Self Cert/Abbey Mortgage - Advice Needed!

Midknight

Hi,

I have had a mortgage (£246K) with the Abbey since 2003(and am tied into until 2010) and never missed a payment etc. Last year I left PAYE employment and am now self employed - I am now looking to move house and borrow some more money but will also be putting in more money as a deposit - I intend to put down £196k as a deposit and I want to increase my mortgage by £50k (am looking to buy up to £499k).

The problem I have is I am now self employed and although I earn enough money to cover this (@ £70k gross) I cannot prove it as I have only been doing in 12 months and I do my own accounts.

The Abbey effectively do not know I am now self employed but I am not sure if I tell them now that could cause problems with my existing mortgage and would probably give me no chance of getting anymore cash - anyone got any advice???

Basically I can port my existing mortgage but I need to find another £40 - 50k from somewhere and would really like to just add via Abbey but afraid that a - they wont lend it and b - will open a can of worms regarding being self employed!!!

Help!:mad:

_Andy_

If you are porting the mortgage it will involve a new application.
It is highly unlikely Abbey would approve it.

Midknight

So if you are simply porting your existing mortgage to a new property that would involve a new application????

I thought you could simply 'take it with you' providing the survey on the new property meets their approval (especially if you are putting MORE equity in).

_Andy_

No, it would be a new application, hence me saying, it would be a new application.

Midknight

So if that is the case - would I be better off going with a different lender and trying to go down the self cert mortgage route?
But then I am going to get stung with early redemption fees from the Abbey!

I did not realize porting it over would effectively mean a whole new application - does that mean I would have a choice of better rates (as mine are fairly high at 5.69%) if I decided to try and stay with the Abbey and no redemption fee?

luckyfool

You are not going to get better rates going to a new lender as self cert mortgages are more expensive, even with a big deposit you can expect to pay in the high 5%'s even if you can get one (which is by no means certain). You can stay with Abbey at your present property and continue paying your current rate (whether or not you tell them about your new circumstances), however if you ask to borrow more money or to "port" your mortgage then you must tell them of your circumstances and you would need to meet their criteria at that time (which you do not).

Midknight

So does that mean effectively I cannot move house even though I can afford to and I do earn enough to but because I am self employed???

So my options would be:

not move (which is not an option for me)

try and get a self cert mortgage

thats it!???

luckyfool

Basically. Portability from any lender always only means that they will allow you to move that product and loan to a new property subject to a) you, and b) the property meeting their criteria at that time. e.g. Look at Northern Rock Together customers who borrowed up to 120% on "portable mortgages". Their mortgages might be portable, but they can effectively only move the deal if they can bring their ltv down to 85%, or whatever Northern Rock would consider lending them on current criteria.

For you Options are

1. Sell your current property, pay any penalties and either rent for a while or buy with the deposit on a self certification basis.
2. Retain your current property (avoiding penalties), requesting a consent to let from Abbey, and rent at your new location for 6-12 months or longer term (if the move is due to either needing somewhere bigger or relocating). At that point your penalties would be gone, and you would hopefully have some accounts to be able to get a full status deal.
3. Stay where you are, which is obviously not an option from what you say.

The complexity of your circumstances mean you should really be speaking to a broker in more detail to get some proper advice.

Midknight

Well I need to move but it looks like being self cert will be what I have to aim for. However will speak to Abbey to see what they have to say first.

Didn't realize transfering my mortgage to a new property especially as I am putting more equity into it would mean I would have to go through all the financial checks again.