Morgage advice...Slightly complicated...help please

214jay

My GF has been working as a successful sole trader in the landscape design profession for the last 2 years and has earned well over £20k net profit each year. I currently work for a company in the landscape profession and have been working for the last 7 years.

For some time we have been planning to set up in partnership together (possible as a limited company?) and are hoping to do this around November.

We have around £30k+ (around 25%) deposit for a £125000 house and would be hoping to get a mortgage early next year.

My question is, how will this affect our chances of getting a mortgage? What would a lender take into consideration? Would we be looking to wait sometime to prove we will both continue to earn good salaries?

Thank you! Jay

Conrad

Probably best to stay as you are until the mortgage has completed.

A partnership or limited co is usually tret as a new venture, and therefore your past years income will not be taken into account.

Just in case your'e not aware - net profit is the profit after all costs and deductions - I mention this as in my experience many self employed people think net profit = gross turnover.

214jay

Thanks for your advice. The morgage would likely be in another part of the country so we would not be able to move there until I finish my job. Would we still be able to get a morgage on a house in a different part of the country if I were to temporarily remain in my current job and not live there? We both currently live with our parents so no other outgoings and can afford repayments.

Yes indeed, I am sure many make that mistake, the gross profits are £60k+ and £70k+ for the years of trading but net profit as listed.

Thanks again

214jay

Sorry - to add to the above, my girlfriends business is VAT registered and as a partnership we would still be trading under the same name so would this not be considered still?
Thanks

Thrugelmir

VAT registration is only required when a business has a turnover in excess of the threshold which necessitates it. It gives no indication as to the net profitability of the business. Ultimately its the profit figure which will determine the amount that can be borrowed, as per Conrad's post.