FTB not a buyer really but need to get there

smacky

Hello Everyone,

I am glad i have always visited the site which is why i have landed on this forum today.

Like many others i have decided to think about getting a house now

A bit of history
AM self employed since feb 2009
-my annual salary was 37k for last FY (i withdraw profits from my business -in part salary/part dividend)
-this years annual salary is expected to be around 30k
-my partners salary from same business would be around 6 k

Credit history

upon checking experian score turned out to be
300+ last month
450 this month

I have 3 credit cards with a balance of 1000+1.5k &4.5k
Loan of 3600 but only 1200 left

i have 2 late payment s but not on cc, it shows up on my current account and am guessing its when i got overdrawn on my OD 11 months ago

apart from that i have 2 phone contracts and have never missed any payments on all credit accounts and still my score use to be low then someone suggested thats bcoz my cc limits were always utilized at 95%

and hence i paid up all cc debts last month .

we normally do not maintain high balance in personal accounts as we like to use as much funds as possible for business

1>Here's where i need advice, should we have 10k+ balance generally for a year or 2 to secure mortgage or i cud plunge those funds from business just before we decide to apply for mortgage

2>do you think my credit score is low as utilization was high on CC even though havent missed any payments


and what should be my plan for say next 6 months to make sure i can secure mortgage then
1> do i need to keep certain amount of funds for next 6 months
2> also where i live houses are around 250000 and our combined income is not going to be more then 40k for FY ending aprl/2012



Sorry about loads of questions

regards

opinions4u

1) Save lots of money - minimum 10% deposit plus fees ... that's nearly £30k on a £250k property
2) Pay the bills on time, without fail
3) Keep good quality business accounts signed off by an accountant
4) Grow the business and the profitability of the business
5) Be prepared for a long wait.

At present you are short term self employed who has recently operated outside an overdraft limit looking to boorow 5-6 times joint salary - and you don't have enough deposit. You won't be getting a mortgage in the near future.

kingstreet

smacky wrote: »

Hello Everyone,

I am glad i have always visited the site which is why i have landed on this forum today.

Like many others i have decided to think about getting a house now

A bit of history
AM self employed since feb 2009
-my annual salary was 37k for last FY (i withdraw profits from my business -in part salary/part dividend)
-this years annual salary is expected to be around 30k
-my partners salary from same business would be around 6 k

Credit history

upon checking experian score turned out to be
300+ last month
450 this month

I have 3 credit cards with a balance of 1000+1.5k &4.5k
Loan of 3600 but only 1200 left

i have 2 late payment s but not on cc, it shows up on my current account and am guessing its when i got overdrawn on my OD 11 months ago

apart from that i have 2 phone contracts and have never missed any payments on all credit accounts and still my score use to be low then someone suggested thats bcoz my cc limits were always utilized at 95%

and hence i paid up all cc debts last month .

we normally do not maintain high balance in personal accounts as we like to use as much funds as possible for business

1>Here's where i need advice, should we have 10k+ balance generally for a year or 2 to secure mortgage or i cud plunge those funds from business just before we decide to apply for mortgage

2>do you think my credit score is low as utilization was high on CC even though havent missed any payments


and what should be my plan for say next 6 months to make sure i can secure mortgage then
1> do i need to keep certain amount of funds for next 6 months
2> also where i live houses are around 250000 and our combined income is not going to be more then 40k for FY ending aprl/2012



Sorry about loads of questions

regards

Ideally, you need a trading record which includes three years accounts. They need to be accountant prepared and signed, but not audited.

Lenders will ask you to show your regular salary payments and one-off dividends separately. Some lenders treat dividends as non-guaranteed income and only take a portion into account, not the full value.

So you're likely to show a reduction in profits this year if the "salary" is reduced? Lenders will be looking for a three year history of stability if not increasing profitability.

Ignore the daft numbers you get from Experian. They mean nothing in the context of obtaining a mortgage. They don't know many of the answers to questions you put on a mortgage application. People with no job score 999 but would have no hope of a mortgage.

Your existing credit isn't a problem, but the payments you make will be deducted from your income in calculating what you can borrow. The late payments will not help.

The cash balance in the company account is irrelevant.

Your credit score is low due to the late payments and may be because of your card use. It's very difficult to say.

Building up the deposit you will need is all the savings activity you'll need to show. Tellingly, this is the one piece of information you omit from your post. As O4U said, you're going to need 10% deposit and you may find that's not enough if the rest of your profile isn't strong enough to get you over the line for an application to be accepted. On top of that you need to be able to cover the costs and fees involved in buying.

Worth bearing in mind a VERY good, top quality application at 85% loan to value will only get four times joint income. That's going to give you less than £160k when your loan is taken into account.

smacky

Hello ,

Thank for the input.

AS far as deposit is concerned we have about 20k now , but we dont maintain that in personal account as we like to use as much as possible for business at this point in time. and hence my question about maintaining balance was in reference to personal account and not business account

AM sure in next 6 months we can arrange a total of 25k.

About missed payments there have been none in last 4 years apart from those 2 which show on current account and my guess is thats when i got overdrawn on OD and took 3 days to bring it back in limit