Best self cert mortgage for self employed

TedButler

Can you still get good self cert offers these days?

Being self employed last few years books not so good but Im very confident next few years will be very good and I have large deposit.

I dont mind large deposit but dont want to pay a higher rate because its self cert.

I know they talked about clamping down on self cert, but did it really happen?

handytips

There is no such thing as Self Cert anymore. You will need atleast one years trading accounts and a deposit of 25% or more.

opinions4u

not much profit last year

So what were you planning to self-certify as the profit figure on the mortgage application form? Some made up figure?

Sparks33

I'm in a similar situation. I own my current property outright. I wish to buy a bigger property for the expanding family. I'm self employed but because I've only worked part time in recent years in order to spend quality time with my daughter no one is going to lend me anything on my 4k annual profit!
It's crazy, I can rent my current (mortgage free) property out for 750 a month which can service a sizeable mortgage surely? New property is 200k, I have 80k deposit....
Also own another mortgage free property in Eastern Europe.
Wish I grabbed a self-cert when I had the chance!
Any ideas anyone?

Thrugelmir

Sparks33 wrote: »

Any ideas anyone?

Sell the other properties you have to realise the equity.

How do you intend repaying a mortgage on a £4k annual profit?

MacMickster

Interestingly, an aquaintance in the pub a couple of weeks ago was complaining to anyone who would listen as he was being investigated by HMRC who weren't satisfied with his tax returns.

They had questioned his ability to obtain a large mortgage a few years ago and had demanded a copy of his mortgage application. This was self-cert and showed a much higher profit than his tax returns at he time. HMRC were saying that they would tax him on the profit that he had declared on his mortgage application.

He was adamant that this was not realistic, but his accountant was advising him to do a deal with HMRC as he could hardly go to a court appealing their assessments on the basis that he was honest with HMRC but just defrauding his lender.

Sparks33

Thrugelmir wrote: »

Sell the other properties you have to realise the equity.

How do you intend repaying a mortgage on a £4k annual profit?

Even if I wished to, by the time I sell the other properties the one I wish to buy will certainly be sold, and I'm very specific about the type of property and location here.
If you read and understood my post you will know that I will have £750 a month rent coming in purely to service a mortgage.

I can also up my working hours if necessary. With a self-cert declaring my prospective income all would be fine.

I worked long and hard to repay my original mortgage early, and have a perfect credit history. However, due to someone else's F***UP I'm now not allowed to borrow money...!

MacMickster

Sparks33 wrote: »

Even if I wished to, by the time I sell the other properties the one I wish to buy will certainly be sold, and I'm very specific about the type of property and location here.
If you read and understood my post you will know that I will have £750 a month rent coming in purely to service a mortgage.

No. You will have a maximum of £750 per month rent coming in, less any voids, months in which the tenant decides not to pay and then the costs of getting them out.

Your maximum £9000 rent (assuming property is fully let and there are no maintenance costs) plus your £4000 p.a. profits gives maximum income of £13,000. You want a £120K mortgage - over 9 times gross income. Dream on.

Sparks33

MacMickster wrote: »

No. You will have a maximum of £750 per month rent coming in, less any voids, months in which the tenant decides not to pay and then the costs of getting them out.

Your maximum £9000 rent (assuming property is fully let and there are no maintenance costs) plus your £4000 p.a. profits gives maximum income of £13,000. You want a £120K mortgage - over 9 times gross income. Dream on.

The point is, I have a house worth around 200k with no mortgage. I will then have another house worth around 220k with a 120k mortgage. That leaves me with a net equity of 300k which a mortgage company can get their hands on should I default on my mortgage payments. I don't see this as 'high risk'!
And, as I said, I can decide to work more hours to up my income to around 40k should I need to.

antrobus

MacMickster wrote: »

No. You will have a maximum of £750 per month rent coming in, less any voids, months in which the tenant decides not to pay and then the costs of getting them out.....

.... and less tax. (Depending on personal circumstances of course.)

opinions4u

Sparks33 wrote: »

The point is, I have a house worth around 200k with no mortgage. I will then have another house worth around 220k with a 120k mortgage. That leaves me with a net equity of 300k which a mortgage company can get their hands on should I default on my mortgage payments. I don't see this as 'high risk'!
And, as I said, I can decide to work more hours to up my income to around 40k should I need to.

The point is, a lender advancing a large mortgage based on an income of £4,500 runs the risk of being closed down by the regulator in this day and age.