What does this mean?

suzanne7474

I was trying to find out what the mortgage requirements were for the Natwest, as a self employed person and came across the attached PDF, dated 24th april 2020.
It states -
'Proof of income- residential mortgages less than 75% LTV and £500,000, latest HMRC SA302, or latest years accounts'.
'For mortgages of less than 75%, or over 500k, 2 years SA302s/accounts'.

So I called them to clarify only to be told, they would want 2 years SA302s (for any mortgage) and that they couldn't comment on the document that states 1 year. So I'm confused why they would say one thing, then another. Or have I misinterpreted the document?! Any mortgage advisors on here perhaps could shed some light?

[Deleted User]

If you are under 75% LTV Natwest can use your latest years accounts rather than averaging them.   You will still need to have been trading for 2 years though and put this income into the application.   

In addition to this, all self employed clients are expected to show 3 months of bank statements or invoices to show business has not been impacted by Covid lockdown. If it has or you cant evidence that it hasnt then expect a decline

csgohan4

criteria change all the time, only the lender themselves have up to date criteria which some are not available to the wider public or published, neither are they set in stone.


Whether a document says it needs 1 year in the past is irrelevant, if the lender now says they need x, then you can't argue as it's their rules and their money.

As your self employed and trying to do this by yourself, best to use a broker who can match you to a lender. 

Some lenders allow 1 year some don't but given the current crisis, alot of lenders are understandably tightening up their criteria and reducing their risk appetite

suzanne7474

Thank you for your input Deleted_User.
If you are under 75% LTV Natwest can use your latest years accounts rather than averaging them.   You will still need to have been trading for 2 years though and put this income into the application.   

While I appreciate lending criteria do change, I'm wondering if this is a more stable element? The reason I'm keen to understand is I already have a natwest mortgage with ERP fee of 3%, and 3 years left on a 5 year deal, so I'd like to port it ideally, although may consider going to another lender.

I have completed 2nd year of my new business, but averaging may not have worked for me, so being able to use the latest year trading figures could make a big difference. It's worrying to have the bank themselves giving contradictory information when I'm trying to plan our future and make big decisions. Right now I'm trying decide whether to have a work done on the house to prepare for sale (if I can use latest accounts), which is plan A, or put the money into the business and sit tight for another year, plan B.

suzanne7474

csgohan4 said:

criteria change all the time, only the lender themselves have up to date criteria which some are not available to the wider public or published, neither are they set in stone.


Whether a document says it needs 1 year in the past is irrelevant, if the lender now says they need x, then you can't argue as it's their rules and their money.

As your self employed and trying to do this by yourself, best to use a broker who can match you to a lender. 

Some lenders allow 1 year some don't but given the current crisis, alot of lenders are understandably tightening up their criteria and reducing their risk appetite

Are you in the mortgage industry?

[Deleted User]

Not sure what you mean by 'if this is a more stable element'? 

Its not always been Natwest policy to use latest years accounts.  I dont think its even full 100% policy just now, its just that they can use latest years accounts if the case stacks up in other areas.  I've used it a few times over the last 6 months.   
The changed it to bring this in so I cant see them removing it.  They are more likely at the moment to ask for bank statements or accountants reference (last time i did one of these they asked for accountant to confirm income was on track to be repeated)

Find a broker and get an agreement with Natwest to do a porting case.  Natwest are a funny lender in that they give brokers cheaper rates than their own advisors and we tend to have ability to speak to underwriters and discuss benefits of a case in more detail.   If your latest year accounts are in line with business expectations and youve got more than 25% deposit then it should be fine.  If you've got 2 years and they are £8k profit and then £85k profit then i doubt it will go through even if it meets criteria.