Buying a home with a new job? Self-cert mortgage needed?
A reader from London is about to buy a new home, but her job is changing so she wants to know if it will affect the mortgage she has lined up.
Drawing on years of experience, mortgage adviser Katie Tucker - technical manager at fee-free whole of market mortgage broker charcol.co.uk - takes her through the situation and what it means for her finances.
Alice from London asks::
Hello. I am looking into buying a house with my friend.
However, I am just about to move from permanent employment to contractual employment with my current employer, and will be changing jobs completely by the end of the year, or even becoming self-employed.
If I get a mortgage offer in principle, what may happen if my circumstances are different by the time I apply for a formal agreement?
Many thanks.
Alice.
Katie replies::
Good question Alice, and the lender would ask on the form if anything has materially changed since you got your Agreement in Principle.
If you wait more than three months, the AIP will be void anyway.
The good news though, is that changing to a contract with the same employer in the same job is viewed as acceptable as some lenders, so just make sure that your broker only searches for you now using lenders that accept contract workers.
Going self-employed is slightly less easy: it's not a bad thing if you have stayed in the same line of work, however you won't be able to prove your income so you may have to self-certify, which requires a higher deposit and normally comes with a higher interest rate.
If you have a question for Katie, go to the myfinances.co.uk Ask the Mortgage Expert section.
For more information on the issues discussed here, go to mortgage broker charcol.co.uk or call 0800 358 5560.
Charcol Limited is authorised and regulated by the Financial Services Authority (FSA registration number 427339). The FSA does not regulate credit cards, personal loans or some investment mortgage contracts. Some buy-to-let mortgages are regulated by the Consumer Credit Act (CCA).
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