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Halifax Lending To Contractors - An Anecdote

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Mods feel free to move to the Anecdotals section - but I thought it worthy of the main forum for a while.

Speaking to a work colleague this week. Bought a place 3 years ago. Also owns a previous place they rent out as an 'investment'. Not a huge amount of equity in it though.

Saw a place they really liked on a Monday 3 years ago. Called up their bank - Halifax - first thing Monday morning to ask about potential for mortgage for it. Wasn't expecting anything. Only had Ltd company for contracting set up for less than a year. Didnt even have one full year of accounts.

Bloke told her no problem. Go on and put an offer in on the place. He actually advised her to do that straight away. We just need a copy of your contract with daily rate on it and - wait for it - this is no joke - a copy of your CV.

They sent copies over to the Halifax - and had an agreement in principle by noon that same day. Put an offer in on the place - and mortgage fully agreed by the Wednesday.

A copy of your CV. A copy of your CV. A copy of your CV.

Now whether this was standard Halifax practice or a lone shark at it - who knows - it does however point pretty clearly to one of the reasons this bubble has started to froth over again in the last few years.

Even knowing how dodgy the mortgage industry in general can be - I was still pretty shocked to hear this. And from a major lender.

Its almost self cert lending again.......

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Mods feel free to move to the Anecdotals section - but I thought it worthy of the main forum for a while.

Speaking to a work colleague this week. Bought a place 3 years ago. Also owns a previous place they rent out as an 'investment'. Not a huge amount of equity in it though.

Saw a place they really liked on a Monday 3 years ago. Called up their bank - Halifax - first thing Monday morning to ask about potential for mortgage for it. Wasn't expecting anything. Only had Ltd company for contracting set up for less than a year. Didnt even have one full year of accounts.

Bloke told her no problem. Go on and put an offer in on the place. He actually advised her to do that straight away. We just need a copy of your contract with daily rate on it and - wait for it - this is no joke - a copy of your CV.

They sent copies over to the Halifax - and had an agreement in principle by noon that same day. Put an offer in on the place - and mortgage fully agreed by the Wednesday.

A copy of your CV. A copy of your CV. A copy of your CV.

Now whether this was standard Halifax practice or a lone shark at it - who knows - it does however point pretty clearly to one of the reasons this bubble has started to froth over again in the last few years.

Even knowing how dodgy the mortgage industry in general can be - I was still pretty shocked to hear this. And from a major lender.

Its almost self cert lending again.......

Great anecdote. I expect Osborne and Carney to greenlight a resumption of liar lending at some point in the next couple of years, if they haven't already.

Edited by zugzwang

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Mods feel free to move to the Anecdotals section - but I thought it worthy of the main forum for a while.

Speaking to a work colleague this week. Bought a place 3 years ago. Also owns a previous place they rent out as an 'investment'. Not a huge amount of equity in it though.

Saw a place they really liked on a Monday 3 years ago. Called up their bank - Halifax - first thing Monday morning to ask about potential for mortgage for it. Wasn't expecting anything. Only had Ltd company for contracting set up for less than a year. Didnt even have one full year of accounts.

Bloke told her no problem. Go on and put an offer in on the place. He actually advised her to do that straight away. We just need a copy of your contract with daily rate on it and - wait for it - this is no joke - a copy of your CV.

They sent copies over to the Halifax - and had an agreement in principle by noon that same day. Put an offer in on the place - and mortgage fully agreed by the Wednesday.

A copy of your CV. A copy of your CV. A copy of your CV.

Now whether this was standard Halifax practice or a lone shark at it - who knows - it does however point pretty clearly to one of the reasons this bubble has started to froth over again in the last few years.

Even knowing how dodgy the mortgage industry in general can be - I was still pretty shocked to hear this. And from a major lender.

Its almost self cert lending again.......

Why is this significant?

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Its significant for me because - whilst I know that clearly lending has got a bit crazy again - I never actually realised it had gone this far. And this was fully 3 years ago. So if this has been happening all across the shop for 3 years well - it sort of explains whats happened to the market.

And for the record she was offered £400,000. Within 2 hours.

For a LTD company contractor that didnt have even one full years accounts but could provide a copy of her CV - which she wrote herself.

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ah, by CV, he actually meant current valuation, of the property??????

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This is an anecdote of three years ago?

I tried last autumn, also in the circumstances of having a new contract but no history of accounts as contractor. For a modest mortgage of around 50%, and the absolute proven means of repayment in less than a year (though not the intention of paying that quickly, as it would close off a good way of avoiding tax). Answer was no from several lenders, and the mortgage brokers didn't even call me back.

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I regularly get spam mails from some bunch called Contractor Mortgages Made Easy - I must have signed up to something related and I've never blocked them because it's been interesting to see what they are offering.

A few months ago they sent out an email telling contractors that they could borrow "based on your current contract rate", regardless of how long that contract was likely to last, so in theory, you could apply for and get a mortgage a month before your current contract came to an end, based on a pro rata contract value.

They've gone a little quiet of late, but this sort of thing doesn't surprise me. It does make me wonder how stupid some contractors must be to take up that offer. I would have thought that in an IR35 investigation, the fact that you'd taken on a 25 year mortgage based on your "short term, I'm not a disguised employee, honest guv" contract rate might raise one or two eyebrows with those good folks at the Revenue.

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I regularly get spam mails from some bunch called Contractor Mortgages Made Easy - I must have signed up to something related and I've never blocked them because it's been interesting to see what they are offering.

A few months ago they sent out an email telling contractors that they could borrow "based on your current contract rate", regardless of how long that contract was likely to last, so in theory, you could apply for and get a mortgage a month before your current contract came to an end, based on a pro rata contract value.

