Self Cert or not?

Sally-Ann_5

Will try and keep this brief!

My OH and I are trying to get a mortgage together after selling 2 properties that were owned with ex's. He has 1 mortgage arrears that happened earlier this year after Woolwich and Barclays merged accounts. He paid into wrong account, they didnt tell him, he got registered as being in arrears, even though he had actually paid! Second complication is he is self employed and his company has only been up and running for about 6 months.

I am in a permanent post, been there 7 years, no complications... although apparently with one company I have a clear credit record and with another have a low rating (apparently- this is the verdict of 2 different IFAs). So Im not sure where I stand on that.

We have 2 IFAs on the go:

1. Says we can only get a sub prime at 7.5% and would need to be in joint names

2. Says if I self certify and I declare earnings of 4k above my salary (which is actually possible as I do undertake consultancy and have earned an extra 2k this month) then we would be paying £150 a month less on about a 5.4% interest rate.

Having read about self certs being dodgy in some respects, I am concerned. Not only cos it will all be in my name, but also I am aware of being totally naive and could get stitched up and wouldnt know.

Anyone got any thoughts/advice on the matter?

Lizzy

Well I would go for option 2. at 5.4% but ONLY IF THIS IS A FIXED RATE. If you have read any of the threads on here about variable sub prime rates you just would not do it........
http://forums.moneysavingexpert.com/showthread.html?t=563588


If the 7.5% is fixed it may be worth considering if you can afford it because at least you will know where you are. I would only fix it for a couple of years but thats up to you and if you think the rates will drop or increase.

If a mortgage defaults in a joint names and you and you partner separate they will come after both of you for the payment. If it is just in your name he could walk away and leave you to it. Then expect half when you have to sell it. You will have the black mark on your file not his.

Can't Barclay's remove the arrears mark under the circumstances ?

You can get Sub Prime mortgages (bad credit)

Self Cert mortgages (good credit)

Or Sub Prime, Self Cert which seems to be the band you are in if buying with your partner and this is going to cost you.

Good Luck

Lizzy

PS I can't really see that 1 paid mortgage arrears would put you into the sub prime band.

Ask around on here for the name of a good self cert lender and approach them yourself. Your brokers could just be going with the ones who are going to pay him/her the most. Also get a copy of both your credit reports and see for youself whats on there. Equifax do one instantly for about £13 online or you can send £2 off for one. Credit Expert will also give one online free but they want you to subscribe monthly to it.
Get a feel for whats out there yourself and you might be suprised at what you can do yourself.

If you need help reading you file post the details. People on here are brill, there are experts on all sorts of things, mortgages, debt, holidays, bargains, even cake making.

herbiesjp

What figures are you looking at?

Purchase price? Deposit?
Your PAYE income? Any extra income?

Sally-Ann_5

House is £190k, deposit is £34k

I earn a flat salary of 31k, with an additional 2k this month and in the past 24 months, about an additional 5k being declared.

herbiesjp

This should be straightforward high street rates - not sure why you would need to look at self cert

Sally-Ann_5

Really?!

I think it's because I have commitments in the form of credit cards 5k and a loan of 3k. Both advisers have told me standard lenders wouldnt lend me what we need.

We have a joint mortgage in principle with one lender: quote from adviser's email:

Platform have filtered your application to their 'almost prime' 2 year fixed rate at 7.54%

Im worried if I keep going to different lenders/advisers it will affect my credit score, but if you are saying I should be ok with a normal lender I really should be pursing this! Would we be better off paying off my debts and putting down less deposit? I cant seem to find an adviser to truly look at all the options for me.

Dan_Collins_2

Sally-Ann wrote: »

Really?!

I think it's because I have commitments in the form of credit cards 5k and a loan of 3k. Both advisers have told me standard lenders wouldnt lend me what we need.

We have a joint mortgage in principle with one lender: quote from adviser's email:



Im worried if I keep going to different lenders/advisers it will affect my credit score, but if you are saying I should be ok with a normal lender I really should be pursing this! Would we be better off paying off my debts and putting down less deposit? I cant seem to find an adviser to truly look at all the options for me.

In the current market arears could make you sub prime. Also 5.4 sub prime or not is currently very good. If it is fixed the admin fee will be very high so check, if its variable and linked to the base rate then you may be ok.

I doubt you will get the mark moved. Remember lenders are worried about being exposed to sub prime clients after buying books from lenders based on the potential money they could make!

If you do earn that income but cant prove then self cert is fine, thats why it exists! UCB normally have some good rates but 5.4% is very good.

Different lenders score in different ways, Northern Rock use experien and use the info on the report, other lenders take the score and add to their own score system.

Good luck