Mortgage affordability after removing a person from the mortgage

nyoninboh

Does anyone know if taking a name off a mortgage necessitates a full credit check, or is it similar to a ‘product transfer’, where no checks are done?

Any experienced help or insights would be very welcome!

Edi81

Full credit check. 

Disguising the company won’t wash. 

ACG

What you describe (both options) is mortgage fraud.

This is not going to fit on £12k income or even £33k income (£3k a month). 

As your are self employed, they would work off your last year or 2s worth of self assessments. If you have been paying yourself £12k paye and pulling extra out as dividends then that would be reflected on your self assessment and so you might be able to use that income. If you have not been pulling the money out of the business, there are other lenders who will use paye and net profit. 

But if you have not been declaring income or its a new income stream, then its going to be a year or 2 before you can use it. 

nyoninboh

ACG said:

What you describe (both options) is mortgage fraud.

This is not going to fit on £12k income or even £33k income (£3k a month). 

As your are self employed, they would work off your last year or 2s worth of self assessments. If you have been paying yourself £12k paye and pulling extra out as dividends then that would be reflected on your self assessment and so you might be able to use that income. If you have not been pulling the money out of the business, there are other lenders who will use paye and net profit. 

But if you have not been declaring income or its a new income stream, then its going to be a year or 2 before you can use it. 

Thanks for the info, I had no idea. Based on that, I'm thinking going full time employed again may be the simplest solution. What would be a rough salary I need to aim for, based on the figures provided?

Would a full credit check take place if we take one name off and the remaining name is in full time employment?

MWT

nyoninboh said:

Would a full credit check take place if we take one name off and the remaining name is in full time employment?

Yes, there is no way to avoid a full credit history and income check if you want to have the mortgage in your name only.

ACG

nyoninboh said:

ACG said:

What you describe (both options) is mortgage fraud.

This is not going to fit on £12k income or even £33k income (£3k a month). 

As your are self employed, they would work off your last year or 2s worth of self assessments. If you have been paying yourself £12k paye and pulling extra out as dividends then that would be reflected on your self assessment and so you might be able to use that income. If you have not been pulling the money out of the business, there are other lenders who will use paye and net profit. 

But if you have not been declaring income or its a new income stream, then its going to be a year or 2 before you can use it. 

Thanks for the info, I had no idea. Based on that, I'm thinking going full time employed again may be the simplest solution. What would be a rough salary I need to aim for, based on the figures provided?

Would a full credit check take place if we take one name off and the remaining name is in full time employment?

It would be a brand new application. It would be fully underwritten like any application. 
I dont know what income you would need as it depends on the rest of your circumstances, but it would be in excess of £50k. 

MWT

... and would need to be a genuine employment contract with an unrelated employer, don't even think about trying to resign and move to employee with the same or a related entity, it would trigger red flags with serious consequences.

ACG

MWT said:

... and would need to be a genuine employment contract with an unrelated employer, don't even think about trying to resign and move to employee with the same or a related entity, it would trigger red flags with serious consequences.

This is important. 
If you go from self employed on £12k to employed on £50k, that is quite unusual. 
If there is anything unusual you need to be prepared that they may dig. We get a 12 month employment history and where situations like this crop up, we do extra checks. The majority we turn away. 

lemliss

I've just been in this situation. I can afford the mortgage myself and have done for 3 years. However my income alone wouldn't pass the affordability checks. 
My ex stayed on the mortgage for 3 years but it has come to the point I can afford to pay him off but on paper can't afford the mortgage.
That being said I made peace with the fact I'd need to sell up and move on. I'm moving (hopefully if my application gets approved!) To a smaller house, but it will just be mine. I'm seeing it as a fresh start and I won't have the worry of him deciding he needs a house and me being forced to sell when I didn't want too if that makes sense. 
I understand what you say about sentimental value but maybe you need to take this approach and see it as a move forward to independence. 
Regardless of how amicably you have split if he stays on the mortgage at any time he can say he wants his own and that gave me no security.

nyoninboh

ACG said:

MWT said:

... and would need to be a genuine employment contract with an unrelated employer, don't even think about trying to resign and move to employee with the same or a related entity, it would trigger red flags with serious consequences.

This is important. 
If you go from self employed on £12k to employed on £50k, that is quite unusual. 
If there is anything unusual you need to be prepared that they may dig. We get a 12 month employment history and where situations like this crop up, we do extra checks. The majority we turn away. 

Thanks for all this, really useful to know! Fortunately for me, I am quite unusual...my industry pays well, I just came to the realisation that I'm a terrible employee and would be better off working for myself! I can bite the bullet though if it'll secure the house.

Presumably there would be early termination fees if we were to look at removing my partner's name? (we're on a fixed)

nyoninboh

lemliss said:

I've just been in this situation. I can afford the mortgage myself and have done for 3 years. However my income alone wouldn't pass the affordability checks. 
My ex stayed on the mortgage for 3 years but it has come to the point I can afford to pay him off but on paper can't afford the mortgage.
That being said I made peace with the fact I'd need to sell up and move on. I'm moving (hopefully if my application gets approved!) To a smaller house, but it will just be mine. I'm seeing it as a fresh start and I won't have the worry of him deciding he needs a house and me being forced to sell when I didn't want too if that makes sense. 
I understand what you say about sentimental value but maybe you need to take this approach and see it as a move forward to independence. 
Regardless of how amicably you have split if he stays on the mortgage at any time he can say he wants his own and that gave me no security.

That's my plan B. If it comes to that then fine, but want to make sure I've explored all options first! Hope all goes well with the new home.