. I have been told that I can not get any amount of mortgage in my name or based on my income. I also have more than twice the amount(of mortgage I want) of assets in ISA/shares etc.

Is there some way I can get some mortgage based on my assets/income. I am not planning to borrow more than 75-80%. I would not mind paying a premium as I am be classed as more "risky".

I would really be grateful if anyone can give my some direction or suggestions about it. I tried L&C around an year ago. I am also a barclays premier customer(probably due to the amount of cash that moves through my account), and they too could not offer any mortgage for me.

Thanks in advance
ap

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Re: Can I get a mortgage

#34624

Postby DiamondEcho » February 26th, 2017, 2:59 pm

Why not lay out the numbers/proposition in a concise format? As I'm a bit surprised L+C can't help. Perhaps there is something 'obvious' that isn't revealed in your original post?

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Re: Can I get a mortgage

#34674

Postby Clitheroekid » February 26th, 2017, 8:25 pm

You're probably wasting your time with any High Street lender or a mainstream mortgage broker, as investment income isn't really something they know how to assess properly so they just refuse to consider it.

The most likely source of a loan for someone in your position is a private bank as these are far more flexible in their lending criteria.

Your chances of success depend to some extent on how much you're looking to borrow. Ironically, the higher the loan the easier it can be, because of the fee payable to the broker (such loans are nearly always arranged through brokers) which is typically 1% of the loan.

A client of mine who wanted a large loan (£1m+) but didn't fulfil the normal lending criteria used this firm a couple of years ago and got what he was looking for at a good rate, but other than that I have no experience of them and this certainly doesn't amount to a recommendation - https://www.ennessprivate.co.uk/

There will be other, similar firms of brokers but as I said earlier you're best targeting ones that deal mainly with private banks.

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Re: Can I get a mortgage

#35093

Postby blazeboy » February 28th, 2017, 12:35 pm

Lenders will not accept overseas interest as income. Your situation is untenable for any lender including a bank such as Handelsbank or similar.

air04
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Re: Can I get a mortgage

#35109

Postby air04 » February 28th, 2017, 1:09 pm

Dear all.. Thanks for your replies.

DiamondEcho wrote:Why not lay out the numbers/proposition in a concise format? As I'm a bit surprised L+C can't help. Perhaps there is something 'obvious' that isn't revealed in your original post?

DC,
Sorry my post was not clear. Basically I wanted to know of any of investment income(bank interest or capital gains or dividend) can be considered for mortgage loan. Or if any assets in SIPP or ISA or share trading account can be considered.

We are looking into a £450K property, my wife can get around £140K(as per L&C) based on her income. We have more than 450K in [ISA+trading account+VCT] and around £500K in foreign bank fixed interest. Plus there is some more in SIPP. We are 42 years old. Due to a health condition, I am nearly home bound(my condition is not considered a disability), and not in receipt of any benefits. Due to my personal circumstances, our yearly expenses(excluding rent) is less than 11K.

All foreign income is on my tax returns. VCT/ISA income is not, as there seems to be no place to show it.

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Re: Can I get a mortgage

#35157

Postby Lootman » February 28th, 2017, 3:15 pm

blazeboy wrote:Lenders will not accept overseas interest as income. Your situation is untenable for any lender including a bank such as Handelsbank or similar.

I've certainly been offered a UK mortgage based purely on foreign income. That was in the 1990's so if that is no longer possible it is only because lending practices have changed.

As ClitheroeKid suggests, the best approach is via specialist mortgage brokers. My two sons wanted to borrow 6 and 7 times income respectively. The High Street banks didn't want to know but, in both cases, a broker got them what they wanted via other lenders with more flexible standards.

air04
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Re: Can I get a mortgage

#35181

Postby air04 » February 28th, 2017, 4:31 pm

Lootman wrote:The High Street banks didn't want to know but, in both cases, a broker got them what they wanted via other lenders with more flexible standards.

Lootman,
Thanks for that. If you have any names of brokers/lenders, that could be helpful

ap

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Re: Can I get a mortgage

#35187

Postby Lootman » February 28th, 2017, 4:41 pm

air04 wrote:
Lootman wrote:The High Street banks didn't want to know but, in both cases, a broker got them what they wanted via other lenders with more flexible standards.

Lootman, Thanks for that. If you have any names of brokers/lenders, that could be helpful

I don't have contact details but in both cases they used somebody local and small. Every town of any size will have a few mortgage brokers, who aren't shy about advertising. I personally have always believed that, when seeking a non-conventional route, it's good to proceed on a personal and local basis, even though the lenders they connect you to will be national.

So go and visit a few local brokers and chat to them. You'll get a good sense of their abilities, their ethics and the condition of their office can tell you a lot as well. And they will give you an idea of the kind of loan they can get you, the fees involved, and whether those fees can be subsumed into the loan amount. (Obviously they get paid one way or the other).

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Re: Can I get a mortgage

#35224

Postby Clitheroekid » February 28th, 2017, 6:57 pm

Lootman wrote:So go and visit a few local brokers and chat to them.

