Made redundant, now self employed - mortgage next year?

TBD

Hi All,

a couple of months ago i was mae redundant as the company i started working for in january was put into recievership, after a couple of months lookng for jobs i have decided that i will be going down the self employed route. This is going well, i am a nutritionist and strength & conditioning coach. Currently i am earning (before tax and NI) approx £2500 per month. I have a basic consultancy contract which pays me £1000 per month, the other £1500 is dependant on gaining new clients/keeping clients on my books etc.

I have also just entered a partnership to open a new supplement shop which should return a wage of around £500 per month, which should open in September.

My goal is to get on the property ladder next year, however i know this going to be hard as i am self employed, i had originally planned to set up a Ltd company and pay a small monthy wage and a yearly dividend, though dont think this will be an option until i have a mortgage in place. i will also have approx 25-35% deposit.

Any advice on how to go about getting a mortgage in my position would be greatly appreciated.

Thanks in advance

fxceltic

hi, good luck with your business.

I would say you might struggle as most banks will want 2 years company accounts, but there will be some out there who are more amenable than others, maybe use a broker to find them.

Failing that get a chartered accountant and find a lender who will accept their reference, which will say you will earn x or whatever.

holly_hobby

Sorry about your redundancy - and good luck with your new self employed venture ... (remember if not done already, you have to register with HMRC within 3 mths of going self employed).

Establilshing a Ltd Co - books are more complex and really do need an accountant to be sure they are completed and submitted correctly.

You don't need a chartered accountant (although I do use one due to their proven professional qualifications, regulations and level of competence).

Tax benefits are achieved in paying a lowish (but NOT too low as to raise a HMRC review) salary, with the rest of your income paid in dividends (which have a lower tax band than income tax on earnings up to a certian level, with no NIC liability - thereby reducing your NIC contributions). But your accountant will know all this, and advise on other tax mitigating measures you make take.

Moving to your mge question .. you would need at least 1 years completed books (i.e signed off and lodged with HMRC) - no lender will accept accountant projections on a start up business which hasn't even completed its 1st yr of business, as there is no proven profits/salary to work with.

Projections may be accepted with 1 yrs good books, and a low LTV.

I don't think even your existing bankers would touch without 1 yr books .. I am sorry and don't want to be negative - but from my professional experience you are a little too early in your new business to be able to prove (from the lenders point of view) your credit worthiness .....

Hope this helps

Holly

TBD

Thanks for the replies, and honesty, it;s what i need to hear as i want to do everything right.

Truth be told i have ran my business on the side for 3 years now, though as i was in uni then full time employment i never registered it/kept accounts, only now that i have found myself redundant have i decided to crack on and make it work for me full time.

I'll speak with a few brokers about putting myself in the best position possible to apply in a couple of years.

Thanks again :-)