Help please with self cert mortgage.

dragon62

My situation is that I want to buy a house for 145k and need a self cert mortgage for 30k.I will have 115k to use as a deposit.
I have been self employed for 1 month,prior to this I have been in receipt of incapacity benefit for 4 years.I have (and am still) been receiving dla at middle rate for 3 years.The dla and my self employed earnings are my only income.
Before my illness I was self employed for 8 years.
I have a good credit history,with no credit card to pay and no missed mortgage payments.
I have no trading history,bank statements and will need to self certify this.
The problem is my current lender will only look at 1 year + self employed applications and my mortgage is no longer portable.
Could someone please give me some pointers as to who I should approach for this type of mortgage,if I would get penalised heavily on it,if I am able to approach any "specialist lenders" myself,if I can get a mortgage that I need without having to pay a large broker fee and taking my circumstances into account what sort of deals could be possible?
Thank you very much in advance for any advice.

homer_j_3

First thing is first.. YOU DO NOT HAVE TO PAY LARGE BROKER FEES! Do not get taken in by all these adverts that are sympathetic to your fears.

Read Martins guide. Get yourself to a fee free mortgage adviser, one that has access to the whole of market is suggested. If you do this they will have access to lenders that may be able to help that dont normally take business from customers directly.

Your options may be narrowed down due to your circumstances which means that you trying to source a lender yourself could be very hit and miss and your good credit history becoming bad because of loads of credit checks.

dragon62

Its good news to hear about the "brokers fees",phone and ask seems one way to go here.

I hear what you say ref the advisers have full access to the market and yes of course that makes sense.

When you spoke of "Your options may be narrowed down due to your circumstances" in the reply,did you mean that this is the case with the advisers too ?

I guess what I'm trying to say here is,deals for my circumstances do exist don't they ? Am just hoping they are'nt too high over the normal rates.

Again,thank you very much.

homer_j_3

i meant with the lenders that you approach - think of a triangle. At the bottom are all your lenders that accept employed people with good credit and a deposit - right at the peak of the triangle are the people that have been bankrupt and then you have all the other considerations in between. There hopefully will be a handful of lenders able to help.

JoeK_3

dragon62 wrote: »

My situation is that I want to buy a house for 145k and need a self cert mortgage for 30k.I will have 115k to use as a deposit.
I have been self employed for 1 month,prior to this I have been in receipt of incapacity benefit for 4 years.I have (and am still) been receiving dla at middle rate for 3 years.The dla and my self employed earnings are my only income.
Before my illness I was self employed for 8 years.
I have a good credit history,with no credit card to pay and no missed mortgage payments.
I have no trading history,bank statements and will need to self certify this.
The problem is my current lender will only look at 1 year + self employed applications and my mortgage is no longer portable.
Could someone please give me some pointers as to who I should approach for this type of mortgage,if I would get penalised heavily on it,if I am able to approach any "specialist lenders" myself,if I can get a mortgage that I need without having to pay a large broker fee and taking my circumstances into account what sort of deals could be possible?
Thank you very much in advance for any advice.

A classic self cert case. A mortgage loan is fee sensitive below £57,000 and rate sensitive above.

Your mortgage is only small and would be sensitive to charges such as valuation fee, legal fees, arrangement fees etc. but looking at your case it seems straight forward and most of the high street lenders would fit if you knew how to apply.

Get your self a good fixed rate


JoeK

dragon62

Thank you JoeK , that sounds okay,I understand what you are saying ref sensitivity.

I only need this 30k for 10 years on an interest only basis,will have then have the capital to be able to pay.

Seems I need to look for a fee free mortgage adviser as mentioned by homer_j ( phone and phone again) and then look for that "good fixed rate".

Am learning and taking it onboard.

Thank you.

homer_j_3

dont look for people that advertise as specialists in self employed etc as they will normally charge as they try and con you erm I mean justify that your case is only worth touching if you pay them because the commission paid by the lender just doesnt fill their pockets enough!

herbiesjp

dragon62 wrote: »

Thank you JoeK , that sounds okay,I understand what you are saying ref sensitivity.

I only need this 30k for 10 years on an interest only basis,will have then have the capital to be able to pay.

Seems I need to look for a fee free mortgage adviser as mentioned by homer_j ( phone and phone again) and then look for that "good fixed rate".

Am learning and taking it onboard.

Thank you.

You could go to your current bank and see if they can help, as they will have a track record of your account conduct etc.

Otherwise, there are not many lenders that will offer day1 self cert deals - a lot will want you to have been trading for at least 12 months

Going on the low mortgage amount you are looking for you should be ok - although you have not said what your income is.

HTH

dragon62

Thank you herbiesjp for that.

My own bank I feel would not be interested,they were not around 8 years ago when we asked then,despite no blemishes on my record,I think it was just a self employed thing with them.

Month 1 is where I find myself with earnings of at least 15k net expected,it sounds like I certainly do need specialist help here.

Thanks again.

JoeK_3

homer_j wrote: »

dont look for people that advertise as specialists in self employed etc as they will normally charge as they try and con you erm I mean justify that your case is only worth touching if you pay them because the commission paid by the lender just doesnt fill their pockets enough!

Sorry Homer but for once I have to disagree with you on the point of a fee charging and non fee-charging broker.

As I indicated higher up the thread, a mortgage loan is sensitive to fees below £57,000 and in this case a non fee-charging broker would be the most suitable. Any loan above this figure becomes rate sensitive and as a consequence the cheapest rate has to be found and arranged.

This is where a fee-charging broker would be the best alternative.

Let me explain. A broker who is working for a procuration fee ( a fee that is paid by the lender) would only arrange mortgages from fee-paying lenders. Now we in the industry know that there are lots of lenders out there that do not pay a procuration fee to a mortgage adviser but usually, they have the best and lowest rates.

As the client pays the fee-payed broker he will consider these lenders for the right reason (the procuration fee adviser would not) and as a consequence the client is better off.

JoeK