Second Residential Mortgage

demontfort

Hello,

I'm looking for a second residential mortgage (no BTL involved - both properties to live in), I'd appreciate any feedback as to whether this look straightforward:

Applicant 1

• Salary - 96k
• New job so 2 months into a 3 month probation
• I already own a property (This won't be sold) valued at 370k with 35k left to pay on a residential mortgage, paying 1200 per month.
• No other debt, just repaid a 15k loan and cleared my 1k credit card to help with the application.

Applicant 2

• Salary - 50k
• 1 year into a 3 year fixed term contract. Not paid by PAYE, all payments are invoiced, treated as self employed.
• No debt or property.

New Mortgage

• Looking for 392k - 22 year, 70% LTV on a freehold property valued at 560k

I'm just cautious as I've been told by one of the mortgage providers that I spoke to that the second applicants income may be ignored by the underwriters as she needs to provide 2 years worth of accounts.



Many Thanks,
DM

Caz3121

demontfort wrote: »

I'm just cautious as I've been told by one of the mortgage providers that I spoke to that the second applicants income may be ignored by the underwriters as she needs to provide 2 years worth of accounts.

different lenders will have different criteria for self employed - would probably be best dealing with a broker who would know which lenders would be suitable

ACG

The current repayment on the existing mortgage might be the stumbling block. If you can rejig that to repay it over a longer period (to reduce the repayments), it should all be fine or even apply for an extra £30-35k on the new mortgage to repay the existing one.

Also on a side note, are you aware you would need to pay higher rate stamp duty on the new property? I am guessing that will be about £35k.

demontfort

Caz -Thanks, I'm applying direct with my own bank as hopefully they can see that I'm careful with money, I'd consider a broker if this got rejected.

ACG- Thanks as well, fair points on the first mortgage but it's still in a 5 year fix until August, I'm not sure if I can change it until then but I'll phone my bank to check. I'm not sure if it matters but first mortgage is with First Direct and second mortgage will hopefully be with HSBC as I know they're part of the same group.

demontfort

Yes don't get me started on the £35k stamp

amnblog

Your own Bank may not be the right source here. Your own Bank can give you a yes with one set of options or a no.

Better to have several yes options and avoid a no.

A relatively straightforward case for a broker but it does need managing properly as there are a few curve balls.

demontfort

Thanks AMN I'll definitely consider a broker if this gets rejected by HSBC as I agree it does have a few quirks to it

Richard_Pia

Does the 2nd applicant have a history of working in a similar line of work prior to starting contracting? If so, this would help increase options. There are lenders that can consider self-employed income even with just one year's accounts.

For yourself, there are lenders that can ignore probationary periods so that shouldn't be a problem.

demontfort

Thanks Richard, yes she's worked for the same firm in two different roles for the last 3.5 years so hopefully this will show some consistency. On reflection we should be able to pull together 2 years accounts.