Self employed, new mortgage advice please...

Bullfighter

retro-spective wrote: »

To me though, its crazy for us, as he is already on the housing ladder at £250k, when that house sells, it's going to be impossible to find anything suitable for £140k ,that would buy us a tiny flat in my area. I just don't get it, his circs are more solid now than ever before business wise.

Is every self employed person struggling to meet the demands? It cant be just us...

Im very angry house prices are so high as it is in my area, its driving people out of the place they grew up.

We will of course carry on renting if the figures dont stack up!

So the gifted deposit is not an option. The other house is likely to stop us anyway, even though our tennants are giving us a £500pm profit, and theres clear equity showing in it? Also the commercial property on the side of the place we like, you cant split the mortgage? Part residential part commercial? No?

Sorry im just going through all the details now so I can tell my partner later. How stressful.

Wait. You will see £150k 3 bed semis in desirable suburban locations in no time at all.

The market is crashing. If you want reassurance check the land registry for the sale price in 2000. We are headed back there (with a wicked overshoot).

Or, you could just borrow at unrealistic multiples, on a liar loan and hope that the housing market and interest rates defy both fundamentals and logic for a few more years...

FraudBuster

A £285 house is simply not going to happen.

But, but, but ............

It is a £325k house.

(its on for £325)

retro-spective

Its on for £325, but I have been told by the agent they will sell for what they bought it for in 07 which was £284, as their business has already relocated and the house they have on hold will fall through very soon.

So do people think we are having a crash again? I seriously cannot see houses here being greatly affected tho. They have been pretty stable overall around here, just slower to sell.

beecher2

retro-spective wrote: »

To me though, its crazy for us, as he is already on the housing ladder at £250k, when that house sells, it's going to be impossible to find anything suitable for £140k ,that would buy us a tiny flat in my area. I just don't get it, his circs are more solid now than ever before business wise.
.

I'm not sure what you expect when the books say that your partner earns £26 - 30k. I take it that the figures are low in order to avoid paying tax - this is the downside of doing so I guess.

Can't you build up your own credit file and use your earnings too? Meanwhile save as much as you can - from what you say it sounds like you have a lot more than 30k coming in so it shouldn't be too hard. Go onto the Debt Free Wannabee forums for help in cutting back on household expenditure and increasing income.

retro-spective

We dont have huge amounts of cash, its all tied up in property, his earnings are a bit more, but with so many tax deductables on his accounts I think it comes in less, but not hugely. We dont have loads of spare cash, I am studying a degree so cant contribute, plus we have children.

What Im baffled by is suddenly we are expected to sell a house worth twice what we can now buy as a replacement. He never struggled paying the previous mortgage, infact its half the price of what we pay in rent right now.

I sound stupid im sure, but we need a family home, and cant really see how thats achievable now, or even in the future.

retro-spective

We have no debt, credit cards loans etc, and are already as low as possible on expenditure, my food shopping etc. We live very frugally so we could save as much as possible. The issue isn't really saving, as his income is still going to restrict us regardless it sounds.

Bullfighter

retro-spective wrote: »

So do people think we are having a crash again?

I understand that the media have been talking about a recovery. But there is no such thing.

The government has pumped almost (1 trillion) into the UK economy and yet we still have almost 10% unemployment and one of the weakest economies in the world.

The crash hasn't even happened yet. Gordon Brown had a plan to win the last election by delaying the inevitable crash through printing massive amounts of money and propping up blatantly insolvent banks. His gamble didn't pay off (he lost) and his delaying tactic has barely lasted until now. 2010/11 will see the biggest drop in property (residential and commercial) in the last 70 years.

If interest rates only fell back to the 30 year average of 6-8%, could you still afford the mortgage then?

I say if you are proposing to buy a house with cash to be your family home for the next 30 years, then bravo. If you intend to become massively over-leveraged and buy a home at the top of the market in the worst economic cycle since at least WW2 then... good luck.

retro-spective

Thank you for that very sound advice Bullfighter. I honestly thought we were recovering! We were very worried about property as we thought if we didn't buy very soon we would be priced even further out of the market.

I have seen a bargain property on Rightmove just now in my village. We viewed it at £215, its now on for offers over £170, so maybe you are right...?

We could afford a higher interest rate if/when it happens, I have done calcs online, its not so much affording it, its the case of showing we aren't a risk and maxing ourselves. My partner is a very careful person finacially, methodical, and has spreadsheets printed up with our monthly outgoings etc on, he would never take something on that was unaffordable, he is a really hard worker too. (too much for my liking )

retro-spective

Ive just found the debate board, some interesting stuff about house prices over there, looks like we will carry on saving and hang tight! :beer:

xyellowx

with that company turn over i would say keep renting and saving
you have bad credit and he is S/E 30k accounts 26k last year and you may have a 20k deposit subject to him selling a business

you have no chance of a 285k motgage and probably only a slim chance of the 140k tiny flat you scoff at ( its a bad time to be getting a mortgage banks are being very carefull and the phrases "bad credit" and "self employed" will make them run a mile )
you may get acepted by another finance company but they will charge very high rates and are best stayed clear of