Self Employed - How to get a mortgage?

[ash213]

Have one years proof of income through tax return etc. If im correct this is not enough to get a mortgage? where do i stand? cheers all.

 

[90DC]

Somebody will correct me if I am wrong, but lenders usually ask for proof of 12 to 36 months income. You may run into problems if your work and payments are irregular.

If you feel you could safely afford a mortgage, why not speak with a mortgage advisor, who will tell you what's out there to suit you and could probably help you along with it?

 

[ash213]

Somebody will correct me if I am wrong, but lenders usually ask for proof of 12 to 36 months income. You may run into problems if your work and payments are irregular.

If you feel you could safely afford a mortgage, why not speak with a mortgage advisor, who will tell you what's out there to suit you and could probably help you along with it?

i supose my bank account is proof of my income, as a sole trader all the money that comes in is via paypal.

i do not want to waste time organising a meeting with a mortgage advisor until i have solid proof from some one that i could get a mortgage.

know what i mean?

 

[tony84]

Do you have 1 years of accounts or just money coming in to your business for a year?

There are lenders out there that will do it with 1 years worth of accounts. Theyre few and far between but there are soem out there. Prob a best to speak with an advisor we have systems that will syphen out the companies that will look at your application.

If your in the north west then id be happy to come and meet up with you as im a fully qualified mortgage advisor.

There are also some lenders that will fast track it without even checking your app fully. But this will depend on your credit score etc its also hit and miss whether it would go through or not but can be worth a try as a last option.

 

[Feldon]

I am an ex-mortgage advisor and a lender will look very carefully at self-employed income, don't think you can self-cert any more. Do you have an accountant? or did you just submit an online self-assessment return? Bank account will help back up income but it will not give the full picture. Lender will want to know net profit, after all expenses but before drawings etc. In the current economic conditions you will need a large deposit if they even consider you. It will also depend on you credit history, do you have any CCJ or missed payments against credit cards, utility bills etc.

My advice find a good local mortgage advisor (high street banks won't touch you) ask them how they take their fees ie do they charge an upfront fee or do they rely on commission only on completion from lender. Any good mortgage advisor will qualify you before making an appointment and charging you a fee, and so if they don't thnk they could source you a mortgage will let you know and say come back in one, two or three years when your circumstances have changed. Ask mortgage broker if they are whole of market or only offer products from a panel of lenders.

 

[Scousejock]

As a broker the main question is to you have accounts to prove your income or just your bank statements which would not be considered proof.

It may be possible for you to obtain a mortgage depending on how much deposit you have and what may be beneficial is if you can produce projections as well as your last years accounts.

 

[ash213]

I have all bank statements but also have my sort of 'books' and spreadsheets detailing ins and outs of my soletrader business.

Do HMRC provide you with something to say how much tax you are set to pay based on your tax return?

could any one recomend a good mortgage advisor to get in touch with?

i am based in Bristol

according to credit score my score is pretty high, with a couple of late payments from a few years ago.

i applied for a credit card the other day and got accepted, if this counts for anything.

do i need my 'book's records etc certified by an accountant? will mortgage lenders want to see an accountant saying these look OK?? i am submittting my self assessment myself, but my accountant is dealing with my VAT.

thanks all

 

[tony84]

try to keep credit checks down to a minimum. They will effect your credit score.

I cant recommend any in bristol im afraid. Give unbiased.co.uk a try.

Also as stated you can probably expect to pay a fee. These can vary anywhere from around £300 to anything upto £2,500 i have seen.
DONT pay even half of that top figure as although there seems to be a bit of work involved that is far too much - those people give the industry a bad reputation.

Its worth getting someone who knows what theyre doing as its not a case of nipping to Barlcays and submitting an app.

 

[Pezza832]

Hi there, my girlfriend and I are in exactly the same situation as you. However, we're both self-employed. I have 20 months accounted books, she has only three. I'm sorry to say this but we're struggling badly to get a mortgage. We've tried almost every approach possible and there is no way we're getting a mortgage until I gave 24 months. Even then we're not guaranteed one. They will take an average of my first and second year's profit and multiply the income by between 2.75 and 4. They won't take my girlfriend's income into account whatsoever even though she's earning a projected 40k! My profit this year will be 29k and we have around 15k saved for a deposit. Everything is there in black and white... Books, account, statements. The only way we stand a chance at 2 years books will be based on a large projection and the hope of having 25% deposit! It's bad news I know but this is the hard truth and you will have to bide your time. The only thing I can suggest is find someone to be a guarantor. We tried this with our parents but being in their late fifties they are TOO OLD!! We even tried my brother and his fiancee who are very well off but the process is too messy as they're looking to get a second mortgage in a year or two! See what I mean... We've tried almost everything...

 

[Truemanbrown]

I have all bank statements but also have my sort of 'books' and spreadsheets detailing ins and outs of my soletrader business.

Do HMRC provide you with something to say how much tax you are set to pay based on your tax return?

could any one recomend a good mortgage advisor to get in touch with?

i am based in Bristol

according to credit score my score is pretty high, with a couple of late payments from a few years ago.

i applied for a credit card the other day and got accepted, if this counts for anything.

do i need my 'book's records etc certified by an accountant? will mortgage lenders want to see an accountant saying these look OK?? i am submittting my self assessment myself, but my accountant is dealing with my VAT.

thanks all

A lot of mortgage lenders would like to see a letter from an accountant.

