Adding my Salary and Own Company Income Together

Silvafox

I'm coming to the end of a 3 year deal with my mortgage lender. They have offered me a better rate etc and I'm going to call them to discuss tomorrow. It is a joint mortgage at the minute but my partner and I are splitting so I want to take over the mortgage myself. I believe this is a transfer of equity.

The mortgage currently stands at £149k on a house valued around £180k. Its with Kensington and we have had adverse in the past but have not missed any payments in over 12 months and have no arrears.

My question is that I understand the lender will check affordability with me taking over the mortgage on my own and I'm unsure whether I would make it or not on an average of 3.5 times my current salary of £38,000. However, I also have my own company thats only been running about 6 months and earn money from this too. Will they take this into consideration too? Don't earn enough from it to go self cert or anything but will earn around £10,000 per year at the current rate (as am earning roughly £800 per month at minute from it). Therefore giving me a theoretical earning of £48,000 per year.

Any advice/comments? Thanks.

toonfish

It will probably be worth looking outside of Kensington. There are companies with better rates, even with adverse and some will lend you the amount you need.

brownie2

Agree with above. Most lenders go on affordability now rather than income multiples so the less you have going out, the more you are able to borrow. With this in mind if the figures add up, you could disregard the extra income altogether and enjoy it! If not then there will be some lenders who do self cert for 6 months so you should be ok.

herbiesjp

You should be able to find plenty of lenders offer you 4 times your own income.

What rates offered will depend on how good/bad your credit history is

What deal has Kensington offered?

Silvafox

herbiesjp wrote: »

You should be able to find plenty of lenders offer you 4 times your own income.

What rates offered will depend on how good/bad your credit history is

What deal has Kensington offered?

Thanks for the comments....


Well we had adverse 3 years ago, then we got in trouble 2 years ago and nearly lost the house after a suspended posession order. We then kept up payments and eventually got the arrears partly cleared and partly capitalised over 6 months ago. However we haven't missed any payments for over 12 months and things are going smoothly with them. The only problem I have that will cause a problem is a CCJ last year for £1900. I am paying this back monthly at minute, so I assume that will make a big difference.

Current deal is 8.97% variable!
New deal offered is 5.99% Fixed over 5 years or 7.2% over 2 years. 5% redemption on both in early years.

Also, I want to ask them as to possibility of further lending too to clear some old debts (such as the CCJ). To get us back on track we were paying over £1270 per month at one time! But it was worth it.

Only problem I forsee with remortgaging to another company is that there is a secured loan on the property too by welcome of all people..... doubt they'll let me remortgage without clearing them first? That's be around £20k.

So I was thinking staying with Kensington 'may' be easier so I can keep paying the new lower mortgage and then continure with the loan?

toonfish

5.99 fix looks a good deal, all things considered

Silvafox

toonfish wrote: »

5.99 fix looks a good deal, all things considered

Yeh thats what I thought to be honest. I won't know for sure until I speak to them tomorrow but I believe they've altered a few of their lending criteria and added some adverse packages to their range, so maybe I stand a better chance with them as I at least I have a history with them and have proved that I can pay! Also, staying with them saves on all the associated hassle with moving etc and I think Welcome would become a major problem in it all anyway. Welcome didn't even gain permission off Kensington to get the charge.

Just unsure whether to tell them about my business or not now if I need to ask for further borrowing? I'm hoping I can still keep to 90%LTV as when I started meaning there's a possible amount of equity in the house of around £13k, making the mortgage £162k which would still be 90%LTV of the houses value.

Would they do a credit check if I just altered my rates and stayed with them and would they do one if I asked for further borrowing?

Thanks for you time.

AndrewSmith

I would seriously consider staying and taking the 5.99% fixed deal for the following reasons:

1) Simplicity of transfering the product with the same lender
2) No exit charges to pay (not to be confused with redemption penalties)
3) Most likely no additional underwriting (unless you do decide to increase the borrowing)
4) You can keep the current Welcome secured loan as it is, with a new lender it would have to be consolidated
5) 5.99% is a fairly competative rate

They may carry out credit checks on you, I would say definately if you are increasing the loan, however as long has nothing in your situation has worsened since you originally took the mortgage then you should be fine.

Do not be talked into self certifying your second business income as this may have a loading effect on the interest rate offered. There is not need to do this as you have sufficient proveable salary, and for the case to go 'full status' they will not want to take into account income from a business only running 6 months.

Silvafox

AndrewSmith wrote: »

I would seriously consider staying and taking the 5.99% fixed deal for the following reasons:

1) Simplicity of transfering the product with the same lender
2) No exit charges to pay (not to be confused with redemption penalties)
3) Most likely no additional underwriting (unless you do decide to increase the borrowing)
4) You can keep the current Welcome secured loan as it is, with a new lender it would have to be consolidated
5) 5.99% is a fairly competative rate

They may carry out credit checks on you, I would say definately if you are increasing the loan, however as long has nothing in your situation has worsened since you originally took the mortgage then you should be fine.

Do not be talked into self certifying your second business income as this may have a loading effect on the interest rate offered. There is not need to do this as you have sufficient proveable salary, and for the case to go 'full status' they will not want to take into account income from a business only running 6 months.

Excellent advice, I will most definately stick with them I think.

Will speak to them tomorrow. I think for keeping things easy to begin with I will not ask to increase the borrowing and therefore, hopefully avoid them doing a credit check and can just alter the product for me? The only thing thats altered since 3 years ago is the CCJ from last year, so if they do check me then I hope that doesn't create a problem?

I suppose I will have to tell them about us splitting too otherwise it will be setup in the joint names again. Am trying not to overcomplicate it tomorrow and really just want to get the new rate and 'then' set about sorting the rest.

I'll update the thread after speaking to them so it helps others looking to do something similar.

Silvafox

As promised, said I'd update after speaking to them.

They always say 'honesty is the best policy'....well I wish I hadn't been honest this time....

Spoke to a lady at Kensington who went through the deal with me. She asked 5 questions about our cicumstances and the last question was 'Do you have any CCJs since the start of the mortgage?' Not knowing if they were going to credit check me or not after the questions I said 'yes' and it was last year. She said that will mean it needs to go to underwriting now. I asked her if it would of anyway and she said no! So if I'd lied then they would never have found out! So annoyed with myself now.

Anyway, it went to underwriting and they have asked me to send a letter to them explaining the CCJ and how it came about etc and amounts. I've even told Kensington I will pay off the CCJ in full to get it satisfied if that will help?! She said simply... 'maybe' and her whole attitude changed which annoyed me massively. I put this in the letter too about offering to satisfy it. So, for me being honest... I may not be offered the deal and can't afford to stay with them on the existing high rates! What a nightmare. I reckon it'll get refused now for definate.

Can't even look into remortgaging as I know Welcome will make it impossible to get a mortgage anywhere else as they will want paying in full rather than move the charge to go alongside the new lender.

Have just sent letter and am gutted...I hold little hope now.

If I knew I could remortgage with someone else I would but I think this was my only chance.

Silvafox

Think i might ring a mortgage broker up. Done a search but don't know who to approach?! Need to get some advice off someone who can be trusted in case Kensington refuse me the new rate. Anyone deal with adverse remortgages that can be trusted or recommended?