Help on Porting - Low Income Self Employed

lcky12

Looking for some advice on whether I will be able to port my mortgage or get a new mortgage. Apologies for the length of this mail.

We are looking to move house. We have accepted an offer of £190k (which equates to the valuation of our current property) for our house and have had a bid of £155k accepted for a house with a valuation of £175k.

Our existing mortgage is Interest Only for £78k (we have other savings in place to allow this amount to be repaid at the end of the term) and has a remaining term of 9 years. We are both self employed having started a new business four years ago. After two years of losses we turned a small profit of approx £4k each of the last two years and are entitled to working tax credits. We live within our means and have good credit ratings. We have never defaulted on any payments and have no current loans.

We want to reduce our mortgage to £70k or £65k and perhaps naively thought that because we wanted to reduce our borrowings and would have a low LTV of around 42% that our current lender would see this as a lower risk and approve the port of the mortgage.

The property we hope to buy needs modernisation so we wanted to keep some equity from our sale to help fund this but if necessary we could drop our new mortgaged requirement to £53k.

Unfortunately it appears porting a mortgage is classed as applying for a new mortgage and we are having problems with our lender. They haven't said no yet, but they haven't said yes either. We are comfortable with our ability to pay this mortgage even if it meant taking p/t employment as well as growing our business.

Any words of wisdom would be appreciated ! Would a morgage broker be able to find alternatives ?

poacherp

Sounds like you're going to have a problem if your earned income is only £4,000 pa each. Best way forward is perhaps to seek advice from a mortgage adviser or IFA and provide full details of income from all sources. Most mortgage lenders will not take tax credits into consideration but you could look at TMW which is part of the Nationwide.

Thrugelmir

With a profit of only £4k from your business. Then presumably you are living on savings.

Porting merely refers to the transfer of the terms of the mortgage i.e. interest rate, not the mortgage itself. This in itself is treated as a new application.

_Andy_

On that income it will be a straight decline.