I'm generally a supporter of using local businesses, but this is an exception. The large majority of everyday mortgage brokers only work with mainstream lenders, none of whom would be interested in this deal.

That's why I recommended going to a specialist broker that has links with private banks (which ordinary brokers generally don't). It will almost certainly be a private bank that will give you the loan you're looking for.

air04
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Re: Can I get a mortgage

#35229

Postby air04 » February 28th, 2017, 7:25 pm

Thanks Clitheroekid. All the help from people on this board is appreciated.

Due to a health condition, I can not go to a high street. It will all be by post/phone/internet. I have contacted one of the specialist brokers, fingers crossed.

Good luck to all,
ap

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Re: Can I get a mortgage

#37116

Postby melonfool » March 8th, 2017, 9:43 am

" I am nearly home bound(my condition is not considered a disability), and not in receipt of any benefits."

If your condition genuinely means you are home-bound I can see no reason it would not be considered a disability - the definition is:

"You’re disabled under the Equality Act 2010 if you have a physical or mental impairment that has a ‘substantial’ and ‘long-term’ negative effect on your ability to do normal daily activities." (for the Equality Act, which covers employment and services)

I would say 'leaving the house' was a normal daily activity for most people.

It might be worth looking into benefits again, obviously you could only receive non means-tested ones but some are.

https://www.gov.uk/pip/what-youll-get

The reason I mention it is that having an income might help with the mortgage application.

Also:

"All foreign income is on my tax returns. VCT/ISA income is not, as there seems to be no place to show it."

I don't believe you have to show any ISA income (it's not income really, it's just you drawing from your own money) as those are tax-free accounts. But VCTs I don't know about - it might be worth asking on the tax board here - some things for the tax return need additional pages.

Looking at this, it actually seems you might be missing out on offsetting against other tax to reduce your tax bill, rather than have tax to pay:

https://www.gov.uk/government/uploads/s ... t_v0.2.pdf

(hmm, that is a PDF, why do they do that? The link probably won't work, here is the Google I did that turned it up, second result: https://www.google.co.uk/webhp?sourceid ... x+return&* )

I have just been through a complex mortgage application myself. My employment/self-employment history is varied and although the mortgage is less than my savings and investments they still took no account of that. Nor of my gross annual salary - only of my monthly net. I also pay a large sal sac pension which I could have stopped short term and restarted later, but it would need to be for 3m to have the 3 payslips they ask for.

Good luck with it!

Mel

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Re: Can I get a mortgage

#37168

Postby dealtn » March 8th, 2017, 11:50 am

I have a similar profile. I have a "six-figure" investment income, but no "earned" income. My wife works full time and has an income, albeit <£20k p.a. I can concur, following a recent attempt to remortgage (coming out of a fixed rate period, admittedly on a buy-to-let property), you are unlikely to get any joy from what would be considered mainstream High Street lenders. Your wife's income is fine, but don't expect any of your investment income to be considered. You don't tick enough, or at least the right boxes, and High Street banking nowadays is a commoditised offering (management and regulation insist, whether we think that is correct and wise is another discussion).

Specialist lenders, and access to them via specialist brokers is a route to consider. I would if possible get some recommendation, and think about what fees you are comfortable incurring (and when - its galling to pay a fee and yet be unsatisfied in terms of finding a suitable product) in choosing your broker.

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Re: Can I get a mortgage

#37269

Postby DiamondEcho » March 8th, 2017, 3:51 pm

^Agreed, the poster is a non-standard proposition so the high street likely can't offer much and a 'specialist' lender is perhaps needed. Last time I went to one c10 years ago, they were the likes of John Charcol, FPD Savils and London & Country. IME they offer many more options for non-standard clients' situations.

In the OPs shoes I'd check the above is still a decent spread of provider options, get all my figures together with my proposition, then check out their websites to see how they can help.

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Re: Can I get a mortgage

#39150

Postby blazeboy » March 16th, 2017, 5:15 pm

I have to repeat that on the basis of what the original enquiry was there are no lenders here that will accept foreign investments as an aide to getting a mortgage.

air04
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Re: Can I get a mortgage

#39304

Postby air04 » March 17th, 2017, 2:54 pm

Dear all,

I really appreciate the comments on this post. Here is an update.

1. L&C told me they can not ignore the salary sacrifice of my wife, though we have other income on SA302 and SalSc is entirely voluntary. Strangely, a different L&C contact person said that could be done(but that was 2 years ago, may be rules have changed)
2. First direct were happy to give me mortgage 4.75 times wife's salary ignoring SalSac, they needed proof of other investments and SA302s. I got a AIP with them.
3. Nationwide : When I first called them, one person said no to "ignoring salsac". Called again as I read in below quote. I spoke to a person, who transferred me to a specialist. She clearly said she could consider SalSac and some dividend etc income. I did not go further then. I will probably contact them again.
https://www.theguardian.com/money/2015/ ... tributions
I cannot explain why, according to a survey by Money Marketing late last year, some lenders – such as Barclays, HSBC, Coventry building society – do take contributions into account and some, such as those in the Lloyds Banking Group (which includes Halifax), Royal Bank of Scotland and NatWest, don’t.

