Help - Mortgage within 10yrs of SPA
Discussion
Help needed please. Moving home, 50-60% LTV and having difficulty with our current mortgage provider HSBC. As I'm 10 years off SPA, and we've asked for a 22 year term, we need to provide pension evidence that we can still pay the mortgage once we are both 67 (wife a few years younger).
Not a problem I thought. We both have good government pensions that will give us tax free lump sums and we both have SIPPS that will also give tax free lump sums. Even with pessimistic projections, the lump sums will easily pay off the mortgage balance.
However, HSBC are being obtuse and insisting on annuity projections to prove that at age 67 we can still afford the monthly payments and won't consider the pension pot value and lump sums. I'm not purchasing an annuity so we at an impasse.
Any one have any experience with using pensions to get mortgages or even a LFA who knows what's what....
Thanks
Not a problem I thought. We both have good government pensions that will give us tax free lump sums and we both have SIPPS that will also give tax free lump sums. Even with pessimistic projections, the lump sums will easily pay off the mortgage balance.
However, HSBC are being obtuse and insisting on annuity projections to prove that at age 67 we can still afford the monthly payments and won't consider the pension pot value and lump sums. I'm not purchasing an annuity so we at an impasse.
Any one have any experience with using pensions to get mortgages or even a LFA who knows what's what....
Thanks
That is interesting. I just went to customer service as an existing customer. The call centre person gave a decision in principle of 2.5 times the required amount as it was done on salaries. Then it went to the mortgage advisor who thought it would need to go to underwriting but had no idea what underwriting would look for.
Awkward back and forth comms via the advisor (I'm not allowed to communicate direct with underwriting) suggests that underwriting either think I'm already retired or think that a SIPP only results in a guaranteed income and don't understand that they can deliver a tax free lump sum. Very frustrating.
Close to pulling the plug and starting a completely new application but a bit more savvy this time. Very disappointed with HSBC
Awkward back and forth comms via the advisor (I'm not allowed to communicate direct with underwriting) suggests that underwriting either think I'm already retired or think that a SIPP only results in a guaranteed income and don't understand that they can deliver a tax free lump sum. Very frustrating.
Close to pulling the plug and starting a completely new application but a bit more savvy this time. Very disappointed with HSBC
Fair enough. Just frustrating when the combined government and SIPP tax free lump sums will pay off the outstanding mortgage balance @67 by a factor of 2, but the underwriters seem to fixated on an annuity income being used to service the monthly payments.
Why on earth would I keep paying off a mortgage past retirement and fret about the monthlies when it could be cleared instantly twice over.
We can go to 50% LTV. Would that make them less pedantic over pension income? Again, HSBC mortgage advisor was unsure if this would make a difference... thanks
Why on earth would I keep paying off a mortgage past retirement and fret about the monthlies when it could be cleared instantly twice over.
We can go to 50% LTV. Would that make them less pedantic over pension income? Again, HSBC mortgage advisor was unsure if this would make a difference... thanks
TVRBRZ said:
That is interesting. I just went to customer service as an existing customer. The call centre person gave a decision in principle of 2.5 times the required amount as it was done on salaries. Then it went to the mortgage advisor who thought it would need to go to underwriting but had no idea what underwriting would look for.
Awkward back and forth comms via the advisor (I'm not allowed to communicate direct with underwriting) suggests that underwriting either think I'm already retired or think that a SIPP only results in a guaranteed income and don't understand that they can deliver a tax free lump sum. Very frustrating.
Close to pulling the plug and starting a completely new application but a bit more savvy this time. Very disappointed with HSBC
Classic example of applying direct vs applying via a broker.Awkward back and forth comms via the advisor (I'm not allowed to communicate direct with underwriting) suggests that underwriting either think I'm already retired or think that a SIPP only results in a guaranteed income and don't understand that they can deliver a tax free lump sum. Very frustrating.
Close to pulling the plug and starting a completely new application but a bit more savvy this time. Very disappointed with HSBC
A broker will know how to present your application from the outset so that your application goes through without touching the sides. As a broker, lots of people think that the only benefit is that a broker may have access to cheaper rates. We pick up a LOT of business where a client has applied directly to a lender and been declined and now they need help.........get some help
Help has been requested!
Still smarting over the supposed irrelevance of the tax free lump. I looked at the repayment tables and checked where the mortgage balance would be after 10 yrs (age 67, SPA).
Our accrued lump sums now, will cover the mortgage balance in 10 yrs time. No allowance for inflation or that I'll have another 10 yrs of contributions and my wife will have 13 yrs of topping up the pension.
