Do I Have To Let Mortgage Company Know If Changing To Self Employed?

livingfrugally

Hi

I've been reading on here for a while now and people give really great advice so I'm hoping someone can help me. My husband and I have had a fixed rate mortgage now for 4 years and have never missed a payment or had a change in circumstances. However my husband now wants to follow his dream of becoming self employed. He is confident he can make at least what he was making before doing this and I am confident he can too. We live in a shoe box with a fairly low monthly mortgage so we can actually "survive" on just my wages if needs be, but I know it wouldn't never come to that. If anything didn't work out he would get 'any' work rather than see us go short.

My question is this. Is this something we have to let our mortgage company know if it is not going to affect them? And if we do and they don't like it will we run into problems? Also, is this something they will find out anyway when our fixed rate term is up next year? Is that automatically reissued or do they check our tax code etc? Can they just say they are not going to issue another rate and we would have to pay the remaining balance?! I've never heard of that before but I'm a bit of a worrier!

I'm a bit naive when it comes to mortgages so any help would be great. It's playing on my mind a lot at the moment.

Thanks

sulphate

Hi, we are in a similar position.

It's my understanding that:

- as long as you can still keep up repayments they are not interested in what job you have.
- the only time this might change is if you want to move to another fixed rate, as you say you will be doing this next year so they may want proof of income again. However I am not too sure on this - I think it may depend on the lender
- if you don't "qualify" for a fixed rate you will simply move on to their SVR (which is higher... ironic)

Our fixed rate is ending next summer and I will probably be on maternity leave by then as well. :eek:

livingfrugally

I kind of assumed that if we kept up repayments they wouldn't be fussed. We haven't changed providers yet as we had a high original rate as FTB's then it dropped significantly so we stayed put. They never ask us anything about our financial position, they just sent us a letter with their new offer. Does anyone know if this is automatically generated or whether they do 'checks' before they send these out?

I don't mind if we have to go onto a SVR as the rate is probably better than what we're on now (!) I'm just one of those people thats prefers a fixed amount going out if I can.

Thanks

Mortgage_Mark_2

Nope, no need to tell them.

The only time you'll need to is when/if you come to remortgage.

livingfrugally

So next year when they send us a new rate, they don't usually ask us anything, they just ask us if we want to carry on with them. Will it only make a difference if we want to change providers?

What difference will it make if we stay with nationwide and don't change? Or if we do want to change? Will it change the rate we're on. Can Nationwide decide they don't want to renew and we'd have to find someone else?!

Sorry for all the questions. Just want to know where we stand and I'm a bit of a worrier.

Thanks

livingfrugally

Mortgage_Mark wrote: »

Nope, no need to tell them.

The only time you'll need to is when/if you come to remortgage.

Does that mean when the new rate comes through, or is that if we wanted to move or ask for more money?

Thanks:)

kingstreet

You will have to disclose your self-employment if;-

you move house and require a new mortgage

you remortgage to a new lender while remaining in your current property.

You may be subject to an affordability calculation and proof of income when taking a customer retention product from your existing lender. That is at the lender's discretion.

We have no evidence yet that Nationwide is doing this under the MMR requirements.

densol_2

livingfrugally wrote: »

So next year when they send us a new rate, they don't usually ask us anything, they just ask us if we want to carry on with them. Will it only make a difference if we want to change providers?

What difference will it make if we stay with nationwide and don't change? Or if we do want to change? Will it change the rate we're on. Can Nationwide decide they don't want to renew and we'd have to find someone else?!

Sorry for all the questions. Just want to know where we stand and I'm a bit of a worrier.

Thanks

You can change rates THREE months before the fixed rate ends with Nationwide online - no questions about affordability as long as your account is in order etc. I just did mine for the next three years with a great rate of 2.39% for three years :-) ( LTV 50%) .... If you change lenders, want to borrow more or amend term - MMR kicks in and questions about affordability will be asked.

Mortgage_Mark_2

kingstreet wrote: »

You will have to disclose your self-employment if;-

you move house and require a new mortgage

you remortgage to a new lender while remaining in your current property.

You may be subject to an affordability calculation and proof of income when taking a customer retention product from your existing lender. That is at the lender's discretion.

We have no evidence yet that Nationwide is doing this under the MMR requirements.

^ What he said. Summed up better than I could.

kingstreet

Except I missed a bit, which densol kindly reminded me about.

You will have to disclose your self-employment if;-

you want to borrow more money from your current lender

you move house and require a new mortgage

you remortgage to a new lender while remaining in your current property.

You may be subject to an affordability calculation and proof of income when taking a customer retention product from your existing lender. That is at the lender's discretion.

We have no evidence yet that Nationwide is doing this under the MMR requirements.

livingfrugally

Thanks everyone, much appreciated.