Halifax Mortgage-Self Employed-Proof of Income

indielad

I've been self employed for 2 years now, and after careful saving I've managed to put forward a deposit of £24,000, which is 20% of the value of the property I've made an offer on, and requested an LTV of 80%.

First , I made an application with Santander, who gave me an AIP the same day, though my business has been really doing well, I projected a loss of £4,500 in year 1 and a gain of £29,000 in year 2 using my tax forms. The mortgage advisor convinced me that the underwriters would use the latter figure to work out what i could borrow, but after 10 days fretting, ignored phone calls, and chasing up , I was told the underwriters would only average the figures and would only lend me £65,000

I have now made an application with Halifax, who have provided a better customer service after all, and asked me to send an accountants statement with 2 years figues and a projection. With these figures.

Year 1 5167 K
Year 2 26017 K
Year 3 28600 K (Projection)

Have any other self employed customers been in a similar situation? I guess the worst case scenario is that Halifax do what Santander do and average the lower 2 figures. I'm hoping Halifax will be more open minded and take the highest figures (either year 2 or the projection year) as its most recent, and showing a steady rise, my accountant actually projected a net profit of £45,000 but made a more conservative figure as he thinks a steady rise is more likely to be approved than any sudden jumps. My credit score is quite good at the moment 813 and no CCJs or missed payments showing.

harvey115

You need a broker rather then going direct, brokers can check with underwriters before placing an application.

Having said that, almost all banks would look at the average from the profits.

The_J

Halifax will probably be your best bet here. Most other lenders, at this LTV, will ignore the projection and work off the average of the last 2 years.

My advice would have been to get the second years figures in the bag, save up an extra 5% deposit and buy somewhere then. Bit too late for that I imagine.

Conrad

Halifax will also take an average where the jump is very large from one year to next and they ignore projections apart from in certain rare cases.


This can be done but only a skilled experienced broker should be approached. Be aware the bulk of them are inexperienced, often having recently joined the business thinking it was a good way to make a living. Especially be wary of those that early on focus on selling you life insurance, thats a sure sign they don;t know what they are doing (good brokers get the clients primary objective fully dealt with first as they don't want to waste time on other issues unless the primary objective is going to be delivered).


Regards.

indielad

harvey115 wrote: »

You need a broker rather then going direct, brokers can check with underwriters before placing an application.

Having said that, almost all banks would look at the average from the profits.

I went to a broker originally 3 months ago, I failed credit checks due to not being on the electoral roll, but he suggested instead to obtain credit cards, buy lots of stuff and pay it off. He said not being on the electoral roll wouldn't make a difference, but I registered then passed all the credit checks for Santander. So lost faith in him.

indielad

harvey115 wrote: »

You need a broker rather then going direct, brokers can check with underwriters before placing an application.

I did go with a broker originaly, and got lots of bad advice, he said to go with Santander as my only option (which was wrong) and he stated I failed their credit checks and suggested I obtain a lot of credit cards , buy a lot of things, and pay it off to raise my score, when I got a credit report it showed I wasn't on the electoral roll but no CCJs or missed payments. The broker said this couldn't be the only reason, but when I registered on the electoral roll i was soon offered an AIP off Santander by going direct

opinions4u

He said not being on the electoral roll wouldn't make a difference

It makes a massive difference to all the credit scoring systems I've ever worked with.

indielad

harvey115 wrote: »

You need a broker rather then going direct, brokers can check with underwriters before placing an application.

Having said that, almost all banks would look at the average from the profits.

These are net profits, The gross profits for Year 1 are £46,000 and Year 2 £50,000 and projected £60,000. If Halifax average those I would be more than OK, if they average the 2 lower net figures I'm short of my mortgage by £13,000

So Im taking home over £500 a week, I have no kids or financial commitments, and have a large backlog of stock to sell,its so frustrating banks don't think I can afford a £125 a week mortgage. There is some stability in being self employed in that I can't fire myself!

The_J

Gross profits are irrelevant.

indielad

opinions4u wrote: »

It makes a massive difference to all the credit scoring systems I've ever worked with.

I know, that's why I lost faith in him. I think he was just one of those type of people who don't like being corrected.

The_J

indielad wrote: »

I know, that's why I lost faith in him. I think he was just one of those type of people who don't like being corrected.

No, he's a retard. Find a decent broker.