For one thing, lenders are trying to pass off liability on to accountants (and their public liability insurance). Which is why an accountant, if asked to prepare this letter will/should put a disclaimer at the bottom of the letter.

 

[ash213]

My partner is a teacher earning 24k, i declare taxable profit earnings of around 23k from what i can remember.

with my GF being a teacher in full time employment will this help us?

we have around 30-35k deposit, and want to buy a house that is priced around 120-130k just to get on that ladder.

 

[cmcp]

You'll be able to purchase somewhere based on your partners wage alone.

 

[ash213]

You'll be able to purchase somewhere based on your partners wage alone.

how much ££ can we get based on her wages?!

 

[cmcp]

I don't know you'll need to ask the bank. With a 10% deposit and a 24k wage you'd probably get something like £120k. With a higher deposit you'll get better interest rates, and if they'll consider your income that's even more security.

 

[ash213]

I don't know you'll need to ask the bank. With a 10% deposit and a 24k wage you'd probably get something like £120k. With a higher deposit you'll get better interest rates, and if they'll consider your income that's even more security.

we was thinking initially of just going to the 'teachers building society' and applying for a mortgage just in her name for the time being.

 

[Pezza832]

Yeah, you'll get one easy then! But purely based on your GF's income though. You'll get about 100k but with your 30k deposit that means you'll have a nice 130k. Perfect for what you're after. You can get on the mortgage in a couple of years when you gave 3 years then you can get a bigger place based on both wages. Good luck!

 

[tony84]

If you work on 4x wages thats usually not stretching it. Presuming you have no loans, HP, credit cards with large balances etc.

A £100k mortgage and £30k deposit based on £24k annual income is doable.

 

[Scousejock]

As a mortgage broker.

You could have your name on the mortgage even if you are basing the loan purely on her income.

If you wanted to borrow more and include your income you will need to provide 2-3 years accounts to show your income and they will generally work on the average although this is not always the case.

If you need any specific info feel free to drop me a pm.

 

[workingnomad]

I have been told last week that if I have 25% min deposit and three years accounts done by an accountant then I won't have an issue. My issue is that house prices are still ridiculously high in my area!

 

[Scousejock]

I have been told last week that if I have 25% min deposit and three years accounts done by an accountant then I won't have an issue. My issue is that house prices are still ridiculously high in my area!

Many people who bought properties when the values were high would say that property prices are ridiculously low.

Now is actually a good time to invest in property, the problem for most is securing the finance needed to do so.

 

[BustersDogs]

My bank want 3 years before they will offer me more money so I can do some improvements to my home or move. I have just done 3 years, but my first set of accounts was 9 months to get my accounts to end at the tax year.

When I spoke to them, they said they had no idea how I could afford my current mortgage, so not to expect anything even when I've had April's accounts done. The trouble is, when I was working and got the mortgage in the first place they counted all my benefits as income (my son has a disability so we are on a very high rate) even though they didn't need to. Now they will *only* count my profits.

I'm trying to stop spending money I don't need to - hey, I've got spare cash, the business can buy those extra dog toys and beds, and dog training books that I don't strictly *need*... but it's very hard!

 

[Scousejock]

Just because your bank will not take "all of your income" into account does not mind that all lenders think alike.

Speak to a mortgage broker and give them the full details of what you are looking to achieve and they will be able to tell you if this is possible.

I am a mortgage broker of 20 years and would be happy to help if I can if you would like to pm me.

 

[workingnomad]

Where I live prices are still 2007 levels in many case, and deluded sellers are not budging at all.

I admit in many parts of the country this is not the case, but the South-east, London and the South-west prices are still way too high compared to average wages which has always been a main indicator of affordability.

 

[ash213]

So, if my GF applies only in her name, you chaps think we could get £120k ish mortgage if shes earning around 24k?

that would be good, plus the 30k deposit, we should have enough for our first place.

and there is a chance i could be put on the documentation of the mortgage? even though its just based on her income?

with the teachers building society, it seems you have to apply on the phone, does anyone know how this works? my GF is scared about applying/phoning, so im trying to do groundwork before she gets on the phone to them. will the whole application be on the phone? how long would it be before we get a decision?

need to move ASAP, sick of renting guys!

 

[Scousejock]

Is there any specific reason why you are going to that lender. Check rates and compare them as well as fees and total costs.

£120k is potentially possible but will depend on other factors as well.

Although they may base it on her income your credit rating would come into it so without knowing how that shows this could effect what they will lend even if your income isnt being used.

Do some research before applying. Pots of credit check through lots of company will reduce your credit rating so dont just go applying everywhere. Research first.

 

[tony84]

Teachers building society have/had some good offers on. Ive not had many teaching clients recently so cant comment at the minute on how their offers shape up.

With regards to the £120k i think you might be pushing it a bit. You would definately get £100k, most likely £110k but £120k there will not be as many lenders available to you so the deals may not be too great.

 

[ash213]

we are going to apply with woolwich