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Re-mortgaging with no self-certs available

by Pocketpip 09 October 2008 |

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I took out a mortgage 2 years ago, my salary wasn't high enough to purchase the flat I wanted, so I did a self-cert mortgage through a broker. I live with my partner, and he pays half of the mortgage, so we can afford the repayments. We need to re-mortgage by December (or our current rate will go up to 12% which is not affordable for us), but don;t know how to proceed when the self-cert option is no longer available. Will mortgage lenders still view me favourably becasue i have made all of my payments over the last 2 years, or will I struggle because my salary isn't at the level expected for the size of my mortgage? I have been advised to contact my current lender first to see what they can offer, but I am worried about them realising that I am not earning the salary that they initially thought. Any suggestions?
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Fool274466597 posted
Personally I would approach an independent mortgage broker as deals are still round with a few lenders, one I know is with Abbey, on Self Cert Basis.
The important thing here is that your original mortgage would have been based on certain criteria, apart from income. The important factor would have been loan to value %. Also to obtain a self cert if your status was unacceptable within the standard market, you may have inflated annual income on the application form.?
Lenders always look at affordability as an essensial factor.
If your existing lender increases to 12% at expiry then it is doubful that they will offer beneficial terms now. As self cert mortgages impose up front fees tread carefully. A better bet would be to approach a lender offering a 5 year fixed deal and put your cards on the table as far as income is concerned, who knows with a good credit rating and a 2 year proven payment record you may strike lucky.

Posted on 09 October 2008 | Love 0 loves Report
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matchmade posted
I agree, you need to use a broker as they often have a hotline through to the underwriters. If you go through Customer Services as a normal retail customer you will just hit a brick wall. Ditto avoid your existing lender: reverting to 12% is ridiculous so you need to move.

Alternatively look at a buy-to-let mortgage, as they don't look at your income, only rental coverage: your partner would be the tenant on an assured shorthold tenancy. You would maintain an official address elsewhere (parents?), but could stay with him as a long-term guest.

Equally why don't you just apply on a joint income for a regular mortgage? Does your partner have a property of his own, or is there some other complicating factor?
Posted on 10 October 2008 | Love 0 loves Report
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Pocketpip posted
Thank-you both for your answers. My salary was inflated on the inital self-cert application, my partner was not jointly on the mortgage at the time as there were some problems with his credit(through a previous joint mortgage on which payments had been missed without his knowledge- we were not aware of this until out mortgage broker uncovered it when a lender withdrew an offer). My partner is freelance and this year has been very quiet for work so he cannot provide evidence of a salary which would allow for us to apply for a joint mortgage.
I spoke to our previous broker this week who said that mortgage brokers weren't able to access any deals at the moment, and he suggested that we contact our current lender directly.
Posted on 10 October 2008 | Love 0 loves Report
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zola123 posted
Try First Direct, they seem to have good rates at the moment. I know that house prices have dropped recently but before that house prices did go up, you my have more more equity in the property than you realise, which could help you gain a mortgage.
Dont give up. Try phoning around to all the lenders and search on the Fool of course.
Posted on 16 October 2008 | Love 0 loves Report

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