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MSE News: Can the self employed still get a mortgage?
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Former_MSE_Guy
Posts: 1,650 Forumite
This is the discussion thread for the following MSE News Story:
"Loans where you declare your income without proof will be banned next year, but there's still hope for the self employed ..."
"Loans where you declare your income without proof will be banned next year, but there's still hope for the self employed ..."
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Comments
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I have a self-cert BTL mortgage, is there anyway that my tenant could take it over?
nicola0 -
This could be a big blow to the recently self employed – a group that has grown over the past few years due to rising unemployment – or those who have changed their role or their company's structure, meaning their recent employment history does not correlate with their likely future.
Maybe it will help people manage their expectations better. Self employment has its pitfalls.
Do no work = Earn No Pay.
Something that could happen for a variety of reasons. Often beyond the individuals control.
Better to buy when you've earnt the money than enter a committment that you are unable to keep.0 -
As long as you can prove your income over a period, you will still get a mortgage. May have to be a bit less clever with HMRC though or you may not show enough official income.0
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As long as you can prove your income over a period, you will still get a mortgage. May have to be a bit less clever with HMRC though or you may not show enough official income.
Does it make any difference?
If you spend money, you spend it. The more that is tax deductible the better, as less tax to pay.
Inflating ones income to borrow more, becomes a double negative as you've less money to meet higher committments.
Being a tortoise or a hare? Which gives better outcome.0 -
I am very concerned. I am a contractor and recently switched from using an umbrella company to using my own limited company for my contracts.
I have have consistently had contracts running back to back for 6 years. But I only have 6 months of company accounts to show.
I have a mortgage currently (penalised before for being self employed) so not a great deal. I want to sell it and get a new house. Or at least remortgage.
However not sure if I will be able to get a new mortgage now.
I have a decent deposit, excellent credit and a healthy income. You would think they would be desperate for my custom, and if I can't get a mortgage then there is no hope for anyone.
However I am newly self employed, so am I one of these new Mortgage Prisoners stuck with my current deal?
Should I focus on my bank (where my current account is) who will take my statements proving my income into "account" before deciding to lend. Or go to a specialist contractor lender? Or go into a high street bank and explain my situation..
I thought the government would be encouraging being an entrepreneur and going it alone not making things harder for us.0 -
UPDATE: I spoke to my bank alliance and leicester who have my commerical and personal bank accounts so holding all the cards.
Their answer... well first they asked me to apply on phone (my local high street bank doesnt have a mortgage advisor?! Then they put through to their new owners Santander, the friendly customer service person cheerfully told me I'm sorry you dont have 2 years accounts the computer says NO you cant have a mortgage goodbye.
Now I've been doing some research and am thinking, do I:
a) Go to a specialist lender for contractors based on my rate and get a mortgage this way? Lend up to 4x your contract rate I hear.
b) Switch to using an Umbrella where I get payslips and pay PAYE for 3-4 months of payslips. Get mortgage so computer says YES, then go back to using my ltd company again?0 -
Now I've been doing some research and am thinking, do I:
a) Go to a specialist lender for contractors based on my rate and get a mortgage this way? Lend up to 4x your contract rate I hear.
b) Switch to using an Umbrella where I get payslips and pay PAYE for 3-4 months of payslips. Get mortgage so computer says YES, then go back to using my ltd company again?
Why not see a local mortgage broker and see what they say?I am an Independent Financial Adviser (IFA). The comments I make are just my opinion and are for discussion purposes only. They are not financial advice and you should not treat them as such. If you feel an area discussed may be relevant to you, then please seek advice from an Independent Financial Adviser local to you.0 -
Thanks for the reply dunstonh, I have been researching and getting lots of advice from brokers, not just posting on here
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I have spoken to L&G (recommended by Martin) who seemed to think I should pursue option b) and to use Natwest. However I am concerned that Natwest might agree in principle only to turn me down when they realise im a contractor at a later date.
I spoken to a friend of my wifes father (an old school local mortgage broker) he is very busy but seemed to go along with option b) again I am concerned about when the underwriter wants to know my employment status they will get cold feet.
I did some research on contractor websites and was pointed towards a specialised contractor mortgage service company (wont name them on here but one of top search results in google) can PM if required. Called them this morning and the sales patter seemed quite appealing. They have underwriters who look at contractor rate (contract itself) and your CV (employment history) for a "bespoke mortgage" they cover whole of market, and dont charge if you are turned down because you are a contractor. I will let you know how I get on.
The guy also had some good ideas. For example my partner has her own mortgage on a flat. This is rented to her parents for the foreseable (and she lives with me and our child) I sold my house and we wanted to buy together but couldnt because she has her own mortgage. First idea was switch her mortgage to a "buy to let". But her LTV is not great and we doubt we could. However we think we could get in touch with her high street lender and change it to a "consent to let" I know they might hike up the interest rates and ruin this plan. But many just do it for a admin fee of up to £400-500 tops. This would mean we would have no problems getting a joint mortgage and the house of our dreams.. if anyone knows anything about "consent to let" please let me know! :beer:0 -
I'm sorry you dont have 2 years accounts the computer says NO you cant have a mortgage goodbye.
And now you see the truth behind all the bank's reassurances of how keen they are to lend following the tax payer bailout.
You will need to go to a specialist mortgage lender who accepts contractors. They do exist and their rates are competitive enough but your choices as a self employed person are limited.0 -
"bank's reassurances of how keen they are to lend following the tax payer bailout"
Agree, although in fairness I dont think anyone bailed out alliance and leicester/santander, however they dont mind sitting on about 20k of my companies money all year making interest, as well as my own current account and savings account. I would have thought they might be more "flexible" when it came to giving me a mortgage.
I would prefer a return to proper bank managers you can meet and explain your individual situation which they then decide rather than inflexible computer algorithms.0
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