Self employed Mortgage - Relationship Split..

tommym_3

Hi Folks,

I'm after some advice.
My partner and I have recently split and we're sorting out the house we both own. It's all friendly (thankfully) but I have some queries and looking for advice from people in similar situation/experience...

We have agreed that I will be pay my partner £15,000 cash if I take on the mortgage and transfer etc to my name - Now i have this money so that is not a problem.. the problem is I'm now self employed. When the mortgage was taken on 18 months ago I was part employed part self employed, but around 12 months ago i went fully self employed.
The mortgage company will offer me a mortgage on my net profit of this years tax ( so i need to wait until April anyway) my problem is... my net profit is low (as a lot of self employed do..) I easily pay the mortgage and wont have a problem paying in future, I've been careful for last few years and have savings just in case works suddenly hits rock bottom. I have a good credit rating too..

'friends' have suggested I fabricate my net profit to get the mortgage... but a) its fraud and b) i believe the government are bringing in systems to check against tax paid etc.. so this isn't really a good idea!

My parents (who own their own house) have said they would come on mortgage or offer any help they could..

I'm really stuck.. I know I can afford it, I have savings to pay partner off yet on current net profit they wont lend me the full amount i need..

The House is valued at around 112k - 82,500k left on mortgage

any advice/suggestions would be wonderful.
Thank you so much,

tommy

InMyDreams

tommym wrote: »

Hi Folks,

my problem is... my net profit is low (as a lot of self employed do..) I easily pay the mortgage and wont have a problem paying in future,

So where is the extra income actually coming from that makes the mortgage so easy to pay (presumably even when rates go up)? What is it that the banks won't take into account?

herbiesjp

A lender will base a mortgage on verifiable income (as well as other things).

So if you have a low verifiable income, the mortgage that will be offered will also be low.

The only way around this is by having a second income - so in this case a guarantor may be able to help.

tommym_3

Well my income per month is roughly £1600..(naturally goes up and down slightly) by the time such allowable expenses as mileage allowance, regular expenses etc are taken out I am left with cash in the bank of roughly £1250 - the mortgage payments (if im taking it all on) are £500pm - by the time other bills/costs I would be paying £790 in total leaving me £460 'in the bank' - I dont have any loans/payments etc..

My business is slowly growing and i estimate that within 24 months my income should increase by roughly 20pc.

I also have a 'flat mate' who is planning on renting a room for £280pm for 9 months..

herbiesjp

Being self employed a lender will want to see not what your monthly income is, but what your NET profit is.

Most will also want 3 years accounts to work from, some will want 2, and only a few will work off of 1 years accounts