Mortgage advice on our situation please?!

fprichard

Hi everyone,

I'm not very clued up with regards to mortgages and I was wondering if any of you kind folk could give me a bit of advice regarding our situation.

Basically I earn £33100 gross from a normal 9-5, but am also self-employed freelancer (and have been for 3 years) with last years profit being about £12,500 - although previous years being nowhere near that. My wife is a stay-at-home Mum to our 2 young kids.

The value of our current home is approx £210,000 to £220,000 (depending obviously on sale price), with the remaining mortgage of £83,000. We would like to move to an area where the homes would be in the region of £260,000 to £280,000 in value.

Really, I think the key to all this is my income from self-employment, but articles I've read on t'interweb are a bit confusing.

So, do any of you think we have any chance of achieving this move or should we forget it and stay where we are?
If we have a chance, what sort of mortgage would we realistically be able to get in the current climate - would we be able to get an interest only?
Is it better to go as a sole applicant or joint?

Many thanks in advance for all your kind advice!

Cheers,
Richard

Dave_Ham

Hi Richard,

Everything you are trying to do is possible.

A word of caution on interest only mortgages, the banks have all recently tightened up hugely in this area and it is now very difficult to obtain an interest only mortgage unless you have a robust repayment vehicle that can be proven..

Joint application is fine, although be wary of the Stamp Duty jump at £250k if not already aware...

All the best...

The_J

Is your self employed work in the same line of work as your 9-5?

fprichard

Quick replies!

Thanks Dave, gives me hope!

The_J wrote: »

Is your self employed work in the same line of work as your 9-5?

Sort of, in that they are both computer based - I am a software engineer by day and a web developer by night!

The_J

I am maybe not as confident as Dave.

I presume you need a mortgage of £125k-£155k yes? Have you got any savings to top up your equity or will that be going on stamp duty, solicitors fees and moving costs?

With only 1 years accounts showing a true wage from the s/e income some lenders will not be particularly thrilled. On just the basic borrowing 4-5x income with a dependent wife and 2 kids is tough.

There should definitely be someone out there who will do it, it just may not be the best rate. A definite broker job.

Dave_Ham

Sorry, I saw somewhere that the OP had done this for 3 years and just mentioned last years figure but I assumed there would be 3 years figures.

Still, that said again assumed a high credit score and nothing in the background would still be confident but yes a broker job for sure.

fprichard

Thanks for your replies Dave and The J

I do have 3 years figures, but they are on a drastic upward trend - the first year was a measly £1k, second year was £5500 and, as mentioned, last years was £12,500. The upward trend will slow a little as I reach capacity on my time.

I will be seeing what my existing lender (nationwide) has to offer, but will certainly be approaching a broker too!

I just wanted to gauge opinion on here, so thanks again for your valuable opinions :T

Dave_Ham

Do always talk to existing lender, in your case when trying to stretch income to a tall order Nationwide are not always the most flexible.

Do not be disheartened if they do not lend you enough as there are other options.

Good luck