Self employed mortgages

Laurencek

Any one got any ideas where's best I have tried a few places but then don't bother even calling back,

Problem is I have 2 jobs both self employed even though the money is quite resionable seems to be quite hard

My partner is currently in training so isn't on great money but goes up every 6 - 12 months for the next 4 years


Job 1 self employed for 7 months ( was paye before in the Same sector)
Job 2 self employed 18 months (smaller amount of earning)
Any one in the same situation and managed to get one

holly_hobby

Are your 2 positions easily sustainable in tandem ? Are they in the same field ? Did you have any previous experience within the field before going self employed ?

These are all questions an underwriter will look at, they want to see if you are relying upon 2 incomes, that they are both from longterm sustainable sources i.e if you have a day and a night job an uw may well decide that this is not a sustainable longterm situation, which I am sure you can understand if looking at it from their ponit of view.

You length of trading is also a little low for mortgage purposes, unless you have previous experience in the field, or you have simply gone from employed to self employed with the same company ? An underwriter will look at this, and also your audited books (HMRC submission), plus if you can demonstrate longterm contracts you have secured, etc, etc. (in essence you want to present to him the best business plan you can, showing how you believe the business and your income to be sustainable and developing for the long term.

Have you approached your own personal bankers, or your corporate bankers - as they already have a relationship with you, I would suggest that this would be the first place to start in a non-standard situation such as you have here.

Alternatively, have you sat down and had a chat with a broker ? They will be able to advise of their local connections whom may be able to help, which will depend upon the deposit you have, your credit status and how well the broker can present the case to the lenders underwriters.

Obviously the larger the depost, and less percieved exposure the lender has, the more chance you have of a successful application - but there are limits and set criteria within which the lender can not deviate - but if you don't try you don't know, but I do suggest professional broker assistance, whom will not only do their upmost to source a suitable lender, but will also support you throughout the whole application process.

If you are turned down, not to worry, keep renting, build another year or so of your deposit, business and demonstrated income, and try again ... best not to put too much pressure on yourself whilst your business is a little young !

Hope this helps & good luck

Holly x

Laurencek

Yes had previous experience before hand on job 1 of about 7 years previously paye ( electrician)

I went self employed totally separate from the last company but in the 7 months I earned nearly as much so far as I used to a year,

I got the number for the mortgage lady at nationwide who I bank with which I will call next week.

yeah as you said no point rushing still plenty of time.

Thanks for your help

L

koexelek

Laurencek wrote: »

Job 1 self employed for 7 months ( was paye before in the Same sector)

Until you have been trading for at least 12 months, most lenders will view you as unemployed

property.advert

You will undoubtedly come up against the conundrum of declared profits versus real world earnings.

In real life, companies and the self employed seek to reduce their declared income and consequent tax bill by all manner of legal means, which usually involves stating a taxable income less than would otherwise be the case.

Just to give you a simple example of the stupidity: if you are self employed, you can reduce your official profit by the cost of some travel to work and clothing which is much harder or impossible to claim for when PAYE. Thus, in reality, on this point the self employed person is financially better off than their PAYE compatriot but because this is an expense which reduces profits, it counts negatively against any mortgage calculator.

Preferring PAYE is also a hark back to a jobs for life era but today, no company is safe and neither is anyone's job. Mortgage people just haven't caught up with the real world.

property.advert

koexelek wrote: »

Until you have been trading for at least 12 months, most lenders will view you as unemployed

Rather a dim outlook wouldn't you say. The tax man and benefits people certainly don't take this view.

Laurencek

Yeah be nice if they did!

Looks like when I have been 12 months it will be the time to start looking give me time to save some more deposit,

Was kind of guessing if leaving paye and going self employed would mess things up massively but to be honest even thought its put getting a house off 6 - 12 months some thing I still don't regret

holly_hobby

Indeed, you will usually pay less tax and NICs being self emp (exc Ltd Co - where its double bubble) , compared to the same income as an employee - as there are many permittable deductions that may be applied to your gross income before declaring net for income tax purposes.

You are certainly in a profession that I would consider longterm secure .... as long as your call out fees aren't too high of course !!

Continued good luck with your business, and future home purchase.

Holly x

Thrugelmir

property.advert wrote: »

You will undoubtedly come up against the conundrum of declared profits versus real world earnings.

In real life, companies and the self employed seek to reduce their declared income and consequent tax bill by all manner of legal means, which usually involves stating a taxable income less than would otherwise be the case.

Just to give you a simple example of the stupidity: if you are self employed, you can reduce your official profit by the cost of some travel to work and clothing which is much harder or impossible to claim for when PAYE. Thus, in reality, on this point the self employed person is financially better off than their PAYE compatriot but because this is an expense which reduces profits, it counts negatively against any mortgage calculator.

Preferring PAYE is also a hark back to a jobs for life era but today, no company is safe and neither is anyone's job. Mortgage people just haven't caught up with the real world.

The myth of self employment. In particular taxation status. No mention of the downsides and risks of being self employed.

Mortgage lenders understand personal finances very well. Better than borrowers themselves. Who tend to view finance through RTG's. The real financial world has changed significantly and fortunately so have lenders.