Mortgage nightmare!

tkitmike

Hi Everyone,

I'm having a real nightmare with getting a mortgage at the moment.

As I'm a sole trader, they require 2 years accounts (prefer 3) - Whilst I have got two years financial year accounts, I have only been trading for 20 months.

I'm contemplating asking my broker and speaking to my Dad to see if he could be a guarantor - However, I wondered what your thoughts were on this, does it affect your application, credit rating - or is it simply a backup for the mortgage company?

What's really annoying, is the mortgage is £350 per month - I could earn that with a part-time bar job and they still refuse it :-(

luckyfool

What is it you do now? What is it you did before you became self employed? If you are in the same line of work then there are lenders that will consider you with 1 yrs full accounts plus a projection.
If its not the same line of work there is still at least 1 lender who might consider it with 1 yr plus projection, though you would likely be paying a slight premium on the rate to reflect the higher risk.

tkitmike

Hi Luckyfool,

Thanks for your comments. I was actually at college prior to starting my IT business which I'm running now.

I wouldn't mind paying a slight premium, but I can't seem to find any mortgage suppliers, that are interested! - It seems the market isn't working in my favour

GMS

tkitmike wrote: »

Hi Luckyfool,

Thanks for your comments. I was actually at college prior to starting my IT business which I'm running now.

I wouldn't mind paying a slight premium, but I can't seem to find any mortgage suppliers, that are interested! - It seems the market isn't working in my favour

You will not find a lender direct. There is a lender who would look at your application but you would need access through a broker.

What loan amount are you looking for and what deposit do you have? What is the purchase price?

This is not a broker sales speech by the way.

Get yourself in touch with a 'Whole of Market, broker asap. It would be helpful if you could request copies of your credit search from Experian and Equifax. £2 per report for a statutory one.

Good luck

Joe_Bloggs

@tkitmike
Do you have a deposit saved up ?
J_B.

tkitmike

Hi there,

Yes I have in the region of £27k saved up, by the time the property is built hopefully £30k

The property value is just over £95k

So Loan to Value is quite good!

Thrugelmir

If you haven't got a mortgage how do you know it'll only cost £350?

There's far more costs involved in property ownswership than just the mortgage.

luckyfool

IT .... are you an IT Contractor with a daily rate and medium/long term contracts? If that is the case there can be lenders who will consider working from the gross value of the contract rather than dealing with it as a pure self employed case.

What do your 1 yrs finalised accounts actually show in terms of your drawings. The specialist "self employed" lender that will run with one yrs accounts does have a minimum income of £18k. They also have a minimum valuation of £90k and loan of £25k. In terms of the property you would be just squeezing in over the wire.

tkitmike

Income on last years accounts was just over £22k

By £350 I'm talking about the 2 year fix mortgage rate was working out at per month.

I'm an IT contractor, have several contracts with big name organisations, contracts range from 1 year to 5 years in some cases.

Thrugelmir

tkitmike wrote: »

I'm an IT contractor, have several contracts with big name organisations, contracts range from 1 year to 5 years in some cases.

Do these contracts guarantee you days of work at a given rate of pay?

The 5 year contract must have some very defined clauses and conditions.

tkitmike

Hi,

Yes the contracts are for monthly support - outsourced IT help desk essentially.

I also have two contracts which guarantee a number of days work per month at a rate of pay that's double the mortgage amount.