Meeting Affordability Tests

Freeranger

Hi! We are currently considering moving and would like to port our very favourable base rate tracker mortgage. We will be using one (my) salary to prove income and based on our existing income and expenditure will be able to demonstrate affordability.

There is a possibility that I may be made redundant during the process of moving/ selling - although this isn't certain. Are there any issues (legal or otherwise) associated with obtaining a mortgage (assuming a successful application) which is based on an income that is subsequently removed. I.e. would we be required to declare any change in our situation to the lender? We have other self employed income so could continue to pay the mortgage without difficulty (the accounts from our self employed income would not suffice for a lender hence using current payslips for the affordability test).

View/ suggestions welcome. Thanks.

herbiesjp

You have to show affordability based on the lenders' criteria - not on how you want to verify it.

Also, any material change in circumstances do need to be communicated to the lender.

Freeranger

Ok thanks - it was the changing circumstances bit I was most interested in. Seem the onus is on the borrower to communicate this though, as I know plenty of people who have changed jobs/ had jobless periods etc but carried on paying their mortgages and not informed the lender of any change. Also can't find anything in the lenders terms and conditions that specifically refers to this point other than the catchall 'your home is at risk...' line.

beecher2

If you ask your lender for permission to port, you will be re-assessed and will have to tell them of the redundancy threat. Your position is different from people who have changed jobs while in the middle of a deal.

Freeranger

Thanks, have discussed reassessment with lender. They require payslips etc, which of course at this stage I can still provide. What I'm getting at here is the morality and/ or potential legal issues regarding the evidence you provide. The redundancy threat - is just that (i.e only a threat) and may not happen. I.e you could jeopardise the reassessment process by introducing an issue that doesn't materialise.

Thanks again for thoughts.

kingstreet

If you are made redundant at any point before completion, you must inform the lender immediately. It will be confirmed in your mortgage offer.

Freeranger

Thanks that's helpful, appreciate the reply.