Self Employed and Employed help!!!!!!!!!!FTB's

trombonewill

My partner and I are hoping to get onto the property ladder. We are both musicians/teachers and heve decided to go straight to a detached house in order not to annoy any more neighbours, and to avoid moving costs in a couple of years time. We have no problems saving money or paying our rent at the moment. The problem is we teach in a number of schools where we are self employed for some and payed through P.A.Y.E for the others. This means we have no fixed hours of work for the employed, even though we are better off as this part provides a pension. We also will have only one year of accounts which show a decent income. Our accountant has offered to write a letter stating how much our entire incomes are and we have a very good credit rating.

We Have found 2 lenders which look ideal, as they have high income multiples and want to see only limited years of accounts.. These are Alliance and Leicester, and Abbey (I know these are both Santader). We are looking to buy at £205,000 and currently have a 20% deposit, although at a push in September we could stretch to 25%

Has anyone had experience trying to prove income and succeeded?

Any advice would be appreciated.

Simon_gloster

In months gone by you would not have had a problem.

The main thing is that if you can prove your income. It seems so, however you do not have sufficient number of years in terms of book. Min 2 years generally. This would be an automatic decline in for Abbey and A&L (and C&G, Nationwide etc).

I understand on Platfrom do self cert mortgages at the moment. I can't access their site at the moment and would imagine their rates high. but then again if they are one of a handful of lenders in the UK to help you beggars can't be choosers.

trombonewill

Thanks Simon,

We can provide 2 years accounts, only it comes to a joint income of £32k , I'm led to believe that this could be ok with Abbey but they reduce the lending multiples to 4x for anything less than a 25% deposit.

Simon_gloster

£32K joint sounds low for the mortgage you need even on affordability based lending. If you have provable employed income on top of this then you should be OK. It seesm quite complicated as if you are using employed and self employed income. It You would need to declare which one is the main earner (ie employed of self emp) and HOPE that the underwriters take 100% of all your income and not 100% of self employed and 50% of employed.

Abbey have turned the screw on their credit scoring systems so I would be cautious if I were you.

Spangled

My wife and I were in a similar boat last year when we were remortgaging to HSBC. We each earn from a variety of sources: PAYE, self-employed income and company dividends. HSBC were happy with an accountant's letter for each of us verifying amounts earned from each income stream for the last three years. although they did also want to see my company's books too as the majority of my income was from that source. We also bank with HSBC and they went through our current and savings accounts in some detail, asking about various payments we had made and various standing orders. Hope that helps.

herbiesjp

WHat is your PAYE income?
What is your partner's PAYE income?
What is your NET profit in the two years accounts you have?
What is your partner's NET profit in the two years accounts she has?

Do you have any other debts in the background?

Do you both have a good credit history?

trombonewill

My income
08/09 PAYE 13,752 Self Employed net 5000

07/08 PAYE 13793 Self Employed net loss 500

Partners

08/09 PAYE 1814 Self Employed net 20,000

07/08 Self Employed only 13,496

I was told that Abbey would not take account of my net loss as it was a start up year.

herbiesjp

This does look possible.

Especially at the 75% LTV level

And at 75% you would have far more options available to you, and more competitive rates.

If you are going it alone, be careful to explain your income -as already stated different lenders take different amounts into account, whilst other will take 100% of the income into account

You may want to go via a whole of market adviser, if only to take away the headache of discussing your scenario over and over again with various lenders, whose criteria you may not fit in the first place