They've gone a little quiet of late, but this sort of thing doesn't surprise me. It does make me wonder how stupid some contractors must be to take up that offer. I would have thought that in an IR35 investigation, the fact that you'd taken on a 25 year mortgage based on your "short term, I'm not a disguised employee, honest guv" contract rate might raise one or two eyebrows with those good folks at the Revenue.

IR35 is neither here no there the change in the divi tax saw to that.

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I got a contractor mortgage with Clydesdale last year. They needed copies of my last 3 contracts and CV. They were willing to offer on the basis of my day rate and offered to lend me several hundred thousand more than I needed. 10% deposit minimum.

It was more difficult providing evidence of deposit to the solicitor than it was getting a mortgage offer.

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This is an anecdote of three years ago?

I tried last autumn, also in the circumstances of having a new contract but no history of accounts as contractor. For a modest mortgage of around 50%, and the absolute proven means of repayment in less than a year (though not the intention of paying that quickly, as it would close off a good way of avoiding tax). Answer was no from several lenders, and the mortgage brokers didn't even call me back.

The problem there was you wouldn't be paying much interest in the year before you redeemed the mortgage. I wonder what the response would have been if you wanted a mortgage for a longer term.

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CV as in Curriculam Vitae. I assume to show 'evidence' of work history.

Not sure if they are outside the standard regulations for mortgages as a whole ?

ROBMCC - No surprise - I know of others I have spoken to who have had these almost thrown at them with little to back them up.

Porca Miseria - Think you mentioned this before - You checked your credit rating or similar ? You seem to have had real difficulty getting a mortgage in a situation where many others barely have to lift a finger. Strange.

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CV as in Curriculam Vitae. I assume to show 'evidence' of work history.

Not sure if they are outside the standard regulations for mortgages as a whole ?

ROBMCC - No surprise - I know of others I have spoken to who have had these almost thrown at them with little to back them up.

Porca Miseria - Think you mentioned this before - You checked your credit rating or similar ? You seem to have had real difficulty getting a mortgage in a situation where many others barely have to lift a finger. Strange.

Maybe they know they porca miseria isn't going to be the kind of blind consumer they want?

I had a 999 rating and couldn't even get a residential mortgage for 3.5 times my (decent) salary in 2013. I suspect it's because they saw my credit history contained many early settlements and overpayments. Or what else could it have been?

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Yes possible they are actively looking for not quite so good borrowers. ******ing nuts.

As for MMR - I dont reckon its made a huge difference. Brokers know how to get 'around' things. They see it as their job IMO.

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Mods feel free to move to the Anecdotals section - but I thought it worthy of the main forum for a while.

Speaking to a work colleague this week. Bought a place 3 years ago. Also owns a previous place they rent out as an 'investment'. Not a huge amount of equity in it though.

Saw a place they really liked on a Monday 3 years ago. Called up their bank - Halifax - first thing Monday morning to ask about potential for mortgage for it. Wasn't expecting anything. Only had Ltd company for contracting set up for less than a year. Didnt even have one full year of accounts.

Bloke told her no problem. Go on and put an offer in on the place. He actually advised her to do that straight away. We just need a copy of your contract with daily rate on it and - wait for it - this is no joke - a copy of your CV.

They sent copies over to the Halifax - and had an agreement in principle by noon that same day. Put an offer in on the place - and mortgage fully agreed by the Wednesday.

A copy of your CV. A copy of your CV. A copy of your CV.

Now whether this was standard Halifax practice or a lone shark at it - who knows - it does however point pretty clearly to one of the reasons this bubble has started to froth over again in the last few years.

Even knowing how dodgy the mortgage industry in general can be - I was still pretty shocked to hear this. And from a major lender.

Its almost self cert lending again.......

I would lend money to them as well.

Take all their properties in a HPC, or let gov hit them on C24.

BTW - what about your work pal? Pure Innocence? Nowt dodgy about him/her? 2 properties, one rented out, and wants yet another?

This has been happening last few years. They exist to take risks off the banks, and can go for all the equity in all properties in a HPC.

BTLer greed to devour itself.

Anyway your work pal still has higher stamp duty to think about.... do they know about it yet? If gets the BTL mortgage that want, payz the higher stamp duty, and hpc... own choices.

It's not fairytale land. Certainly not for millions or renter-savers it isn't. Your work pal and other BTLers just like them, going to discover that.

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She does realise its a joke - but to cheer you all up a little bit - the reason I was talking about this to her was she was thinking about moving house to a larger place she liked.

Talked to her accountant and mortgage broker [Halifax I presume again] and found it now it would cost her over £20,000 just to move house this time - due to SDLT and all the standard charges fees etc..

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This is an anecdote of three years ago?

I tried last autumn, also in the circumstances of having a new contract but no history of accounts as contractor. For a modest mortgage of around 50%, and the absolute proven means of repayment in less than a year (though not the intention of paying that quickly, as it would close off a good way of avoiding tax). Answer was no from several lenders, and the mortgage brokers didn't even call me back.

but but, lenders are there to help you!!!! Its nothing to do with selling mortgages....or maybe it is.

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Yes possible they are actively looking for not quite so good borrowers. ******ing nuts.

Allegedly the lenders are looking for the likes of perpetual 'minimum payers' on credit cards, but no actual defaults.

They want people who will keep making regular payments but are happy to not try to minimise their interest owed.

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Allegedly the lenders are looking for the likes of perpetual 'minimum payers' on credit cards, but no actual defaults.

They want people who will keep making regular payments but are happy to not try to minimise their interest owed.

I know a loan shark like that.....just saying, like.

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