Best Lender For Self Employed?

payless

longshot wrote: »

payless - if you have 50% equity you should have no reason to
provide income details as the risk is so minimal it would equate to
a 75% drop in house prices from 2007 and that would be break even
so perhaps a 90% drop would then command the bank to ask for
income details but the situation isn't that bad or doesn't seem to be.

you don't always have to prove your income, an 18 year old
could buy a million pound house if they had no income but 500,000
pounds in the bank, the bank will always get it's money back so virtually
no risk, so please don't be pompous.

different story on a 100% loan.

Pompous - Oh what Poppycock :-)

First rule of prudent lending- lend to the person not the security!. Maybe read up on CAMPARI- the Canons of Lending

Would it be prudent to lend at 50% LTV just so you can repossess if a self employed person becomes unemployed and is unable to service the debt?

to quote an FSA source ..

No self-respecting banker would make a decision to lend just on the basis of the value of the security held – that would be pawnbroking rather than banking.

_Andy_

longshot wrote: »

you don't always have to prove your income, an 18 year old
could buy a million pound house if they had no income but 500,000
pounds in the bank, the bank will always get it's money back so virtually
no risk, so please don't be pompous.

.

And exactly which lenders will do this then ?

payless

joo2810 wrote: »

Yes we will be able to verify our income if requested. I was merely saying that we had no problems getting a mortgage and wasnt asked for any proof at the time.

so yes the correct use of a fast-track system

Why did you comment on the 4.89% fixed at 2 years - what are your views on this

whilst not inclined to comment, given your "thank -you " to a post below that said I was pompous :-0

Everyone has different circumstances, so only you and the adviser can say whats the most suitable - what I am finding at present is a demand for longer term fixes- even though they are higher than shorter deals ( or to remain on low SVR / existing term trackers) as people seem concerned at the possible rates thats they may be looking in 2 yrs if only fixing for 2 yrs + the increasing fees involved each time one takes a new deal ( re-mtg or inhouse),

Conrad

joo2810 wrote: »

We were really worried we wouldnt be able to get a mortgage but it was so easy. We werent asked for any proof of earnings either.

Your adviser must hold documentary evidence on his own file to comply with 'responsible lending'.

I have heard of several instances localy where clients were subject to random income checks AFTER completion. Failure to comply can have serious consequences.

If your broker denies this - call the FSA and ask them yourself.

Conrad

longshot wrote: »

payless - if you have 50% equity you should have no reason to
provide income details as the risk is so minimal it would equate to
a 75% drop in house prices from 2007 and that would be break even
so perhaps a 90% drop would then command the bank to ask for
income details but the situation isn't that bad or doesn't seem to be.

you don't always have to prove your income, an 18 year old
could buy a million pound house if they had no income but 500,000
pounds in the bank, the bank will always get it's money back so virtually
no risk, so please don't be pompous.

different story on a 100% loan.

The written Financial Services Authority rules on this are very clear, regardless of equity.

All lenders have to sign bi - annual submissions to confirm all loans are made responsibly and that all mortgages sold are SUITABLE GIVEN THE CLIENTS INCOME AND CIRCUMSTANCES.

All applicants have to enter thier income and sign it as true and accurate.

In the event of repossession the Judge can ask for evidence the loan was made responsibly. A lender / broker unable to provide may find the repossession order is denied if such evidence is not forthcomming.

Check out other parts of the forum to see for yourself how serious repossession can be for people regardless of having substantial equity.

Conrad

joo - there has been much comment by the FSA as to the dubious practice of advising 2 year deals. Whilst such a short term might be suitable on occasion, for example where the client plans to move home in 2 years, in most instances a 2 year deal is VERY poor value, given you will have to pay for a new deal in 2 years time plus if you change lender you will have anthing up tp about an additinal 6 weeks in interim interest to cough up.

I tread carefully here, but in my experience it is the salesmen type brokers that arrange 2 year deals, as they get a commission earnings opportunity every 2 years.

On a £100,000 over 2 years you might only pay off about £2000 in capital, so what the heck is the point of paying interim interest and fees which could well amount to £2000 every 2 years.