Question
Mortgage hell - advise please!?
We are first time buyers with no desposit. We are buying a house on a 23% equity incentive scheme (our dream home). We have a financial advisor on the case but despite us having a good wage we are having trouble getting this mortgage, due to the way our salary is structured. We work for Computer Sciences Corp and they pay a portion of our salary into what is known as a "Flex fund". Out of this flex fund we pay our pensions, and then we can opt for other benefits, such as life insurance, child care vouchers, etc. or we can take it as cash. At the moment, we pay the pensions and have a couple of benefits rather than the cash. Halifax are saying that as we do not take the fund in cash we cannot count this as salary and thus it reduces how much we can borrow. We have had two letters sent from work to state that we earn what we say we earn, and it is even on the payslips noted down as "Comprehensive salary" (this shows our wage plus the flex fund on top). The director of mortgage talk is now dealing with it - has this sort of thing happened to anyone else? everyone else understands our situation? What are the chances this will be resolved?
3 months ago - 4 answers
Best Answer
Chosen by Asker
Halifax is correct, as you take it in pension contributions it is not salary. Many firms make pension contributions for their staff and this doesn't count either. The whole point of these salary multiples is to keep the mortgage to a level that you can afford, even if interest rates go up to 15% (which has happened during the last 20 years and can happen again). They are acting on your behalf (pity they didn't do this more before when they loaded their balance sheet with bad debts and forced the bank to the point of failure).
by Granny
3 months ago
Asker's Rating: 
Other Answers
I have just had hell with Halifax over savings. I think they are the worst most incompetent financial services company in the UK. HOWEVER you have to understand the state of the lending market. They only want to lend to rock solid borrowers, typically with 40% deposit, i.e existing house. They are not really interested in first time buyers with no deposit! Look at other mortgage providers, you will eventually find one but don't expect a good low interest rate!
by luludoodie- 3 months ago
It is in the interests of the financial advisor to sort this out. If they dont they wont get any commission on the mortgage. leave it to the advisor.
by not in my yard- 3 months ago
Sounds like Halifax are acting in the normal way. In my experience it is standard to deduct any regular outgoings such as loan repayments or pension contributions from the gross salary before calculating how much will be lent. It is not a question of them not believing how much you earn. It is simply that they are discounting any income that will not be available to repay the mortgage should that be required in the future. You must be aware of the credit crunch? As a result of this all lenders are now being far stricter than they were before. As a first time buyer you have no history of mortgage repayments. You also have no deposit, which indicates that you are unlikely to have any spare income each month (or are not responsible enough to save). For both these reasons they are going to be strictest of all with you.
by SimonC- 3 months ago