Remortgaging andSA302s - average or lowest

FinanciallyChallenged

Hi All,

The end of my three year fix for my mortgage is coming up late next year, so I am looking into options for remortgaging. We were first time buyers 3 years ago, so this is all new for us. We are likely to need to borrow £215k, with our house value being £400k

I'm the main earner in our household, and I'm employed full time - salary £50k. My husband is self employed and has 3+ years of SA302s. His income in the 2014-15 and 2015-16 tax years will be wildly different - £10k in 14-15 and £40k in 15-16 (probably).

We are planning a family and will likely have upcoming maternity leave, me returning to work part-time and childcare costs to consider by the time we apply for our remortgage - hence we will likely not be able to rely on my full salary being taken into account.

Does anyone know if it is standard to use average or lowest figures across the 3 years worth of SA302s? Does this vary between lenders?

It seems daft to me that, if we are deemed as not being able to afford to remortgage our house, we will be stuck on an SVR paying £300 more per month than we would be if we were accepted onto a new low rate fix. How can that be more affordable? Where's the logic!?

Thanks!

kingstreet

Most lenders take an average of the last two years if the latest year is higher, or the latest year's figure alone if it is lower than the year before.

HappyMJ

FinanciallyChallenged wrote: »

Hi All,

The end of my three year fix for my mortgage is coming up late next year, so I am looking into options for remortgaging. We were first time buyers 3 years ago, so this is all new for us. We are likely to need to borrow £215k, with our house value being £400k

I'm the main earner in our household, and I'm employed full time - salary £50k. My husband is self employed and has 3+ years of SA302s. His income in the 2014-15 and 2015-16 tax years will be wildly different - £10k in 14-15 and £40k in 15-16 (probably).

We are planning a family and will likely have upcoming maternity leave, me returning to work part-time and childcare costs to consider by the time we apply for our remortgage - hence we will likely not be able to rely on my full salary being taken into account.

Does anyone know if it is standard to use average or lowest figures across the 3 years worth of SA302s? Does this vary between lenders?

It seems daft to me that, if we are deemed as not being able to afford to remortgage our house, we will be stuck on an SVR paying £300 more per month than we would be if we were accepted onto a new low rate fix. How can that be more affordable? Where's the logic!?

Thanks!

Your income of £50k alone should be enough to secure the mortgage. Income before maternity leave is counted as it's assumed you will return to that job once maternity leave is over. I wouldn't worry about your OH's income even if none of it is taken into account you earn enough to cover the both of you for a £215k mortgage.

A mortgage broker would probably be best placed to advise you what mortgage lenders are available to you.

A remortgage with the same lender should not in most cases require an affordability check to be done again so talk to your broker and see if the lender allows that or not.

FinanciallyChallenged

Thanks for these comments.
I would be intending to go back part time so I'm not sure they would take my full salary into account. But fingers crossed!

amnblog

If you are going back part time it is part time income.

FinanciallyChallenged

amnblog wrote: »

If you are going back part time it is part time income.

Thanks, that's what I thought. Plus there will be childcare fees to consider, and the fact that we'll have a dependent. It really does change things a lot! Unfortunately we have such high early repayment charges on our fix that remortgaging sooner rather than later is not really an option.

Morgage_Confused

Customer retention product......have you asked them?

Jess716

My husband is self employed also, they took the average of his sa302's. I'm on maternity leave and returning on part time, they required a letter from my employer confirming my return date and my part time salary.

looknohands

FinanciallyChallenged wrote: »

Hi All,
His income in the 2014-15 and 2015-16 tax years will be wildly different - £10k in 14-15 and £40k in 15-16 (probably).
Thanks!

They will only take into consideration 14-15, 15-16 isn't finished yet, it's only a probably , lenders will want hard facts. For all a lender knows the business could suddenly become liable for £40k by his next accounting date and he'd be back to £0.

I'm in similar situation, earning 100% more in first 6 months of 2015 - 2016 but lender only wants to see 13-14 and 14-15. Though they have seen my bank statements for last 3 months which will show increased revenue but they'll have no idea of my expenses over the year to base this on.

In terms of affordability point I guess they will make more interest out of you on the SVR. Which covers them a bit should you not be able to afford the SVR, where as if they drop you to a better rate and then you can't afford it they loose out. Lower interest rates attract the safer customers, apparently Mark Zuckerberg has a 1% interest mortgage.

FinanciallyChallenged

Our fix ends late next year so we will have the 15-16 SA302, which is why I included the information.

FinanciallyChallenged

Morgage_Confused wrote: »

Customer retention product......have you asked them?

Do you mean the mortgage provider may let us renew our fix early if we stay with them?