Partner new self employed job during mortgage application ... What to do?

hart89

So myself and my partner are trying to buy a house, retracted our offer on one house bcos of survey. We have been approved by a lender and paid admin fee and valuation fee, they said they can carry over when we find next house.

In the meantime my partner got offered a job that he is very excited about, and he has accepted it and done training and also handed his notice in with current job. He is a hotel bartender so will still be employed by them but will go on to zero hours, so if the new job does not work out he can go back.

New job is with a productions company, they have said he will get a years service agreement with them, but will invoice them for X amount each month. I dont have much knowledge of these things but does this technically make him self employed?

We are worried now that we won't be able to get a mortgage together? He finishes work at the hotel the end of August, I know we should tell the mortgage company but I also don't want to have to rent for another ~2years until he can get approved.

What are our other options? I can get approved for the full mortgage in just my name as my salary is higher (£45k), but how does it work with deeds/contracts if he contributes half the deposit and is paying half the monthly repayments??

middleclassbutpoor

No doubt a change in circumstances such as this could impact on the mortgage application.

The new role sounds like a contractor. Who is the lender you are applying with. Is there no chance this move could be delayed until the future?

Has he any previous experience in the new role he is doing?

hart89

No they need someone to start in the new job asap, and he doesn't have any experience in this role so doubt he will get a chance like this again. He will be getting paid more in the new job than what he's on now,but I know from reading previous posts that makes no difference


What does it mean if it is a contractor situation? Our lender is the monmouthshure building society. Is there a way we could do it with just my name on the mortgage?

middleclassbutpoor

How much are you looking to borrow and how does that look as a multiple of your salary? Any debts to be considered?

hart89

My salary is ~£45k, we are looking to borrow about £180k mortgage, but that's if we have 10% deposit on a 200k house and both of us put in 5%. If he isn't on the mortgage I could borrow the other 5% from my mum as she has offered already but that means if be paying her back for a while.

Debts - I owe ~£6k on a credit card and My car finance ends in November where the final balloon payment is £6,100. I pay £228 a month for my car but aim to reduce that to under 150 by spreading remaining cost over 3-4 years. No other debts and I laid off my overdraft last year and only have a £100 overdraft now.

hart89

If there is way that we could take out the mortgage in my name but he also puts in deposit and pays monthly contributions and he is protected by some contract or deed then we may consider that.

sal_III

Inform your lender about the change of circumstance as you are obligated to do so. This will most likely result in your offer/AIP being withdrawn.

Speak with a mortgage broker explaining all your circumstances and see if (s)he can find you a Lender. Don't expect high street rates for sure, as the risk in your case is higher than the high street lenders appetite.

I'm afraid that ultimately it will boil down to a choice - new job or new house.

middleclassbutpoor

I think looking at the following

https://www.mbs-intermediaries.com/media/1099/broker-online-quick-guide-mortgage-lending-criteria-july-2018-mlc-07_18_1.pdf

- Your 4.5 x income puts you at just over £200k so with your debts, it may still be possible for you to borrow this amount on your salary alone. The criteria for zero hours and self employed are covered but doesn't specifically mention contractors.

If you have not used a broker to date in the application then I would suggest the following;

- Speak with the lender and update them on the change of circumstances.
- If they cannot continue with the application then go and see a broker who will be able to find you a lender that can. The figures look achieveable on face value but with contract workers - this is likely to be a specialist area but given that there is no previous experience in contracting or that field of expertise then this may be tricky but Im not a broker so cannot say either way.

In terms of both being on the mortgage - Im sure that should be OK because it's like a stay at home partner situation - they may not have income that can determine the affordability but they will be named on the property/deeds/mortgage - this gives the lender added security of having 2 people to chase if it all goes wrong.

You really need to just update the lender and take it one step at a time. I am sure that there is a good chance you will be fine but if not, you will have options I am sure if you consult a broker ahead of the next application.