Mortgage chances?

pumpkin30

Hi all
can anybody tell me our chances of getting a mortage on a property worth £250000 needing mortage for £210000 got combined ccard debt of 20k and personal loan 8k outstanding looking to put our house up for sale when ccard debt down to 5k .should be october (selling caravan 10k soon) just checked experian credit score mine 894 wifes 967
we run our own company last 9 months and have 2 small children been in current address 8 years
joint income at the moment £4200 pmonth before tax

thaks for any help/advise

belfastgirl23

I thought lenders were working on roughly a x3 times annual income multiple for mortgages. Even before you think about anything else, your income of around £50k wouldn't enable you to borrow much more than £150k. Both of you being self employed in the same business would also count against you, particularly when you have only been running it for such a short time. And the other debts are a third strike against you.

I don't think you'd be likely to get that at all, sorry

_Andy_

Given you won't have any accounts I don't think you'll have any chance at that LTV.

Mrs_Bumble

You will need at least 2 years accounts.

pumpkin30

Did think both working for company would go against us (all our eggs in one basket)

just double checked company was formed two months before we started trading so come october will have first years accounts

have been looking at mortages and did think we would need 20-25% deposit the way things are

just out of interest do the credit scores count for anything?

belfastgirl23

pumpkin30 wrote: »

Did think both working for company would go against us (all our eggs in one basket)

just double checked company was formed two months before we started trading so come october will have first years accounts

have been looking at mortages and did think we would need 20-25% deposit the way things are

just out of interest do the credit scores count for anything?

last time we went for a mortgage dh had been self employed for 2.5 years and had turned a reasonable profit after the first year. I had a good and well paying job. and they still asked a lot of questions (even though technically with our last year's combined incomes we were borrowing well under the *3 multiple). I don't think the credit scores counted for anything - no one asked about them. Although I think they did run a check and had they been bad they would have counted :rolleyes: but the fact that they were good didn't.

Mrs_Bumble

The credit scores help support an application but the fact that you are both self employed and don't have 2 years accounts so that they can assess income properly means that they just won't look at lending.

You could maybe approach your own bank who may look at you differently but I doubt it. You will need a deposit and a 20% one will get you a better interest rate.

pumpkin30

thanks mrs bumble

we have banked with hfax 15 years +
and the business is with nwest

natwest are being very helpful as they want our personal banking and mortage business aswell

i mentioned i will look to move business accountant after first years up to get better deal if possible and mentioned we would like both accounts with one bank including new mortage deal

they want us to go and see them as they say they can be flexible to keep the business account with them and could get us a better mortage deal (bend the ltv rules to suit)
not sure if this is a good idea ?
any thoughts?

Mrs_Bumble

Your own bank can basically set its own rules to keep you as a happy customer. They will assess you differently because they have history with you.

My concerns would be

Its a new business and so you have no way of knowing the peaks and troughs and so anything that you take on how will you know if you can afford it?
You have historically had a large amount of unsecured debt will you be able to avoid this in the future?
You have 2 small children are you going to be able to manage large mortgage payments and new business etc?
Is now really the time to take on a large mortgage?
Have you got sufficient savings in the background to fall back on?
Do you employee an accountant at the moment to ensure that you are deducting everything that you can and paying everything that you should?

I will almost guarantee that the bank won't ask you a lot of those questions if any, the bank will be keen for your business but will they be keen to advise you? No in all likelihood a non advised sale that will just help the adviser towards their sales target for the month.

My background is in collections, I am cautious, you know your background and your stability but I would be asking myself long and hard is there enough stability in what we do for a living at present to justify taking on a large mortgage committment?

pumpkin30

the ccard debt will NEVER happen again we have learnt our lesson with ccards

the company is making a profit whilst things are slow so would expect business to only improve

been thinking now is not a sensible time to make this purchase and were not in any need to rush things

may be a better option to sell our house and rent somthing similar to what we want to buy for 6-12 months
by which time banks may of relaxed on mortage deposits a little

and we could look at auction or quick sale needed saving us a large sum of money

Mrs_Bumble

My feeling is that you would be better to wait, get a deposit together, savings etc and be in a good strong position, see how the business is going

A site you might be interested in for later reference is http://www.whitehotproperty.co.uk/?gclid=CKuQkq7q5psCFY4U4wodmTzW6Q
the specialise in chain free properties.

Good luck with the business!