Nationwide building society takes a different approach and assumes a certain pension contribution level for all mortgage applicants so that customers saving into a pension are not disadvantaged. And some lenders take a view on pension contributions depending on how they are paid for. For example, pension contributions deducted from salary – and so already taken account of in the net pay figure on a payslip – can be ignored whereas those that are paid for out of a current account are treated as monthly expenditure and so are included in an affordability check.

4. John Charcoal: They are happy to ignore SalSac as long as affordability can be shown in any way. But he said that the list of mortgage providers are limited.
5. Went through a broker to Natwest. He said that he discussed my situation with a manager in Natwest and has assured me that SalSac can be ignored and average of last two years' UK dividends can be considered. All 4.8 times loan can be given. No AIP at this point as that could leave a print on our credit history.
6. Another broker(who charges 1%) said he could take all my income into account and give me as much as I need. He needs a lot of documentation. I am waiting for the offer to be accepted before doing the hard work.

Cheers,
ap

air04
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Re: Can I get a mortgage

#39305

Postby air04 » March 17th, 2017, 2:58 pm

blazeboy wrote:I have to repeat that on the basis of what the original enquiry was there are no lenders here that will accept foreign investments as an aide to getting a mortgage.

From what I know from brokers I have talked, it is true in my case as it is a "small" mortgage. If I had a foreign income of £2mil( and assets of say £15mil), and needed a £6mil mortgage, that would not be an issue. That will be private banks like coutts etc.

air04
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Re: Can I get a mortgage

#39313

Postby air04 » March 17th, 2017, 3:28 pm

melonfool wrote:"

It might be worth looking into benefits again, obviously you could only receive non means-tested ones but some are.
https://www.gov.uk/pip/what-youll-get
The reason I mention it is that having an income might help with the mortgage application.

Also:
"All foreign income is on my tax returns. VCT/ISA income is not, as there seems to be no place to show it."

I don't believe you have to show any ISA income (it's not income really, it's just you drawing from your own money) as those are tax-free accounts. But VCTs I don't know about - it might be worth asking on the tax board here - some things for the tax return need additional pages.

Looking at this, it actually seems you might be missing out on offsetting against other tax to reduce your tax bill, rather than have tax to pay:

https://www.gov.uk/government/uploads/s ... t_v0.2.pdf

(hmm, that is a PDF, why do they do that? The link probably won't work, here is the Google I did that turned it up, second result: https://www.google.co.uk/webhp?sourceid ... x+return&* )

Good luck with it!

Mel


Mel,
I appreciate your long reply.

About taking benefits, from what I hear in news etc... it is tough and I need to go through a lot of bureaucracy. I will need to take tests, and outwardly I am healthy. My condition is that I am extremely sensitive to WiFi/CordlessPhones/Mobiles etc(called Electrosensitivity). Some doctors understand it, but UK medical system does not recognise it. Being exposed to high levels can cause me symptoms from flu-like to panic attack and pulse/bp sudden fall leading to loss of conciousness. I can tolerate some level, I can go to local tesco for an hour or two max.

About VCT, I was not clear perhaps. I invested in VCTs and got tax rebates. The income from VCTs(dividends) and income from ISAs(dividend and interest)can not be shown on the tax returns, they are tax free. So it does not go into SA302s. Most lenders use SA302 only for affordability. It seems from my experience that the lenders do not even want to see/consider tax free income for affordability

Cheers,
ap

air04
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Re: Can I get a mortgage

#39316

Postby air04 » March 17th, 2017, 3:32 pm

melonfool wrote:"

It might be worth looking into benefits again, obviously you could only receive non means-tested ones but some are.
https://www.gov.uk/pip/what-youll-get
The reason I mention it is that having an income might help with the mortgage application.

Also:
"All foreign income is on my tax returns. VCT/ISA income is not, as there seems to be no place to show it."

I don't believe you have to show any ISA income (it's not income really, it's just you drawing from your own money) as those are tax-free accounts. But VCTs I don't know about - it might be worth asking on the tax board here - some things for the tax return need additional pages.

Looking at this, it actually seems you might be missing out on offsetting against other tax to reduce your tax bill, rather than have tax to pay:

l


Mel,
I appreciate your long reply.

About taking benefits, from what I hear in news etc... it is tough and I need to go through a lot of bureaucracy. I will need to take tests, and outwardly I am healthy. My condition is that I am extremely sensitive to WiFi/CordlessPhones/Mobiles etc(called Electrosensitivity). Some doctors understand it, but UK medical system does not recognise it. Being exposed to high levels can cause me symptoms from flu-like to panic attack and pulse/bp sudden fall leading to loss of conciousness. I can tolerate some level, I can go to local tesco for an hour or two max.

About VCT, I was not clear perhaps. I invested in VCTs and got tax rebates. The income from VCTs(dividends) and income from ISAs(dividend and interest)can not be shown on the tax returns, they are tax free. So it does not go into SA302s. Most lenders use SA302 only for affordability. It seems from my experience that the lenders do not even want to see/consider tax free income for affordability

Cheers,
ap


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