Mortgage declined -WWYD

[Potterurotter]

We are selling and got offer accepted on a property we love, today our mortgage got declined dh is self employed reason being net profit would likely be impacted by COVID. We have already committed to renewing our lease to 99 years on completion and have paid out for solicitor mortgage broker etc. If we don’t sell they will put the lease up maybe by another 10k next year. WWYD? We are contemplating applying again to another lender, we are desperate to move for a third bedroom for a baby. To save a big waste of money we are contemplating selling up and renting for a bit until we can get a mortgage agreed, I.e. he is working again, he already has a full diary booked from April 12th he is a driving instructor

Did you go through a mortgage broker? Worth speaking to someone like London & Country who don't charge a fee and will have a good idea of which lenders are most likely to approve you.

Try Lloyds. There are very good with Self Employed. I've always been Self Employed. They approved my mortgage in 2004 as a FTB and again last year when I moved to a 4 bed semi

Definitely try a broker who can recommend a full range of lenders. Some will specialise in self employed.

Thanks all, yes we used a broker as part of leaders. Now I’m thinking it was not great advice

@Potterurotter Our initial mortgage application was decline so our MA went with another provider. Can you do this? They should know which lender to reach out to based on your circumstances. If you don't think your MA is very good then I've heard really positive things about L&C.

Good luck

I would really recommend CMME as an amazing broker for self employed people. Might be an idea to switch broker.

I don’t normally ever do this as I usually despise them but if your DH has been self-employed for a while and you earn at least 30k between you then try hsbc. They are the market leaders when it comes to providing mortgages for ‘straight forward’ self-employed and fixed / zero contract applicants.

If you can't sell surely you can still renew the lease or is that on the place you are buying?

@RandomMessThe lease is on the property we are selling and we can’t renew it unless we sell because it is 44k

😭

Post on the mortgage forum of Money Saving Expert. Lots of brokers and mortgage advisors on there.

You’re best of speaking to your broker again -or find a new one. All lenders are different. Bigger lenders will take on more risk a broker will have access to more lenders

Try Halifax. You can get a MiP through their website (if you meet criteria etc).

Do you work OP? If you don't and got a job in time for the next application, would that swing it? Enough to cover the downturn in profits they expect? Likewise, if you work part-time, would increasing hours make the difference?
It might mean waiting 3-4 months before reapplying. In rented accommodation for some of it.

Or can he file his self-assessment/company accounts on the dot at the beginning of April, to show income + government self-employment grants? They might expect income for 20/21 to be lower than it actually was.

Sorry to hear. We got stung £34k for a lease extension too. It sucks!

Because you need to sell to pay the lease and it will only increase, in your situation I would move into rented if you can’t line up a chain/mortgage in time. It’s a really horrible situation but I can’t see another solution really. Hope you get through it ok!

Before you try another vendor, has your broker mention anything about appealing the decision? My BIL had the same issue a few months ago and appealed and was accepted.

Why were you rejected? Brokers should have advised you better. Maybe threaten to sue them, that usually encourages them to pull their finger out.

@Changeythenamey rejected on my dh side he is self employed it was done on one year accounts of 30k profit after tax he gave two years but they only used one. I earn 37k permanent job. Since December 2020 he wasn’t able to do driving instructor work but is working part time at tesco in meantime. We have 100k equity and were trying to borrow £304k

My sister had this issue. They found another deal from elsewhere.

Panic not. We had our mortgage dumped after exchange! Go through a broker and they'll find another deal for you. It all worked out in the end for us.... stressful though!

Forgot to say self employed here too.

How short is your lease for an extension price of 44k and that's only making it 99 years?

Have you looked into the costs of a statutory lease extension? That would add on 90 years to your existing lease and make ground rent zero.

And to say it would cost 10k more for the extension next year you are being taken for a ride by your freeholder (I am a freeholder).

@ItsSnowJokes the lease is 54 years. Yes we are of course but they have us over a barrel and threatened if we dispute it that they would essentially delay our move (before we got mortgage declined) and we would incur costs disputing it. Dh said statutory extension would take too long? 10k was approximate but I’m sure they would probably put up to 50k and it seems the leaseholder can do what they like

[quote Potterurotter]@ItsSnowJokes the lease is 54 years. Yes we are of course but they have us over a barrel and threatened if we dispute it that they would essentially delay our move (before we got mortgage declined) and we would incur costs disputing it. Dh said statutory extension would take too long? 10k was approximate but I’m sure they would probably put up to 50k and it seems the leaseholder can do what they like[/quote]
With a statutory lease extension there is a very set time scale. Yes it will take longer than an informal one, but it will probably be cheaper for you. I would double check a lease calculator as a rough guide and see what it comes out as. Then your solicitor could issue a section 42 to your freeholder. They would have 2 months to counter offer your lease extension.

Are you paying the freeholders legal fees with your informal lease extension as well?