Refused a 10% mortgage!

freteval

Need to seek some advise.
Having been made redundant 18 months ago i decided to set up my own business and become self employed. I have not been trading a full year yet so do not have 12 months accountants figures.

We have decided to downsize from our large house and get rid of a large mortgage and the running cost of a bigger house.

I have seen a house for £240,000 and have £220,000 in cash to put down so want a loan/mortgage of just £20,000.

i am not in arrears, have no bad debts or outstanding loans.

imagine my surprise when no one will consider lending me £20,000 ie a 10% loan. Where the hell is the risk to the lender.

any thoughts from anyone out there.

Thanks in advance

ViolaLass

Presumably based on the fact that you have no income history in your new job.

freteval

yes thats corrrect.

was told to try again in 6 months time. however if i had started a new job 6 months ago and was earning £7,000 a year i could of got a £20,000 mortgage even if i might of been made redundant soon after taking the morgage out.

where as i can show income to the business in past 9 months in excess of £20,000

the banking world really is mad

ViolaLass

Being self employed is a lot less secure than being employed. Even if you were made redundant, you would get a payout.

And it's 'could have'.

Thrugelmir

freteval wrote: »

however if i had started a new job 6 months ago and was earning £7,000 a year i could of got a £20,000 mortgage

Unlikely as a £7k salary wouldn't be considered a wage on which to pay household bills and living expenses let alone support a mortgage.

TAF

IF i were in your boots i'd buy a house for 220k and forget mortgage!
But if you really like this 240k house go see a mortgage broker. I had been self employed for a under a year (jun - april) and got offered a 92k mortgage. Broker told me bank will want a letter from your accountant with a 2 year forecast... should be sufficient.

mcc100

TAF wrote: »

IF i were in your boots i'd buy a house for 220k and forget mortgage!
But if you really like this 240k house go see a mortgage broker.

Better still, if you really like this house put in an offer of 220k ......

Gromitt

mcc100 wrote: »

Better still, if you really like this house put in an offer of 220k ......

Some vendors prefer people with mortgages than cash buyers. Cash buyers can pull out at any time (the day before exchange of contracts for example), where people who have just had the mortgage agreed are less likely to (apparently).

leveller2911

ViolaLass wrote: »

Being self employed is a lot less secure than being employed. Even if you were made redundant, you would get a payout.

And it's 'could have'.

So someone who has been self employed for 25yrs is less secure than someone who has been employed for 2yrs?........

Being employed now has little security until they have built up years of service and anyone who has been self employed for years will be driven and are pro-active in finding work and in many cases customers go to them after years of networking and building up a clientel.

Personally I wouldn't feel secure in any job at the moment unless your an undertaker, Bailiff, Loan shark or MP.....

ViolaLass

leveller2911 wrote: »

So someone who has been self employed for 25yrs is less secure than someone who has been employed for 2yrs?

Not necessarily, obviously, but that's not the comparison we're dealing with in this thread. 6 months in a job or 6 months self-employed - there's an obvious clear difference in security.

leveller2911

ViolaLass wrote: »

Not necessarily, obviously, but that's not the comparison we're dealing with in this thread. 6 months in a job or 6 months self-employed - there's an obvious clear difference in security.

In what way? someone who has been employed for 6 months has no job security they can be given notice to leave with no redundancy.

My point is unless an employee has years of service they won't qualify for redundancy , yes they have to be given notice but that can be as little as 2 weeks.......

With regards to mortgages I have known more than a few employed people over the years who have taken on mortgages only to be laid off within weeks or months , when your self employed you know personally how much work you have on and plan accordingly.