Worried incase cant get a mortgage

jackie_w

Hello There,

We've just put our house on the market, and have contacted our existing lender (A&L) to see how much money they would allow us to borrow.

They said they would lend us £180,000, but, we really need £190,000.

Husband is self employed, they said they would need to see books for the last 12 months, but, he cant provide the books, but, can supply a letter from his accountant.

Now im worried incase we cant get a mortgage. We were going to out down £60,000 deposit, and the max we would spend on a house would be £250,000.

Im so worried now, I wish I hadnt bothered putting house on the market.

Will anyone give us the £190,000 without books?

Ive arrange to see a financial advisor at the estate agent where we are selling our home, but, now im wondering if i will be wasting his time.

Jackie

UK007BullDog

Go and see him/her to find out what they are saying.

However ask them if they are a True Independent Whole of Market Broker or if they are working of a panel. If a panel how many lenders are on it. If it is a small panel 20 or less then I would not bother and go find a new one.

Depending on your max income and credit record etc you might be able to borrow more but one can just make that call with all the info you need to supply.

Is the accountant chartered? If yes then good, if no then that might be a problem.

jackie_w

Hi Bulldog,

Thank you so much for replying, Im really really worried about this now.

Husbands accountant is chartered. Last week, he told hubbie he would only need a letter for his bank/building society.

Hubbie earns £50,000 per year, I dont earn because im a housewife. Our credit rating is good, no defaults etc. Hubbie has only been self employed for about 18 months on a full time basis, before that, he was self employed on a part time basis, to build up his client base, and to get money for equipment etc, as he didnt want to get into debt for machinery etc

Someone told me about a self certificate mortgage?? Are these any good, and are they widely available. They also said they have quite a high interest rate! If self certificate is the best way forward, do they ask about outgoings etc??

Also, (sorry about all the questions), would it be better if the mortgage was in my husbands name only if im not earning, or does it have to be in joint names?

Jackie

UK007BullDog

OK here comes the answer so bear with me whilest I type and eat dinner.

UK007BullDog

jackie_w wrote:

Hi Bulldog,

Husbands accountant is chartered. Last week, he told hubbie he would only need a letter for his bank/building society.

The lender will contac the accountant and they will send him a form to fill out and sign. The lender decides what info they want. The accountant has to supply that info. A letter will probably not suffice (as anyone could write that letter and sign it, so becuase of money laundering they will contact him).

jackie_w wrote:

Hubbie earns £50,000 per year, I dont earn because im a housewife. Our credit rating is good, no defaults etc. Hubbie has only been self employed for about 18 months on a full time basis, before that, he was self employed on a part time basis, to build up his client base, and to get money for equipment etc, as he didnt want to get into debt for machinery etc.

Income looks good so just going by that you could get a 4x mortgage minus all the loans, living expenses, dependants (you, maybe kids?). However they will only lend up to 75% of the value of the property. So if the value of the house is £100,000 they will only lend up to £75,000, no matter what the income is, even if the income is very high. EDIT: there might be the odd lender that will go higher but I cannot remember name and it would cost you.

jackie_w wrote:

Someone told me about a self certificate mortgage?? Are these any good, and are they widely available. They also said they have quite a high interest rate! If self certificate is the best way forward, do they ask about outgoings etc??

Self cert is the one you would be getting as you are only trading for 18 months. Yes they are more expensive but not too bad. It depends on property type and also your credit record. There are a number of self certs, there is the one where they ask for details of incomings and outgoings, even though its self cert. And then there is the true self cert were they do not ask for anything, however you pay for the priviledge.

jackie_w wrote:

Also, (sorry about all the questions), would it be better if the mortgage was in my husbands name only if im not earning, or does it have to be in joint names? Jackie

Best is always joint names. 1. if something happens to him (or you) you have access to the mortgage and do not need a solicitor to access the mortgage. 2. if you split up you can prove that you were party to the mortgage (saves a lot of headache).

Really do not stress yourself out over this. Contact a couple of brokers and see what offers they can give you with other lenders. Then come back on here if not sure and ask us what we think. Make sure when you go to more than one broker that you look for the same loan amount so that you can compare like with like.


If you go for the true self cert PLEASE PLEASE PLEASE make sure you can still meet the monthly payments. I see too many people going self cert because they fell in love with the new property but then start to struggle with the monthly payments as it was just too high.

jackie_w

Many many thanks for your reply Bulldog, I really do appreciate it.

I promise, by going for a self cert mortgage, I will ensure that I can afford the payments. We can afford about £1200 per month for the mortgage alone.
We dont really have alot of debt, maybe about £8500 in total (excl mortgage), hubbie works really really hard, and has a good head on his shoulders., but, thank you for your concern.

If its okay with you, I will get back to you and let you know what advice I am given by the financial advisor and I will definetly check to see if they look at the whole market.

Jackie

UK007BullDog

Make sure he/she is a mortgage broker.

Mortgage brokers = all they do is mortgages and know their stuff.

Financial Advisers = do more investments etc. and not as much mortgages (the ones to see if you want investment, tax planing, income planning, protection packages etc. advice)

herbiesjp

jackie_w wrote:

Hi Bulldog,

Thank you so much for replying, Im really really worried about this now.

Husbands accountant is chartered. Last week, he told hubbie he would only need a letter for his bank/building society.

Hubbie earns £50,000 per year, I dont earn because im a housewife. Our credit rating is good, no defaults etc. Hubbie has only been self employed for about 18 months on a full time basis, before that, he was self employed on a part time basis, to build up his client base, and to get money for equipment etc, as he didnt want to get into debt for machinery etc

Someone told me about a self certificate mortgage?? Are these any good, and are they widely available. They also said they have quite a high interest rate! If self certificate is the best way forward, do they ask about outgoings etc??

Also, (sorry about all the questions), would it be better if the mortgage was in my husbands name only if im not earning, or does it have to be in joint names?

Jackie

If your hubby earns £50k per year and has accounts for the last year (as been trading 18 months) there are lenders that could look at this for you on normal mortgage deals without having to self cert.

The benefit of this would be to get the lower standard rates as opposed to self cert rates

HTH

jackie_w

Hi Bulldog,

Went to Mortgage Advisor (wasnt a financial advisor as I originally thought), he checked through the whole market (he gave me a letter stating this).

He gave me a quote for a self cert mortgage first of all, then he checked the "normal" market. I gave him all the details of my husbands income. Basically, 2006/07, his companies turnover was £225,000. Net profit before tax was £85,000, therfore his share was £42,500. I told him that Jan & Feb this year, turnover for hubbies company was £100,000, (they are hoping to have a turnover of £500,000). He checked the figures, put everything through the computer, and he got the Gloucester & Cheltenham building society to quote, so, he gave them a phone, and they said, they would go on one years accounts, and they would ask the accountant to give a projection for 2007/2008. He said he could have contacted Gloucester & Cheltenham for a principle application, but, he said there really wasnt any point unless there was a problem with either of our credit ratings (which there isnt).

So, everything looks okay (although, I will still worry until this is all settled, cos im a born worrier lol).

Anyway, thank you so much for your advise, I really do appreciate it, and, we can afford the payments on either of the mortgages that he quoted to us.

Only downfall from switching mortgages is, I have to pay Alliance & Leicester £1480 to leave them.

Jackie

herbiesjp

Can you not port your current deal and top up with one of their offerings at the moment.

I think you should look at this option in order to make sure you have got the most cost effective deal, and avoid paying the penalty fee if yu do not have to

HTH

luckyfool

Herbiesjp.

The first post in the thread advised that Alliance and Leicester have declined to lend them the full amount required so it doesnt look like this option is a goer.