Barclays AIP vs Mortgage offer

Monica27

We have been wanting to up move & finally felt we were doing well in terms of job stability, finances- kids settled in school etc- so we approached our current mortgage providers Barclays to get an idea of what we could afford.
My partner is full time employed & he also does additional work where his pay is classed as self employed - this is essentially another permanent form of employment. I work 2 days a week at current & can easily increase work if needed as kids already in full time school & already have plans to do this after this summer.
Anyway when we approached them they were least interested, asking us to first accept offer on our House, then have our offer accepted & then only ring them- we asked if they could help us to get an estimate of how much we could borrow & they said go by AIP !
So AIP, putting our house on market, putting offers & losing some in a very competitive market in a desirable location- we finally had offer accepted!
With our AIP it was 85% LTV, though we could afford 80% LTV we were hoping to keep some for home improvements.
Go back to bank- finally given an mortgage appointment- mortgage offer is only 60% LTV- because you guessed it right- less than 2 years full tax records for self employed section 😔
Our house is sold STC & we have already incurred survey costs- unfortunately we don’t have much equity having bought at top of market just before credit crunch & it’s only in last 3 years that our incomes have gone up- we wanted to live a little after a few rough years as we knew once we had a big mortgage we couldn’t do big family holidays etc.
So looks like we will have to lose our dream house. Is it worth complaining/ appealing for being misguided by them on initial calls?
Is it worth going to anyone else with this as we won’t have 2 years tax records for self employed part of his employment till April 2020
Haven’t rented in years & Worry about getting stuck in rentals if market slows down and no properties come up after Brexit. The area we were hoping to move to hardly has any properties come up anyway & if the prices crash people will less inclined to down size & move.... unfortunately there is a big jump in property prices from our current house to where we desire to move to so unless we could look at that range of properties there is no point in moving...
Feel let down by the whole experience, but having had 30 viewings, some really low cheeky offers & one potential buyer withdrawing offer we don’t want to let this sale fall through & go back to square one again...

Monica27

Am new to this forums, so apologies if this is the wrong place to post this...

muhandis

In your place I would talk to a whole of market broker on Monday. With your status as it is (found offered accepted), a good broker will very quickly tell you whether this is doable or not based on your particular circumstances.

The only mistake you made was putting all your eggs in the Barclays basket.

Good luck!

LRmortgage

As Muhandis says, there could be options with only 1 years self employment figures.

See a decent broker and see if they think it can be placed.

Monica27

Thank you both for replying. We have contacted a broker & even provided accountants projected net income letter for this year.
We had our mortgage for this house before credit crunch, before having kids so kind of have been naive to all the new criteria. We both have excellent credit rating, no h/o defaults, and other than current mortgage only have a small amount left to pay on personal loan which I took 2 yrs ago for a car- am able to pay straight away but thought won’t to unnecessarily incur early payment charge- so never thought there would be a problem once we had the AIP ! Really irritated they wouldn’t let us speak to anyone after calling 2-3 times- if we knew then would have delayed the move till next summer !

amnblog

Barclays, as you have seen are the wrong lender for your circumstances.

Not only do you need a Lender who will work on one year’s figures for the self employed income you may also need one that does not discount that income by half as a second income.

As stated, a good broker will let you know if there is a solution here.

Monica27

Thanks! Did not realise they discount second income as half - the second income is expected to go up in the next couple of years. Would that mean even if we were to wait 2 years tax returns in April 2020 they would only consider half of it ?
I also plan to do some extra sessions of work from September onwards (this was pre planned thinking I will up my work to give us some spare money for leisure activities/holidays etc ) , but think this again will be considered “self- employed” & not sure if they will consider it for April 2020. I was self employed for last 3 years (working free lance part time), so I do have some tax records to show- only from Oct 2018 I took on this 2 days a week employed role as I needed less flexibility once my 2nd child started full time school.