Do mortgage lenders check your employer to see if the company is secure, legit, doing well or poorly

[River Phoenix]

How much digging do lenders do into your employer ?

In this risk averse world, do they do a financial health check on your employer and if so, how ?

Mine seems fine but it is only small and obviously has more chance of going to the wall than BP so does that figure in the underwriting for a mortgage ?

Thanks

[Never-In-Doubt]

Re: Do mortgage lenders check your employer to see if the company is secure, legit, doing well or po

No they assess the applicant. It's not their position to underwrite your employer - possibly different if you're self employed of course.

It's like us; (and many others) we're small and maybe have a low credit score (new business) but we have financially healthy backing should I ever need to call on it. However that's not seen by any risk assessment hence it'd be futile really, as well as unlawful to conduct a credit risk on your employer.

Of course they'll check them out to see they exist as well as verify your employment with the firm.

[PlanB]

Re: Do mortgage lenders check your employer to see if the company is secure, legit, doing well or po

The answer to your question is 'No' as Niddy has said.

I can see from your older posts that you are gearing yourself up to apply for a mortgage soon and want to future proof yourself against a refusal. Nowadays the lenders are asking more and more searching questions about your lifestyle. Some brokers advise cancelling various DDs for mundane items (magazine subscriptions or DVD rental etc) and then start them up again after your application has been successful because lenders scrutinize bank statements to get an overall picture of your 'wealth'.

In the 90s when endowment mortgages were popular people were asked by lenders to take an HIV test before granting a loan which I found quite shocking. Even more shocking was that it was only male applicants who had to undergo the HIV test because they were considered to be high risk even if the application was a joint one.

It was the insurance element of the loan that needed to know your health/lifespan but you couldn't get the mortgage without it. That practice doesn't happen anymore for mortgages but it does become an issue if you want to take out an associated life insurance at the same time as the loan which people with families often do.

http://www.independent.co.uk/life-st...e-1567102.html

[SA Gold]

Re: Do mortgage lenders check your employer to see if the company is secure, legit, doing well or po

In the 90s when endowment mortgages were popular people were asked by lenders to take an HIV test before granting a loan which I found quite shocking.

Blimey, i had no idea that used to happen!

[SXGuy]

Re: Do mortgage lenders check your employer to see if the company is secure, legit, doing well or po

Wow I must have been lucky, my associated life policy never asked such a question!

PlanB and Niddy have said it all really. From a personal view, I doubt any employer would want to give up details of the companies health no matter who asked, so that's something they wouldn't be able to do, not every business has public published accounts.

[PlanB]

Re: Do mortgage lenders check your employer to see if the company is secure, legit, doing well or po

Wow I must have been lucky, my associated life policy never asked such a question!

Possibly because you're married? It's a question asked of single men. The question is often worded "have you ever had a HIV test?". We all know why they're asking it and I think it stinks of gay prejudice.

There are however specialist policies for people with HIV who want to take out a mortgage http://www.positive-finance.info/

[pompeyfaith]

Re: Do mortgage lenders check your employer to see if the company is secure, legit, doing well or po

Wow I must have been lucky, my associated life policy never asked such a question!

PlanB and Niddy have said it all really. From a personal view, I doubt any employer would want to give up details of the companies health no matter who asked, so that's something they wouldn't be able to do, not every business has public published accounts.

Same with me never been asked that, but then the broker did visit home and could see I was married

[SXGuy]

Re: Do mortgage lenders check your employer to see if the company is secure, legit, doing well or po

Well yes, our broker knows us very well and knows im married so he may well have not needed to ask.

[River Phoenix]

Re: Do mortgage lenders check your employer to see if the company is secure, legit, doing well or po

Yeah you're right, trying to position for a mortgage in the (potentially) not too distant future.

Reinvigorated an old off radar Nationwide account into a main current account a while ago (25 years member) and have maintained it spotlessly since. Added an other couple of accounts over time, got a mobile contract and then Amex and a few other cards, all paid off in full each month. Income has risen significantly and regular savings are good whilst keeping outgoings low. Credit agency files monitored religiously and not a blemish on any of them. Scores (pointless nonsense I know) rising back to levels before splurge to get credit cards and when bolstered by no recent searches and faultless repayment history, it all looks very good indeed. However, I'm trying to see how far I can push the envelope.

I don't come close to maximum income multiples but I would like either a high LTV to get a more expensive property or potentially get interest only at 75%/80% LTV. My perception is that makes it more risky and thus I question whether the underwriting would be more severe.

[PlanB]

Re: Do mortgage lenders check your employer to see if the company is secure, legit, doing well or po

I've read your mortgage wish list. No one has a crystal ball to tell you what you will be able to achieve. The mortgage market changes daily with products being withdrawn at short notice according to the financial climate. Lenders allocate a certain tranche of money for a product and when that's been used up the product is no longer on offer.

Interest only mortgages are only available to those who can demonstrate a viable way to pay off the loan balance at the end of the term such as a pension plan or long-term savings account/plan which is locked-in for years.

If you already bank with Nationwide then that may be a good starting point since there will be a history of your salary and general expenditure for them to see with their own eyes.

Read their website for intermediates (brokers) where you will see their Lending Criteria in great detail. They do offer products up to 95% LTV but a lot will depend on your personal circumstances and the type of property you intend to buy.

http://www.nationwide-intermediary.c...ngcriteria/a_z

Good Luck with your search

[River Phoenix]

Re: Do mortgage lenders check your employer to see if the company is secure, legit, doing well or po

Many thanks for that, re Nationwide.

I do look as some intermediary sites, to get the behind the scenes information as best I can. Forewarned if forearmed as they say.

I remember back in the late 1990s when I got my last mortgage. There was no real internet presence and gathering information took forever on the phone. However, the ability of the lender to prick holes in the finances of the potential borrower was equally limited; payslip, bank statement, perhaps a P60 etc. These days, or at least not too far in the future, they'll be able to review your taxes, either through the open window where we know about it or via the back door, where we never know, creating a black list of undesirable borrowers. Perhaps as credit card interest rates are somewhat specific to lending criteria, then mortgages could do a similar way. Certainly something better than the yes or no we have now.

If I could put down 70% then I'd go interest only in a heartbeat but I need a higher LTV to buy now and not later. 70% LTV seems fairly commonplace and some at 75% but ideally I'd like 80%. The other options is to borrow at 85% or 90% and remortgage in a couple of years, so I'd probably take a lender who currently does interest only. Unfortunately, that means Nationwide is a non starter.

[SXGuy]

Re: Do mortgage lenders check your employer to see if the company is secure, legit, doing well or po

Just to add my 2 cents. I'd be wary of taking a 90% ltv interest only if your intension was to re mortgage in a few years. What if house prices drop by 15%?. Just a thought.