Morgage query

blonid

Just wondering my partner has a second income and they wont take this into account until his company is 3 yrs old. We were under the impression it was after one year? Does it differ between financial advisers?

homer_j_3

If your partners second income is self employed work then they will want to see 3 years accounts normally to be able to fully satisfy the lenders criteria. It can sometimes be done with 2 and a projection from a qualified accountant.

There are some lenders that will accept 1 year if your credit score is good and can prove the income through bank accounts etc.

The policy will be different between lenders not advisers as such but you should always check that your adviser has the widest range of products and lenders to offer.

blonid

Thanks for that reply. His company is over a year old now and if this was included in our morgage we could afford to buy. None the less Perhaps waiting another year isint a bad idea and seeing how the market goes.

homer_j_3

If you could demonstrate this income and had a big enough deposit then your situation would probably fit into a self cert mortgage BUT your rate will reflect this and costs also. As you say a 1 year delay may not be the end of the world.

blonid

when you say your rate will reflect the cost- do you mean that if one was to self certify the % rate would be more? as the FA would perhaps be taking a risk on one year accounts for second income?

Everybody is stupid but me- Quote by Homer J Simpson...Doh...sorry couldn't resist!!!

homer_j_3

You need to firstly understand that a mortgage adviser/broker are simply the people that help you get from point A to point B. The role of the adviser/broker is to understand your needs and requirements and then provide the most suitable solution to you.

The lender will set the rates and the criteria in which they are prepared to lend their money out. The broker does not determine this. Sorry if you knew this but I am reading your posts as if the broker is charging more because of the risk, when it is not the broker.

All self certification mortgages are classed high risk in comparison to normal full status mortgages (mortgages where proof of income can be provided). Due to this risk, the products will be priced to reflect this by the lender.

How differently priced they are depends on the applicant. If they have an A1 credit, then you may get a pretty competitively priced product. Where as someone that has had a jaded past credit wise may have a less competitively priced product.

The adviser should not charge more for a self cert in broker fees as the work is the same if not easier than a full status mortgage as they do not have to check payslips and calculate where all the income is coming from.

HTH.

blonid

all is clear now thanks for explaining this to me.