Help needed getting a self cert mortgage

NPowerUser

I am self employed and taking the general rule of thumb, using my past 3 years self assessment tax returns, my income has been fairly low.

The reason for my low income is that I have basically been working hours to suit.
I paid off my mortgage in full 2 and half years ago so I have been working as and when I want to. If I have an unexpected bill, I worked more hours and less when I didn't need to. It made me a bit lazy and I had high expenses in the first few years but I have always made mortgage payments on time in the past.

Can someone out there put me in touch or recommend someone that can help me get a mortgage by self cert if necessay?

I an 46 years old, I would like to borrow £43,500 over 18 years. I would be looking to pay up to £350 a month if possible.

The property I am interested in is worth £173,500 and I would plough 100% of the proceeds of the sale of my property £130,000 into the new home. My loan to value would be pretty good for a prospective lender.

Ideally, no upfront fees but payment via commission based on my early mortgage payments to the lender.

Anyone that can help it would be appreciated.

herbiesjp

What have been your NET profits for the last 3 years?

You hopefully will not need to get a self cert as at that level lenders tend to be more generous with their multiples.

NPowerUser

2005/2006 Turnover 14,981, less expenses 8,248, net profit 6,733

2006/2007 Turnover 13,873 less expenses 7,479, net profit 6,394

2007/2008 Turnover 13,997 less expenses 7,962, net profit 6,035

I do not have any audited accounts to back this up but all the above has been declared via self assessment and if need be, I can obtain a statement
from the Inland Revenue to verify this.
Income for 2008/2009 is likely to be comparable with the past 3 years and from 6th April 2009 (tax year 2009/2010) my income is likely to be based on
turnover of over £20,000 and net income in the region of £12,000
The reason for the 2009/2010 increase, working more hours and claiming less in the way of expenses.

Wanting to borrow £43,500 you can see why I want to move away from using my old level of income. When you don't have to find any mortgage payments it makes you lazy and my earnings for the past 3 years are low because of this.

I was hoping that where any prospective lender was only having to fund around 25% of the new homes value, it would make it less of a risk?

Conrad

You have to declare your income on an application. Usually 2 or 3 years figures.

The true self cert deals out there have higher rates from 5%.
A broker takes many risks by conducting such business, for a start he has to confirm affordabiliy based on evidence, not hopes and plans. Big depsoits have no relevance in terms of suitability or responsible lending.

The commission on you mortgage for broker after tax, will be about £90. Thats before expenses.

HelpWhereIcan

You have no need to self cert - you can prove your income, it's just not enough and has been 'optimised' for tax.

Your best option would be to try and use alender who will accept a projection of your income prepared by an accountant who will have had the opportunity to look at your previous figures from full time years and work out how achieveable your expectations are.

e.g if for the last 2 months you have been working extra hours knowing that you need to pick up a bit more work to pay your expected mortgage an accountant will be able to project that income over a full year to work out your increased income level.

I had a client who was in a similar position. He was able to show his accountant evidence of a council contract he had won and the accountant was able to do a projection using the contract as the explanation for the large increase and the lender accepted it.

There are lenders that will allow that and, although it could mean delaying things for a while and paying for an accountant to prepare it all for you it will be infinitely preferable to the rate you get on a self cert or taking the risk on lying on a fasttrack application and being caught

NPowerUser

If anyone can point me in the direction of the self cert route, it would be appreciated.

Short term I might be paying through the nose, but when you compare to say renting, I am still quids in. Some weeks I earn £350, other weeks £500, so finding the mortgage payments would not be a problem.

Good chance of saving £3K - £5K over the next 3 months and I have already paid all of next years council tax bill (£1107.18).

So any self cert brokers out there, let me know how I can go about things.