Remortgage Advice!!!

sharrison01

Just wondered if anyone could give me some mortgage advice.

Have just completed 1st year of a 2yr fixed rate on my first property with my partner. She is employed by the NHS but I am self-employed so had to go for a self-cert mortgage last year.

I started out my job straight form uni four years ago and have only been making proper money for the last year as i was learning on the job. this means i only have one years accounts to really show as each year ive been earning more but the 1st three years, my salary was obviously lower. i also do my own accounts as i studied finance at uni and thought id at least try to use something that id learnt!

I had a default whilst at uni but that wouldve cleared (6yr time period) by remortgage and my LTV will prob be 80% as we've been doing work on the property and initially put down 10%.

my concern is that when i remortgage next year, i will probably not be able to get a self-cert but will not have the accounts to show 3yrs income. also, my earnings and tax return do not exactly tie up and my proof of earnings will either be through deposits to my personal account or my business statements which are extremely confusing to anyone outside the industry.

is there anything that i can do now to start preparing for remortgaging?

any help would be much appreciated...

Conrad

Why wont you get a self cert mortgage?

Tax returns and earnings almost never tieup in my experience. We all employ Accountants to minimise Tax, and thats done only one way - by minimising income.

dimbo61

you got a mortgage last year when you were earning less than you are now.
your partner has paid employment in the NHS
keep your accounts up to date and make sure you pay all the tax you need to and you must pay all bills on time to show a good credit history.
think long term if you intend to stay in this home for a few more years ie 5 year fixed and as you are self employed consider offset mortgages
GOOD LUCK

herbiesjp

You do not need 3 years accounts for a self cert mortgage or a full status mortgage.

You can get away with 1 or even 2 years accounts for a full status mortgage, depending on which lender you approach. However whichever lender it is, they will look at the NET profit figures. So these figures along with the PAYE income will need to be high enough to support the mortgage in the eyes of the lender.

So you might want to put done fewer expenses this year in order to get a higher NET profit to make re-mortgaging easier

Ian_Griffiths_Halifax

dimbo61 wrote: »

you got a mortgage last year when you were earning less than you are now.
your partner has paid employment in the NHS
keep your accounts up to date and make sure you pay all the tax you need to and you must pay all bills on time to show a good credit history.
think long term if you intend to stay in this home for a few more years ie 5 year fixed and as you are self employed consider offset mortgages
GOOD LUCK

Why would he want to consider an Offset Mortgage just because he's Self Employed? That's a weird statement.

sharrison01. What do you do for a living and what does your partner do in the NHS? If she is a Professional such as Doctor, Dentist, Chemist, you may be able to get higher income multiples for her.

sharrison01

thanks for reading the post and with the advice.

im a futures trader and my partner's a speech therapist, so unfortunately no help i assume as she is not a doctor etc.

i was also interested to know if lenders look at affordability rather than just the multiples of what we could borrow. we basically bought our property in a particularly good area in the south east for £250000 with a 90% mortgage. with the work that we have done and are doing, i predict it to be worth around £275000 next year as we bought it knowing there was profit potential. we're happy with our monthly repayments at the moment and as we got a rather high rate at the time of 6.39% due to my default, a figure around there or slightly lower would be fine, which seems achievable even with the current stringent lending.

if we were able to fix this rate for around a ten year term i would probably be more than happy and also wondered if the longer term would yield a lower rate?

also, can anyone give me an idea as to what predicament one would be in should the housing market collapse and my deposit be eaten up requiring a higher LTV? am obviously hoping and thinking that it wont happen, especially in the south-east but interesting to gauge opinions...

dimbo61

your partner is a speech therapist and therefore a professional registered with the HPC along with 13 other professions allied to medicine ( I am in the same club ) I was offered 5 times my wages when i applied for a mortgage.
Offset mortgages are a great place to save money for the TAX bill and also very useful for savings when things are quite at work. saving 9/12 months of income if self employed gives you breathing space if you have no work between contracts . try yorkshire building society if you want a long term fix GOOD LUCK

ixwood

sharrison01 wrote: »

thanks for reading the post and with the advice.
also, can anyone give me an idea as to what predicament one would be in should the housing market collapse and my deposit be eaten up requiring a higher LTV? am obviously hoping and thinking that it wont happen, especially in the south-east but interesting to gauge opinions...

lol at especially the south-east. Why would the area that has seen the biggest rises not be the area with the biggest falls?

Throw in the credit crunch/contraction and our bloated London centric finance industry imploding and things could get ugly.

The money's moving East. London could well have had it's day IMVHO.

ixwood

If your equity disappears, you either get shafted on the SVR cos you can't refinance, or you cough up some cash to improve your LTV.