Motgage Questions Relating to Self-Employment

CityTiger

I have a couple of mortgage related questions to try and help me plan for the future.

I have an existing mortgage that was granted to me 4 years ago when I was in full-time employment. I have since quit my job and become self-employed and at the time I checked with the mortgage company and they informed me as long as I continued to pay the mortgage my change of circumstances has no effect on it.

I am now starting to think about moving house at the end of my fixed term (next March) but I wondered how that would effect things now I am self-employed.

My self employment income is pretty low at the moment as I building things up from scratch again - its certainly not a level where I would be granted a mortgage to the same amount as the one I have - if I was granted one at all.

Does this mean I am restricted to only keeping my current mortgage with my current provider? Am I correct in thinking if I wanted to increase my mortgage amount or switch providers that I would have to be re-assessed based on current circumstances and therefore getting a mortgage now would be tough?

At the moment the mortgage is entirely in my name but as I do have a long-term partner we potentially have the option of getting a mortgage that primarily counts her income (she does have a full-time job) and my name is just on it rather than my earnings taken in to account. However, this means that again we may struggle to get a mortgage as high as we need to as her income is lower than mine was when I took out the mortgage.

Is it possible to keep my current mortgage and add my partner on to it and increase the mortgage based on her income or would my own situation have to be reassessed and a mortgage granted on that basis?

Andy advice on the options open to us would be much appreciated so we can go to the bank in a better position of knowing where we stand!

Dave_Ham

Unfortunately, your situation is actually worst than you think.

As soon as you try to move/port your mortgage, you will be re-assessed.

Therefore, it may be worth you detailing your self employed numbers and her income, purchase price etc. and someone will quickly confirm how far apart they may be.

Alternatively, sit down with a broker and run through the numbers and they can indicatively point you in the right direction quickly.

All the best

kingstreet

Same lender, or a different one, a whole new application is made when you move house and this will take into account your current circumstances.

Typically, you'll be able to add together your average net profit for the last two tax years, with your partner's gross annual salary. Deduct the annualised value of any credit commitments, maintenance, childcare etc and multiply the residue by five.

That will tell you the maximum you can borrow. Otherwise, key details into lenders' online affordability calculators and see what the results are like...

CityTiger

Not that much worse then as I did kind of suspect that may be the case although I wasnt sure and hoped a new application would not need to be made when we move.

Should be fine though, with my savings for a deposit and her income we should be able to get at least the same size mortgage as we have now - we just probably cant go any higher.