Mortgage whizz required ...would we be lent £..

[Ohgoonthenpouranother]

DH self employed and has been 3 years now. His earnings are approx £16k I think this is gross profit.

I am part time and earn £21.4

When we got our mortgage 5 years ago our joint income was £70+

House worth £250
Mortgage £150 over 17 years.

Repayment is £1015 per month not on very good rate.
We make this easily. Also have car loan £250 per month and 1 other loans but these actually all cleared before mortgage ends may 2012. So no other commitments.
So we can easily make payments.

I'd like to borrow £170k ish as we want to convert loft, and I have £15k saved already. Plus we want to change car so little bit more required.
Rather not increase term but thought a better fixed rate would cover it similar to our existing monthly spend.

We also want cheap life insurance and DH doesn't have a private pension !!

Have we got a knats chance in hell?

Borrowing £170k against an asset worth £250k (68% of the value) is theoretically possible. What you will have to research more fully is whether a declared self-employed income of £16k is enough to get you a mortgage of £170k. Your income is unclear...£214/week? £21,400 p.a.? I would suggest that you first talk to your existing lender about other products that they may be able to offer you once your current deal expires in May 2012. As an existing customer with a good payment record that may be the easiest route.

Second option would be to get hold of an independent mortgage adviser and ask them to look at suitable products for your circumstances. Self-employed status often means rates are higher.

Thank you!
Per annum salary of £21,400

Thought the self employed bit was the trouble!!

If you're the main wage-earner it may not be as critical as you think. He'll have to provide a lot more proof of earnings than a salaried employee but your earnings could swing it in your favour. And, of course, you've been successfully meeting the payments on an existing mortgage for quite some time. A friend with a self-employed husband had quite a lot of difficulty getting their first mortgage because her salaried income was a fraction of his self-employed income and they had no track-record with a lender either. When they remortgaged a few years later they could get a much better deal because they had history.

I do think you'd benefit from independent mortgage advice. They have software that lets them rattle through all the products on the market and find something suitable far quicker than if you're trying to find something off your own bat.

TBH I don't think that you might struggle at raising £170k on a max of £38k (and that is taking the gross figure into account so obviously net profit will be lower). That is around 4.5 x joint income and is way above normal lending criteria now.

Any lender will look at the amount of disposable income that you have as part of the affordability criteria and they look at how many children you have, other credit commitments and council tax payments before they work out the affordability. You will normally be able to renew your product with your existing lender but that is different from either remortgaging to another lending or increasing your borrowing.

Disclaimer - I work for a lender.