Mortgages

[Lumiere]

Is there a way to get a "mortgage" via loan route these days ?

I like to treat myself with holidays between contracts, so 6 weeks break criteria may be a problem and also don't need to borrow much for a long time - will probably repay in full within a few years anyway.

I remember someone had mentioned it here a few years ago, getting a special loan towards house purchase.

[pjt]

That's what they normally look to ask. This seems to be a step back to more traditional earning multipliers.

[northernladuk]

Real question is what can you afford?

[pjt]

Ah. I thought that looked very low. Not looking at the moment but would be keen to here what the final multiple is.

[eek]

Doesn't look like much of a mortgage from them then. If I've got this right someone on £500 p/d can get a £ 115,000 is that right?

Nope £500 a day gives you an income to use for mortgage purposes of £115,000. The next question and the one that is missed out above is how many times income can you borrow...

[pjt]

Doesn't look like much of a mortgage from them then. If I've got this right someone on £500 p/d can get a £ 115,000 is that right?

[SueEllen]

Did your guy say why they're making these changes?

RISK

[Alan @ BroomeAffinity]

He's the mortgage broker / IFA I work with.

[craigy1874]

When you say he is your guy? What do you mean by that exactly?

[Alan @ BroomeAffinity]

Did your guy say why they're making these changes?

Nope. I'll ask though.

[northernladuk]

Can't find the other posts.. Dunno how to search linkedin on my mobile

EDIT : Found out.. There appears to be changes at Santander and Chelsea BS regarding contractors as well. Dunno what though. Fat lot of good I am huh.

[VillageContractor]

Did your guy say why they're making these changes?

[northernladuk]

John Yerou from Freelance Financials posted something about Natwest recently. In fact I think there was another post about another lender as well. Must admit I'm not looking so didn't read it but guess it's this.

[Alan @ BroomeAffinity]

For all you guys considering a mortgage at the moment, I'm told by my mortgage guy that Nat West/RBS etc are changing how they assess contractors. See below, its a bit longwinded but handy to know:

From today, the way we assess the income of self-employed contractors earning more than £75,000 a year has changed, as well as the income proofs we require from them.

We will now calculate their income as their average weekly contract income multiplied by 46, provided they can evidence:

· over a 12-month period (incorporating the date of application) they have received or will receive sufficient income from one or more contracts
· they have received a minimum of 6 months’ income from one or more contracts immediately preceding the date of application
· they have had no more than a 6 week break between contracts in the 12-month period
· their latest 3 months’ consecutive personal bank statements for their main account (not required if their main account is with NatWest or RBS)

To ensure we meet our commitment to responsible lending, when considering the committed expenditure of self-employed contractors earning over £75,000 a year, please ask your customers to take into account any professional fees and expenses relating to their role that will need to be covered on an annual basis. These may include but are not limited to costs such as indemnities, subscriptions, professional memberships and training expenses in order to complete their duties. Extended travel and accommodation costs that are not reimbursed via a contract should also be seen as an expense.

Scenario examples

Acceptable
· Applicant has received 10 months’ income from one or more contracts immediately preceding the date of application and has 2 months’ future earnings remaining on one or more contracts.
We will accept this because the applicant has received at least 6 months’ earnings from one or more contracts immediately preceding the date of application and has 2 months’ future contracted earnings left to receive that will total 12 months’ earnings.
· Applicant has received 6 months’ income from one or more contracts immediately preceding the date of application and has 8 months’ future earnings remaining on one or more contracts.
We will accept this because the applicant has received at least 6 months’ earnings from one or more contracts immediately preceding the date of application and has 8 months’ future contracted earnings left to receive that will total 14 months’ earnings. In this instance, we will take the applicant’s historic 6 months’ income together with 6 months of their future contracted earnings to calculate their average weekly income from exactly 12 month.

Unacceptable
· Applicant has received 6 months’ income from one or more contracts immediately preceding the date of application and has 4 months’ future earnings remaining on one or more contracts.
We will not accept this because the applicant is only able to evidence a total of 10 months’ earnings from their contracts and not the minimum requirement of 12 months’ earnings.
· Applicant has received 3 months’ income from one or more contracts immediately preceding the date of application and has 9 months’ future earnings remaining on one or more contracts.
We will not accept this because the applicant is only able to evidence a total of 3 months’ earnings from their contracts immediately preceding the date of application and not the minimum requirement of 6 months’.

If you would like to discuss how we can help your contractor customers looking to buy a new property or remortgage an existing one then please do call me.