Mortgage application should be straightforward right?

simonp

I have £230k cash in the bank from the sale of my last house and am looking up to £300k for my new place so will be looking for a small mortgage up to £70k (most likely much less). I'm a company director with erratic income and not always easy to prove but despite this, with such a large 'deposit' I would expect a mortgage application to be easy enough right?

I've not applied for a mortgage in a good while so just wanted to check things out!

K_S

@simonp For a mainstream residential repayment mortgage, irrespective of how low the LTV is, your income (as the lender sees it) needs to be sufficient to meet affordability for a 70k mortgage.

Very roughly speaking, you will need to prove annual income of about £15k+ (at 4.5 times loan to income) while meeting lender requirements for self-employed income.

simonp

Thanks K_S - that should be fine!

ACG

simonp said:

I have £230k cash in the bank from the sale of my last house and am looking up to £300k for my new place so will be looking for a small mortgage up to £70k (most likely much less). I'm a company director with erratic income and not always easy to prove but despite this, with such a large 'deposit' I would expect a mortgage application to be easy enough right?

I've not applied for a mortgage in a good while so just wanted to check things out!

Not quite. 
Lenders in the current climate are grilling self employed applicants a lot more than ever - because of covid. 

As an example, I have a case in at the minute and the lender wants the last 6 months business bank statements and the corresponding 6 months statements for the year before so they can compare the 2. 

There are lenders where it will probably fly through without touching the sides, but there are also a significant amount where it wont fly through and you could end up being declined if the income is as you describe. 

We had a case a few months ago, the lady worked in a cash industry. They wanted to see statements from last year and recent to see some consistency, it was consistent as she never paid money into the account, but she did declare her income. I tried to argue that one but they were having none of it. In the end we did it with another lender and all was fine. But in the current climate it is far from straight forward for self employed applicants.