Self Cert

ForkHandles_2

Hi

I moved house just over a year ago on a self cert 2 year fixed with HBOS. The fixed interest rate will revert back to SVR in January 2008.

I found the mortgage through a broker originally at an 80% LTV. Very soon after I moved my circumstances changed and I'm now earning under half of what I was when I applied, if I were to apply for the mortgage now I'm certain I would not be successful.

I have never missed or been late on a payment, in fact I've been overpaying and I believe I have an excellent credit rating.

In November I will need to start looking to re-mortgage and will have a LTV of about 70%. My problem is that if I were to apply for a 'normal' mortgage I would only be offered roughly slightly more than half of what I need which is just over 300k.

What do lenders do in cases like these where an applicant's situation has changed but they need to re-mortgage, as I say I've been the perfect borrower, not only in this mortgage but over the previous 12 years.

What would be my best approach in November, ring my current lender and negotiate a switch (but not get the best rate from the whole market), contact my broker again or walk into a lenders branch armed with my mortgage and bank statements?

Many thanks,


ForkHandles

toonfish

It's difficult without knowing exact figures, but the low loan to value is in your favour. Always see what the current lender will do first but there are some high income multiples available, even on self cert. Another option is to go for a lender where you declare affordability, rather than income.

herbiesjp

Indeed - income multiples and affordability calculators have become far more complex over the last couple of years and you may be surprised and what a "standard" lender could look to offer yuo based on your income.

Best bet is to go to a fee free whole of market adviser

HTH

ForkHandles_2

Hi thanks for your views.

Basically when I took the mortgage out I think that I simply declared affordability, to be honest I left it up to my mortgage advisor. The outstanding balance in December will be about 311k, my house is currently worth in the region of 440k.
My income is made up from a basic salary plus a car allowance approx 42k. So you can see if I went the conventional route I may experience a few problems. As I said though, never been late on any payments for anything in about 12 years.

As I was desperate for the house at the time I sort of left it in the hands of my advisor, I don't think the rate at the time was the best around but I knew it was affordable. I know, I know, but it was before I found the MSE website.

Is it the case where you declare affordability you generally don't get the best rate?

Cheers

ForkHandles

Conrad

There is a problem often overlooked by advisros as follows;

1) you make an application based on £42k but get declined as the affordability model does not allow sufficient borrowing
2) you try elsewhere but find your income is too short
3) you artificially increase your income
4) lenders communicate with one another and the disparity is revealed
5) you get put on a watch list which means you cant remo at all

Just something to keep in mind.

Conrad

ForkHandles wrote: »

Is it the case where you declare affordability you generally don't get the best rate?


ForkHandles

Fork, you still have to insert an income figure in the application. Affordability model simply means the lender doesnt use income multiples (such as 3 x income). Instead they work out how much they can lend based on a complex calculation know only to them but which still needs an income figure as the starting point.


People obviously lie about income however this is getting dangerous. I have heard a copy of all self - cert applications above £40000 income are being sent to the Inland Revenue as a matter of course!!!!!!!!

Also watch out for the many muppet advisors that recommend 'fasttrack' as an alternative to self cert. Such a system is operated by many high street lenders including Halifax and N Rock.
THE PROBLEM IS ON THE FAST TRACK APPLICATIONS THE LENDERS SPOT CHECK INCOMES AFTER COMPLETION!!!!!!!

toonfish

Conrad wrote: »

There is a problem often overlooked by advisros as follows;

1) you make an application based on £42k but get declined as the affordability model does not allow sufficient borrowing
2) you try elsewhere but find your income is too short
3) you artificially increase your income
4) lenders communicate with one another and the disparity is revealed
5) you get put on a watch list which means you cant remo at all

Just something to keep in mind.

how is that "often overlooked by advisers"?

toonfish

Conrad wrote: »

Fork, you still have to insert an income figure in the application.

no you don't

Conrad wrote: »

I have heard a copy of all self - cert applications above £40000 income are being sent to the Inland Revenue as a matter of course!!!!!!!!.

what about the data protection act?

Conrad wrote: »

Also watch out for the many muppet advisors that recommend 'fasttrack' as an alternative to self cert. Such a system is operated by many high street lenders including Halifax and N Rock.
THE PROBLEM IS ON THE FAST TRACK APPLICATIONS THE LENDERS SPOT CHECK INCOMES AFTER COMPLETION!!!!!!!

Also watch out for "undercover" advisers talking about a market they are obviously not clued up on.

ForkHandles_2

Crikey, now i'm worried!!

So really my only option is to stay with my current lender until either my salary increases or until I've paid off enough to qualify for the amount i need to borrow. Which means I pay the SVR until that time, which to be honest I would find very difficult.

ForkHandles

Conrad

toonfish wrote: »

no you don't

Which lender do you not have to give an income figure to please?

toonfish

you do not need to "make up an income" as stated above, simply state that the repayments are affordable. If your lender doesn't offer you a suitable rate, then go and see an experienced adviser - explain the situation and take their advice - it's what we do every day.