How to get a mortgage

shads1973

Hi Guys N Girls,

Looking for some knowledgeable advice and feedback.

Mission, should I choose to accept (or a good broker)...is to get myself a place in London, bottom end of ambition is a studio flat for around 160k. Its not urgent, so more a case of knowing how best to work myself into a position of when I’m ready to proceed.

Currently self employed, have been for about 6 years, for 4 of those years I ran a ltd company, my accountant done my tax returns. From last year due to drop in income now do self assessment. Following are my tax returns

End Year Apr 11 - 9700
End Year Apr 12 - 16800 (tbc)
End Year Apr 13 - 23000 (est)


I had an IVA, this ran for the full term from 2005 to 2010, it was satisfied, waited another year and by 2011 all details have been removed from my credit file. I’m registered at a friend’s house, and not on the electoral roll.

In terms of trying to make it a possibility I have the following positives

20k savings (adding to this by 1500 per month)

I have a flat that I have a mortgage against, it’s currently rented out. Not had it valued, so a conservative estimate is that it’s worth 120k...the mortgage outstanding is approx 85k.

In an ideal world I'd like to remortgage the flat, and get it into an interest only, that’s more pressing then the flat in London. I've never missed a mortgage payment (before, during or after IVA), but the last time I looked at mortgages was 7 years and had to get a sub prime product, so a lot has changed so hoping to understand what my best ploy would be.

Thanks for listening

Dave_Ham

Everything is possible, although you may need to put a tad more through the business...

What are the terms of the current mortgage in relation to term and rate?

Not sure what part of London you are in, although typically £160k is unusual?

Given your parameters you are right to see a broker...

Good luck

shads1973

Thanks for the feedback.

Current mortgage is the intial mortgage I took out 7 years ago, after the 2 year deal it switched to LIBOR + 1.75%, so this has obviously fluctated a great deal, but at present works out to a good deal

Looking for a place in Tooting/Mitcham/Colliers Wood and slowly heading out of london, as said its bottom end..but its just a place for 2/3 days a week as it wont be my main resisdence.

What sort of multipliers are used at present, so I can evaluate my business figures.

Dave_Ham

Absolute maximum you can achieve is 5 times income..

Might be able to eek out a tad more in rental income if an experienced broker is used, although will not be bundles more...

shads1973

Thanks for the follow up. For self employed people, I've read 2/3 years self assessment is needed, if so is it average/top/bottom figures lenders look at?

Is electoral roll a must?

Dave_Ham

Electoral roll is important, but not a must..

As I said, lender selection will be crucial. Some will take an average, some latest, some another formula....

shads1973

So in theory, if my next tax returns were more favorable and I sold the flat and managed to have a deposit of 50-60k against 150-160k purchase, I might be in a position to be considered?

Dave_Ham

Easy..

You do not need to necessarily sell the flat though, can get that offset against rental income.

shads1973

Thanks for your feedback, great food for thought. Think need to finalize my tax returns before I look at where I'm at.