Self-Cert Remortgage Problem

Saisat

I could do with some advice/information if anybody has any ideas.

We have around five more years on an interest only mortgage with Mortgage Express, the first two of which are at a fixed rate.

At the time that we took this out, we assumed that we would remortgage at some point - but the plan was never to pay off the mortgage at the end of the period it covered. Rather, we have in place a separate investment which, we hope, will cover the amount owed about ten years from now.

We self-certified and cannot get anything like the amount we will require when we remortgage without the ability to self-cert again. Which looks as though it may be impossible.

Mortgage Express want out of the business so are hardly likely to be competitive at the end of the fixed rate period and presumably will not want us at all at the end of the five years. They are willing now to waive early repayment fees, but that doesn't help if there is no new lender to move to.

Apart from the obvious - try to slowly reduce the amount owed - does anyone have any ideas how we get out of this mess? I imagine there must be a good few others in similar situations - maybe one of you found an answer?

Thanks for any thoughts you may have.

_Andy_

Self-cert wasn't there to lie about income. As you've seen, self-certs don't exist.
So - to see if changing lender is an option -

What are your gross annual incomes (assuming employed) and how much is owing on the mortgage?

brit1234

You won't be able to change lender in this situation you will have to stay on the SVR which is dangerous with the threat of raising rates or you will have to sell. If you sell you will have to do it soon as prices are coming down now.

opinions4u

What income can you prove?

How much is the "investment" worth?

Could you liquidate the investment to reduce the debt and borrow a lower amount from a mainstram lender?

We self-certified and cannot get anything like the amount we will require when we remortgage without the ability to self-cert again

Why? Has your income changed? Why did you actually need to self-certify in the first place?

property.advert

There are going to be loads of people in this position. One solution would be to look at BTL with rent at 130% plus of the interest only costs. However, if someone will lend you on a BTL and if you have that level of equity, at least 25% and perhaps a little more, I would have thought income multiples would be largely insignificant and affordability would be key.

Saisat

OK. We have a combination of reasons for the self-cert.

Firstly, let's be honest (perhaps, for a change), self-employed people try to minimise their official income to pay the minimum amount of tax. The extent to which we may consider this to be lying will vary from person to person, but it is a reality and, inevitably, it is one reason why the official income - which is all the lenders will consider - is lower than required to get the size of mortgage needed.

Second, my wife, a foreign national, has an income stream from her home country which is not taxable here but neither will the lenders we have queried take it into account.

Third, I make money on sports betting. I can assure you that this can be more secure than you might imagine if it is not your thing - but the average lender will not be enthused.

We do not have a problem keeping up payments on the existing mortgage. Only our existing bank can see the level of activity through our accounts - which supports this - but they will not take any of this into account. Only the official taxable income seems to be looked at.

The alternative investments which we put in place to come to term in ten years or so to pay off the mortgage are in their early days and would not pay off a substantial proportion of what is owed.

One is a small pension pot ( a SIPP), from which I could take 25% as a lump sum if I understand correctly, being over 55. But, as I say, this is small and that would only realise about £10,000. Given how badly this fund has been doing and the doubts I have about any stock market based investments/savings for the next few years, perhaps this is something I should do.

The main investment includes our life insurance cover and so cannot be cashed in. The good news is that it does seem to be performing OK.

The existing mortgage is for £130,000. Official income is a tenth of that. I am sure there are ways to increase the official income, but only over a period of time.

Saisat

To: property.advert

Our existing equity would have been only about 15% at the time we bought, five years ago. Exactly what it is now would I suppose depend on the property's current value. Maybe much the same as it would have gone up for maybe three years before going down? But, for sure, well below the 25% you quoted.

_Andy_

Based on what you've stated, you will not be able to change lenders at the moment.

hethmar

Speak to a broker.

property.advert

OK go look here http://www.mortgages-direct-uk.com/mortgage_lenders.htm

One solution, though drastic, is to approach a lender who will use the last year's company accounts, rather than an average etc. You can then, for one year, pay yourself a larger income.

Of course, if they want audited accounts (I do small company accounts myself for my companies) then you have that cost in addition to the extra tax you would have to pay. However, if you are declaring an income of 13k and have 15% equity, then you are stuck, simple as that.

You would have to put down another 15k or so on income and add to the equity to bring it down to at least 80%.

But with your untaxed and unreported income, your overseas income and your profitable sports betting, don't you have loads of money just sitting around ?

Wutang_2

property.advert wrote: »

OK go look here http://www.mortgages-direct-uk.com/mortgage_lenders.htm

One solution, though drastic, is to approach a lender who will use the last year's company accounts, rather than an average etc. You can then, for one year, pay yourself a larger income.

Of course, if they want audited accounts (I do small company accounts myself for my companies) then you have that cost in addition to the extra tax you would have to pay. However, if you are declaring an income of 13k and have 15% equity, then you are stuck, simple as that.

You would have to put down another 15k or so on income and add to the equity to bring it down to at least 80%.

But with your untaxed and unreported income, your overseas income and your profitable sports betting, don't you have loads of money just sitting around ?

why are you plugging that awful website?