Mortgage protection possible with 2nd income?

NewAndConfused

Hi,

I'm in the process of buying a property, and all is going well. I had planned on getting mortgage payment protection, as I'm a single buyer and this seemed a sensible means of preventing disaster if I unexpectedly lost my job.

I'd shortlisted some of the best (as recommended on MSE) and thought it would all be plain sailing. However, I've encountered an issue which now throws the possibility of cover into doubt.

My mortgage will be paid for from my regular PAYE job. If I was to lose this, my guaranteed income drops to zero. However, over the past few years I've earned 'casual' money outside of my PAYE by freelancing. This is classed as self-employed, and I (or rather my accountant) submit a self-assessment form at the appropriate time each year.

The amount I earn freelancing outside of my PAYE varies considerably. The first year, it was just under £2000 in total. The current year, nearly £10,000. Next year, it could easily be zero.

Unfortunately, as far as mortgage payment protection is concerned, if I lost my PAYE job (which is paying the mortgage), I'm still self-employed and when I phoned to enquire, they said the "underwriters would give it consideration" but they might not cover me.

I can understand where they're coming from, as I have *the ability* to earn lots of money that would cover the mortgage. Its just, in reality, I know I won't and would be in serious trouble (likely I'd have to sell the house pronto to avoid ruin).

Any advise as to how I could get some form of protection?

I wondered if I agreed some sort of 'earnings cap' with the protection company, so they knew I wouldn't have much coming in via self employment?

The other option, which seems ridiculous, is to stop earning via freelance, declare I'm no longer earning via self employment with HMRC and then I'd be able to get full mortgage protection. But this seems akin to some sort of benefits trap where it's better to stay poor than work! Surely there's an alternative?

Any help or advise in this area really appreciated as I suspect I'm going to have trouble sleeping knowing there's no real safety blanket (and yes, I do have savings but not enough to live off for a year with a mortgage sadly).

Thanks,

Mike

jonesMUFCforever

If for instance you were incapacitated in such a way that you could not work - surely you could not freelance either??