I want to self certificate - has this got harder due to credit crunch?

HairyHandofDartmoor

I and OH would like to move in 1 year's time to a bigger house, and as we are self-employed we would like to self-certificate. The main reason for this is because we would like to borrow as much as possible.

We have a large deposit (approximately £140,000 equity in our current house), and would like to borrow around £160,000. We also have a good credit history.

We have debts of around £23,000 but are planning to pay off at least £12,000 in the next year. We plan to use an independent, whole of market, no fee mortgage broker.

Does anyone one think we will be able to borrow £160,000? Any advice would be gratefully received.

herbiesjp

What are your two incomes?

Being self employed does not automatically mean self cert

AndrewSmith

Self certificate does not change the amount you can borrow or the amount you earn.

It just means that you may not be asked to prove your income by the normal means of accounts or payslips. They will still want to see bank statements etc so any overestimation of income would be likely to show.

Dan_Collins_2

You dont work for the BBC do you??

I think you may mean that your acounts do not reflect your true income. Now this is becoming a harder reason to use self cert for a few reasons. You can still Self cert but with you deposit you may not have to. We need more info to say yes or no. At your LTV self cert will be easy, but you need to have a good reason at the mo!

Dan_Collins_2

AndrewSmith wrote: »

Self certificate does not change the amount you can borrow or the amount you earn.

It just means that you may not be asked to prove your income by the normal means of accounts or payslips. They will still want to see bank statements etc so any overestimation of income would be likely to show.

Just read your post again! Self cert means self cert. Right or wrong if you self cert using a lender that wants banks states then you will walk in to trouble. There are plenty of lenders that offer a true self cert mortgage and when used correctly they are not as bad as what ppl make out.

carolt

HairyHandofDartmoor wrote: »

Does anyone one think we will be able to borrow £160,000? Any advice would be gratefully received.

Rather difficult for anyone to answer this as you haven't given your income details!

Obviously, the credit crunch hasn't wiped out self-cert, though it's reduced it, and for people with low LTV and a good credit rating, I don't see why there should be a problem...unless you are looking at a really high income multiple as well....

I can't think of a polite way to ask this, so will just have to come out and say it... do you mean a 'liar loan'? If not, please forgive me using the 'l' word....

Dan_Collins_2

carolt wrote: »

Rather difficult for anyone to answer this as you haven't given your income details!

Obviously, the credit crunch hasn't wiped out self-cert, though it's reduced it, and for people with low LTV and a good credit rating, I don't see why there should be a problem...unless you are looking at a really high income multiple as well....

I can't think of a polite way to ask this, so will just have to come out and say it... do you mean a 'liar loan'? If not, please forgive me using the 'l' word....

A little harsh, I dont do many but I have arranged maybe 4 or 5 this year, in each case I justified to my compliance team the reasons I self certed the case. Lets wait for a reply before you make a guess or maybe you should work for the BBC??

HairyHandofDartmoor

Thanks for the replies. I don't work for the BBC!

Our joint income is about £30,000 on paper, which does not sound much, but this does not really reflect our ability to repay.

It is the job of our accountants to minimize our income on paper to reduce our tax liability, so I feel that our ability to repay is greater than it would appear on paper. I'm sorry if this doesn't appear to make much sense.

I believe we can afford to pay double what we are paying now on our mortgage because we live frugally, and we have repaid £14, 500 in debt in the past 18 months, which proves we have spare income.

I don't wish to lie about our income, but what I am really looking for is a lender who doesn't care what we earn, but will lend us what we want based on having an excellent credit reputation, and a large deposit of £140, 000. After all, the risk is all ours!

Does such a lender exist?

HairyHandofDartmoor

By the way, excuse my ignorance, but what does LTV mean?

inmypocketnottheirs

HairyHandofDartmoor wrote: »

By the way, excuse my ignorance, but what does LTV mean?

LTV = Loan to value, i.e. the percentage of the loan against the value of the property.

inmypocketnottheirs

I too am in the same boat as the OP.

I self certify on the basis of what my income would be if I was on PAYE.

However I only have 10% LTV on a property currently valued at £280K, so the last time I did it on a BTL (buy to let) at 85% LTV, with my self certified income at 2X my PAYE equivalent covering both mortgages.

HTH