Self Employed Mortgage

[Tigris]

Hi there,

I have been told some mortgage lenders will accept 12 months of company records but i'm having trouble finding them.

Do you know of any from experience?

I am self employed as well as working part-time for another company whilst I build up my own.

Thanks

 

[Mark T Jones]

@tony84 is your man

 

[tony84]

A lot of them only deal with brokers.
Some of the smaller building societies will potentially accept one years accounts, but failing that then you may need the specialist brokers.

The high street lenders usually need 2-3 years accounts. A couple can consider one years accounts but you nee a 25% deposit and it is at the underwriters discretion, so not a given.

 

[Finance Store]

There are a few but you have to go through a broker as they are specialist lenders

 

[tony84]

There are a few but you have to go through a broker as they are specialist lenders

Not all of them are specialist and not all of them need brokers.

 

[Finance Store]

Not all of them are specialist and not all of them need brokers.

Yes not all, but brokers can guide you. Not all charge a fee

 

[tony84]

Yes not all, but brokers can guide you. Not all charge a fee

There is a saying... Good, cheap, quick - you can have any 2.

We charge fees, it is pretty much the first thing I mention to customers. Specialist lenders are a nightmare to deal with, 90% of what we do is with specialist lenders. If I could not charge fees, I would go and find another job. The proc fees alone are not enough for the work involved.

 

[Tigris]

Also need to mention a family member is selling there house and moving in with me, my fiance and daughter so we will have a 30% deposit however I think it's then called tennants in common? We would want the family member to own 30% of the property incase all fails and they want there own property again. Effectively pulling there capital out.

We are doing it for medical reasons as my mum has MS

 

[tony84]

Assuming they are also going on the mortgage, that should be fine.
Probably best to look at doing it before you get married as a lot of lenders do not like to do mortgages for an applicant that is married but not included their other half.

 

[Tigris]

Assuming they are also going on the mortgage, that should be fine.
Probably best to look at doing it before you get married as a lot of lenders do not like to do mortgages for an applicant that is married but not included their other half.

The family member didn't really want to go on the mortgage as they are mid 50's and just starting there own business as well. She wouldn't be contributing to the payments either as her large deposit from her current house would get her 30% in the property basically. The mortgage would be mine and my fiance's to pay and my family member would just live in the property.

 

[tony84]

That cant really be done.
If it is joint ownership and the mortgage does not get paid, that means the lender is going to struggle to repossess as the other owner may refuse to move out.
If it is a "gifted deposit" it is a gift with strings attached (ie they can live in the property) so is not a true gift and is not accepted.

It would need to be 2 or 3 applicants. All of you jointly liable for the full amount of the mortgage. But obviously if you have an agreement one of the people will not pay the mortgage thats fine, so long as the person knows they might be called up to make payments if the other 1 or 2 owners do not - if that makes sense.

 

[Tigris]

That cant really be done.
If it is joint ownership and the mortgage does not get paid, that means the lender is going to struggle to repossess as the other owner may refuse to move out.
If it is a "gifted deposit" it is a gift with strings attached (ie they can live in the property) so is not a true gift and is not accepted.

It would need to be 2 or 3 applicants. All of you jointly liable for the full amount of the mortgage. But obviously if you have an agreement one of the people will not pay the mortgage thats fine, so long as the person knows they might be called up to make payments if the other 1 or 2 owners do not - if that makes sense.

Ahh she wouldn't want to be liable really as she's worked all her life for that one property on her own and not being able to work full time now due to illness. She's basically giving my inheritance early to help us as a family get on the property ladder with a bedroom, reception room of her own to live with us due to the MS illness as well. Our concern is if me and my fiance split up (hope we don't as we've been together 15 years, lol) she needs it in writing really that she owns around 100k share of the property.

 

[Mark T Jones]

I don't know how powerful it is legally, but a deed of trust should work in this situation.

 

[tony84]

Ahh she wouldn't want to be liable really as she's worked all her life for that one property on her own and not being able to work full time now due to illness. She's basically giving my inheritance early to help us as a family get on the property ladder with a bedroom, reception room of her own to live with us due to the MS illness as well. Our concern is if me and my fiance split up (hope we don't as we've been together 15 years, lol) she needs it in writing really that she owns around 100k share of the property.

I dont want to say it cant be done.

But the combination of everything I feel like it is probably too much to overcome.
Your mum (understandably) does not want to take the risk of being liable for a mortgage, but (again, understandably) wants her share protected but then is not prepared to go on a mortgage with her son/"daughter in law".

If your mum would not take that risk with family, why would a lender?

But that aside, it is just generally outside of lenders criteria anyway.
HSBC would have been the exception but they changed their rules last year and would have needed 2 years accounts.

 

[Tigris]

I dont want to say it cant be done.

But the combination of everything I feel like it is probably too much to overcome.
Your mum (understandably) does not want to take the risk of being liable for a mortgage, but (again, understandably) wants her share protected but then is not prepared to go on a mortgage with her son/"daughter in law".

If your mum would not take that risk with family, why would a lender?

But that aside, it is just generally outside of lenders criteria anyway.
HSBC would have been the exception but they changed their rules last year and would have needed 2 years accounts.

Thanks for the replies Tony.

Do you think the outcome would be different if the family member who is making the large deposit was actually on the mortgage then?

 

[tony84]

100%.
There will still be issues to overcome - 3 applicants on a mortgage and mums age, but both of those either on the same case can be overcome.

 

[Tigris]

100%.
There will still be issues to overcome - 3 applicants on a mortgage and mums age, but both of those either on the same case can be overcome.

Ahh yes, that was an issue. Mums mid 50s and you can only have a mortgage until a certain age which meant we would need a short 15-20 year mortgage. The monthly payments would be crazy.

 

[tony84]

Some lenders will ignore mums age if her income is not needed.