Aaaaaarrrggghh almost makes me want to retire now, buy the house outright with the lump sum and then spend the rest of my time writing grumpy posts on pistonheads.....oh I do that already
Still smarting over the supposed irrelevance of the tax free lump. I looked at the repayment tables and checked where the mortgage balance would be after 10 yrs (age 67, SPA).
Our accrued lump sums now, will cover the mortgage balance in 10 yrs time. No allowance for inflation or that I'll have another 10 yrs of contributions and my wife will have 13 yrs of topping up the pension.
Aaaaaarrrggghh almost makes me want to retire now, buy the house outright with the lump sum and then spend the rest of my time writing grumpy posts on pistonheads.....oh I do that already
TVRBRZ said:
Help has been requested!
Still smarting over the supposed irrelevance of the tax free lump. I looked at the repayment tables and checked where the mortgage balance would be after 10 yrs (age 67, SPA).
Our accrued lump sums now, will cover the mortgage balance in 10 yrs time. No allowance for inflation or that I'll have another 10 yrs of contributions and my wife will have 13 yrs of topping up the pension.
Aaaaaarrrggghh almost makes me want to retire now, buy the house outright with the lump sum and then spend the rest of my time writing grumpy posts on pistonheads.....oh I do that already
Often logic will not apply to a lender.Still smarting over the supposed irrelevance of the tax free lump. I looked at the repayment tables and checked where the mortgage balance would be after 10 yrs (age 67, SPA).
Our accrued lump sums now, will cover the mortgage balance in 10 yrs time. No allowance for inflation or that I'll have another 10 yrs of contributions and my wife will have 13 yrs of topping up the pension.
Aaaaaarrrggghh almost makes me want to retire now, buy the house outright with the lump sum and then spend the rest of my time writing grumpy posts on pistonheads.....oh I do that already
Personally, I don’t like tax free lump sums being used to pay off mortgages, the money is retirement money but that comes under wider planning really as it might be best for some people.
Fair enough. Come the hypothetical SPA point it may make more sense to keep the 25% invested and get better returns, especially if the mortgage rate is low.
However my wife will end up a 40% taxpayer as a pensioner, with me almost at 40% unless we do something to reduce the pot at SPA. Hence keen to set ourselves up in a nice property now rather than just keep saving for the future.
However my wife will end up a 40% taxpayer as a pensioner, with me almost at 40% unless we do something to reduce the pot at SPA. Hence keen to set ourselves up in a nice property now rather than just keep saving for the future.
TVRBRZ said:
Fair enough. Come the hypothetical SPA point it may make more sense to keep the 25% invested and get better returns, especially if the mortgage rate is low.
However my wife will end up a 40% taxpayer as a pensioner, with me almost at 40% unless we do something to reduce the pot at SPA. Hence keen to set ourselves up in a nice property now rather than just keep saving for the future.
I was more thinking of taking the tax free cash and invest in areas to utilise capital gains tax allowances for a tax free income plus non taxable income products such as ISA’s and the like.However my wife will end up a 40% taxpayer as a pensioner, with me almost at 40% unless we do something to reduce the pot at SPA. Hence keen to set ourselves up in a nice property now rather than just keep saving for the future.
Sarnie said:
Classic example of applying direct vs applying via a broker.
A broker will know how to present your application from the outset so that your application goes through without touching the sides. As a broker, lots of people think that the only benefit is that a broker may have access to cheaper rates. We pick up a LOT of business where a client has applied directly to a lender and been declined and now they need help.........get some help
This.A broker will know how to present your application from the outset so that your application goes through without touching the sides. As a broker, lots of people think that the only benefit is that a broker may have access to cheaper rates. We pick up a LOT of business where a client has applied directly to a lender and been declined and now they need help.........get some help
The fee to a broker is worth the aggro and stress of trying to sort yourself. Having just been through this myself and going direct, I do think it would have been easier to get a broker to sort (despite ultimately sorting myself). It's aggy and stressful to negotiate the banks process, unless you have a slam dunk case a few hundred quid is FA in the scheme of mortgages / moving cost. Even though the bank will lend to 75, I chose to clip to 20 years and 67. Even then it was a faff, despite having significant pension and share savings (that vest in 18month that more than clear). Getting the paperwork correct is what the fee is for. Explaining to the banks in house team why I wanted a floating/ BoE pegged mortgage was a comedy of the highest order. If you want to avoid that, pony up a few hundred quid (although in fairness to Barclays once we'd been through the agg, under writing approved in a day - low LTV / multiple helping).
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