remortgage - newly self employed...?

Robbo33

hiya, at the end of december myself and my partner are due for a remortgage. I finish being employed in december, and will be self employed from january. I have bought a franchise, which means I guess i can 'prove' the potential earnings by asking the parent company to provide figures from previous financial years for my region which are very healthy indeed. The facts:

• My partner is employed.
• We both have excellent credit ratings.
• The LTV will be between 33% and 60%, (possibly up to 65%) as we may want to borrow more and extend the house.

How do mortgage lenders view this kind of situation....? Can i apply whilst still employed, and provide details of earnings over last 3 months etc as you normally do, and let the lender make their decisions etc based on this, or do i have to declare that i am going to be self employed come january, when technically the deal would be signed and sealed already...? If that makes sense!

Any advice would be massively appreciated, thanks

amnblog

This does not work for lenders.

How previous franchisees managed a patch is no indication of how you will.

If you wait until you are self employed you will need a minimum one years trading figures for any remortgage options.

Thrugelmir

Robbo33 wrote: »

I have bought a franchise, which means I guess i can 'prove' the potential earnings by asking the parent company to provide figures from previous financial years for my region which are very healthy indeed.

Doesn't prove anything. It was another persons business.

kingstreet

Do you want a remortgage, or are you planning to ask your current lender for a customer retention product?

If the latter you may find there are no checks on your employment if going via website or "non-advised" route.

Robbo33

thanks guys,i thought that would be the case. So i reckon i can apply as normal,use oct,nov and dec payslips,fine and dandy?

i don't know about customer retention products so i will investigate. i do all the searching and applying myself rather than pay an ifa because its usually so straightforward.

lenders wouldn't be able to find out that i became self employed straight after i signed up will they...? Unless i default of course which i have no intention of doing!

Yorkie1

As you know that you will no longer be 'employed' shortly, this is a material fact that should be disclosed if you change lender, or take a new product out with your current lender after going through the full underwriting process (i.e. if you can't swap products online, and/or are changing anything about your mortgage term or amount).

But, as another poster says, if you are just changing product with your current lender and doing so online, there are no questions asked usually, and thus nothing to declare.

Robbo33

right. Hmm. Ok well we do want to change term and amount and most probably lender so i guess we're scr3wed then!! Might see about my partner getting it in his name only for a couple of years,put plans to extend on hold until i have accounts to show.

thanks everyone,much appreciated.

Yorkie1

Do you have to change term and/or amount right now? An alternative might be to go for an unchanged (say) 2-year fix or tracker with your current lender, then look to change the details when you've got some more accounts behind you?

Thrugelmir

Robbo33 wrote: »

rMight see about my partner getting it in his name only for a couple of years,

Then you've the complexity of gifting the equity. As will have to declare that you've no financial interest in the property.

kingstreet

Robbo33 wrote: »

we do want to change term and amount

Borrowing more? For what purpose?

Robbo33

good shout,certainly an option. Think the current plan after reading lots of mse blogs and forumite's comments,we will probably get the mortgage in both names but using my partners income only,same amount but a 4 yr fix (2.59%) over 25 yes and overpay as much as we can,we can get £61k down to about £39k at the end of 4 yrs by this method,by overpaying by about £200 a month. Seems pretty good!

thanks for your input ;-)