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Elad

Mmr Anecdotal

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Had an initial review with Halifax, so not the full blown interview. I am looking at remortgaging and moving at the same time (deal runs out and want to move).

In terms of affordability all the wanted to know was travel costs, maintenance costs (if a flat) and childcare, nothing else required.

They offered 4 x my salary (my wife's not taken into consideration at this stage, don't think it is worth it) on an LTV of under 60%.

But they were heavily on the restrictions for IO, basically getting one was out of the question. They wanted to see an endowment policy (can you even get these now?!) or and ISA, which was the normal get-out clause before - you just needed to say you had one. But they wanted to see a balance of £50,000 or more in a stocks and shares ISA, cash ISAs will not do...

Not an issue, but IO mortgages are very thin on the ground for non-BTL.

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To be fair, I'm still surprised at how much banks are willing to lend. halifax offer 4 times an annualised IT contractor rate. Your typical contractor might make £500 a day if they're lucky, but they could have no work for up to 6 months even in the good times. So, they could get a mortgage for £480k, even though they have an effective salary of £60k before tax.

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Fancy them wanting you to have a stocks and shares ISA rather than cash ISA. Are they mad? Stocks are also ripe for a crash too. IMO. Do own diligence/caveat emptor etc etc

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yeah that was a surprise for me as well, maybe they think that people will keep it in there for longer, or maybe they know that cash ISA savings rates are going to be below inflation for an extended period of time!!! *puts tin foil hat on*

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Interest only with an Isa makes sense if you have good equity and can get the low 2.5% interest rates. It's something I would consider, but last time I checked you needed to earn £50k+ per year to take out interest only.

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Good to hear that IO mortgages are going to become very hard to come by. Agree with janch about the preference of a stocks and shares ISA over a cash ISA. Not entirely prudent, is it?

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Interest only with an Isa makes sense if you have good equity and can get the low 2.5% interest rates. It's something I would consider, but last time I checked you needed to earn £50k+ per year to take out interest only.

Not from this interview, salary was not taken into consideration for IO vs Repayment.

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Even worse than I said - it's 5 times annualised day rates, e.g. £600k on a £500 day rate

Did they care about 3 years of signed off accounts?

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Did they care about 3 years of signed off accounts?

I wouldn't imagine so.

The mortgages that are based on day rates are usually advertised specifically as not needing lots of years of accounts.

This page even has a handy slider to see the crazy amounts of money they'll throw at you!

http://www.freelancerfinancials.uk.com/

And a quote from the page...

Underwriters don’t need payslips and 3 years worth of accounts. They can accurately calculate your true mortgage affordability based on your contract rate alone. After all, it’s the latter that truly reflects your full earning potential and disposable income.

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I wouldn't imagine so.

The mortgages that are based on day rates are usually advertised specifically as not needing lots of years of accounts.

This page even has a handy slider to see the crazy amounts of money they'll throw at you!

http://www.freelancerfinancials.uk.com/

And a quote from the page...

Gosh. I wouldn't have thought such a thing still existed. Still, worth knowing about should I go contracting...

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To be fair, I'm still surprised at how much banks are willing to lend. halifax offer 4 times an annualised IT contractor rate. Your typical contractor might make £500 a day if they're lucky, but they could have no work for up to 6 months even in the good times. So, they could get a mortgage for £480k, even though they have an effective salary of £60k before tax.

Surely they will want to borrow even more, somehow, to pay as much as possible.

On this forum it's mostly the lenders responsible, and not the tards pusing and falling over themselves for as much debt as possible.

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Hmm, that's probably going to make it awkward for contractors I come across. 6 month contracts seem to be the norm. I guess when a contractor renews they have a shiny new 6 month contract and still a few weeks on their current left and so would, briefly, qualify.

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Hmm, that's probably going to make it awkward for contractors I come across. 6 month contracts seem to be the norm. I guess when a contractor renews they have a shiny new 6 month contract and still a few weeks on their current left and so would, briefly, qualify.

Really depends on the company, but Halifax hire a huge number of IT contractors and they tend to start the renewal process around 3 months before expiry.

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That's great news - out of interest why were you even considering IO?

Sorry been on holiday last week.

It works for us currently, I get a bonus each year that I use to pay off the capital in a lump sum, and having lesser monthly payments allows me to invest some and keep some for some larger transactions that we needed to make over the year. We did not know when these payments were going to be made, but we wanted to save and have easy access to the cash. This might be the case in the next few years as well, so it was a consideration.

I know it is more expensive doing it that way, but that was the haircut I took for the liquidity.

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