Jimpreza

Long story short. A work colleague has been to see a financial adviser last month and today he has shown me his mortgage offer. Because of this I owe him £50 as I said he'd never get a mortgage in his situation.

120k house with 36k deposit.

He got the deposit by getting a 20k loan around September time and 14k on credit cards and 2k savings. He reckons he told the adviser about the loan repayments but said he only had 3 months remaining. He also told the adviser about the credit card debt but said again that it'd be paid off in 3 months and that he only owed a few k.

This can't be true surely. Call me tight if you want, I just don't wanna hand him over £50 if he's talking sh1te.

Aaron1978

iTrader: (12)

i'm far from being any financial genius but when the credit search is done it will bring up loans/credit cards, how much is owed and how long left to pay.

While i'm not saying he wouldn't get a mortgage with these debts, i'm sure they would have something to say about the lies

Wouldn't it be some sort of fraud too?

probably wrong on all counts, just my opinion

Aaron

Aaron1978

iTrader: (12)

just to add the advisor gives you a decision in principle (on what you tell them which could be you earn 10k a week), it then goes to the mortgage companys to do all the checks etc and make the final decision.

Jimpreza

He's actually had the approval from the mortgage lender and is starting the ball rolling with the solicitor on Monday. He reckons the loan and credit card accounts show up on the credit search and that payments have been made to them. However, the balance doesn't show on the credit search.

Aaron1978

iTrader: (12)

i'm pretty sure it says on a credit report the outstanding balance, which would be quite high and not likely to be able to pay off in 3 months

it showed that on mine and my girlfriends reports, maybe they don't see all the info on them

just out of curiosity how much does your mate earn? i mean there is going to be some serious repayments on 14k on credit cards, minimum of £700 on cards. must be £400-£500 on mortgage payments on a fixed rate on around 4-5%(these are very rough figures off the top of my head ), £20,000 over say 10 yrs must be £300 ish

all very rough figures mind

Jimpreza

Your figures seem pretty close to what I had calculated. He said he's gone self certified as he's on commission. I'd reckon he earns somewhere between 20 and 30k.

Aaron1978

iTrader: (12)

i reckon he'll need 24k a year to cover bills, food maybe mobile phone, council tax etc etc, and not forgetting those credit cards that might not be interest free you will get nowhere fast paying them off at min payment each month , also not sure what sort of interest he'll get on self cert but i can't imagine it would be as good as first thought.

njkmrs

Give him the fifty quid .Hes going to need it more than you !!!!

Spooky Mulder

And people blame banks for the credit crunch, the real problem is this situation multiplied thousands of times over...

The approach is usually based on affordability - do the outgoings balance out against net income - if the mortgage company have signed this off then your mate must either earn a lot more than 20-30k or has lied and will not be able to pay.

PaulC72

another potential repossession and defaultee by the look of it.

I wouldn't pay him the £50 until he has bought a house, moved in and paid at least 6months mortgage and all his other bills, as by then he'll probably be swinging from the lights trying to figure out how he is going to pay for it all.

However that said the payments of total £1500 per month are possible if he earns 40-50k if you imagine normal payment for bills would only come to 600 a month plus food and spends

Approx total outgoings say 2700 which would be possible .

I think the main provblem would be the way he has gone about doing it

Timwinner

iTrader: (3)

He has made a big mistake, I (in a round abouts kinda way) work in the financial sector, and even though I work figures out in corporate quantities normally I can see that his figures just dont add up.

Give him the £50 and start saving your own deposit so you can buy this place off him in a few months.

When you look at this on paper you can see he is left with pennies each month, fingers crossed he doesnt need any plumbing repairs or similar!!!

He might have massaged the figures to appease the mortgage company but you cant lie to your pay packet.

Jimpreza

The bet wasn't over if he could afford the place with bills it was if they'd give him a mortgage with all his debt that he lied about on the application. I suppose the question is can the mortgage company see how many months he has left to pay on the loan and credit card (i.e balance outstanding).

I know he can't afford it but I think he plans on renting a room or 2 out to young girl students .

Timwinner

iTrader: (3)

They can find out loan terms easily enough, however if he says he will pay them off before the mortgage is taken out then, and I know its not smart lending, but sometimes that verbal conformation is enough.

It used to go on up until about 8 months ago all the time. but they do carry out more checks now days.

I would say for that amount of money on a self cert, Yes he will get the loan. And I think you'll loose your 50 notes.
I have a £5 on him getting it, People place your bets please.

HankScorpio

The balance, limit and payment history will be on a credit report but not all companies use both big agencies, I have payments listed on Experian but not on Equifax and vice versa.
If mortgage company only checks one, they won't see the other.

Jimpreza

Yeh shall we open a book?

He hasn't said he'll pay them off early he has lied and stated that there is only 3 months left to pay on the loan.

PaulC72

I think he may have more problems than that if he actually gets the mortgage, wouldn't it be classed as fraud potentially?

Either way unless he earns a good wedge he may or may not be able to do it and if he has self certed more than he actually earns then it would be possible.

TopBanana

We did have at least one professional financial advisor on here, but he's now in hiding

zs_phil

iTrader: (1)

why the hell would anyone get the deposit that way . surely he could just put that away every month (his monthly outgoings) if he already had 2k saved up he would get that mortgage with 5% of the mortgage saved up .probably even save money on the house price as well when he has saved up as prices might of dropped another 10% .
what type of business is he in what if his work dries up miss 1 payment on either credit card at that price or mortgage and it will be hard to get back in front.
didnt do this last year in america though did he

EddScott

Assuming his salary is enough to cover the outgoings including the new mortgage theres no reason why he couldn't get a mortgage.

As for saying the loan has 3 months left sounds like rubbish. The credit check will tell you when the debt was incurrred (if not the term of the loan) and they will ask questions regarding a £20K loan that was only for 6 months???

Also depends on who the mortgage has been placed with.

sti-04!!

Quite frankly ........................ he's ****ed

Spooky Mulder

It is EXTREMELY unlikely he would get a self-cert mortgage of 95% in the current market.

Even long term proven payers with full credit history are struggling to get 95% loans at the moment.