Advice needed, low LTV 1 yrs accounts self employed mortgage?

rkernell

Hi all,

I would like to pick some experienced brains about whether it is going to be possible for me to get a mortgage.

I would like to borrow approx. 40%-55% ltv over 25 years preferably on a flexible mortgage where I could make early repayments without penalty.

My main problem is I only have 1 years worth of accounts as I was living abroad for a 2 year period. My uk accounts start up again May 2010 and I haven't yet filed for 2011-12. I earn approx £30k per year after expenses.

I'm hoping because I have a high deposit that it will be possible with only 1 years accounts or should I wait until I have 2 years accounts to start looking for the property?

Thrugelmir

Nothing to stop you having last years accounts prepared. As your year end date has past.

rkernell

You're right of course, I've just never done it this early before, kinda forgot it was possible not to do it in the last hour on January 31st

Sometimes the obvious is staring you in the face

Conrad

1 or 2 years accounts is a no no for many lenders, but things are possible depending on your exact situation.

Something else to keep in mind is that lenders usually need 3 years UK credit history, so you need a lender that can cope with this in addition to less than 3 years figures.

Low loan to value helps, but none the less will be of zero relevance to the bulk of lenders who simply have bare minimum requirments of 3 years figures and 3 years unbroken UK credit history.

Now some folk may suggest you instead go for a buy to let, and yes that's a possibility but there is a very serious downside in terms of buildings insurance cover in the event a claim is made. Some brokers think the answer is you have 2 insurances, one for B2L the other for normal home owner status, but trust me it ain't that simple when it comes to claiming for lets say a total burn down - insurers aren't stupid and will look to deny a claim where anything is untoward / duplicitous. If you claim on the B2L insurance they would question why no tenants appear on the voters role / credit footprint records for example. If you try to claim on the normal home owner insurance they may well realise you held another insurance and that thiers is thus invalid. Furthermore they may realise at claim that your mortgage was a buy to let and deny the claim on grounds you were not supposed to be living there. An inexperienced broker just wont have any knowledge or experience in this regard.

Try a decent broker - one with lots of experience.

Wh05apk

Most of the larger lenders will be happy with 2 years accounts, especially given your low LTV, lack of "trace-ability" due to being overseas should be ok, given you have 2 years history here.

How much are you looking for?

rkernell

I'm looking for around £80-$120k, with a £100k deposit (could increase dep. to £120k if needed).

With the credit history, although I was paying my tax abroad I still maintained my bank account in the UK, paid off a £20k loan (5 years monthly payments) and ran my UK credit cards (have had use but clear now), so I'm hoping my credit score will be very good.

Out of interest, if you know, what is the maximum I could borrow? I am single, no dependents or outgoings atm and have a clean credit record. I was assuming 4x yearly net profit would be the max (£120k)?

I'm only interested in a residential mortage as I intend to live there.

Wh05apk

You would probably get 4-5x the average of your last 2 years net profit.

holly_hobby

Sterling_Mortgages wrote: »

I agree with Wh05apk - there are some lenders out there that will do this case due to the low LTV.

I'm not sure about Conrad's post re the BTL. You can and should only get a BTL if you intend to put tenants into the property. If you are a first time buyer, you would struggle to get a BTL anyway.

Speak to a local broker and get advice.

Good luck!!!

Yes - this appears to be a speciality of some in (quite wrongly) suggesting BTLs to those who otherwise wouldn't qualify for a resi. mge

And you are quite correct Sterling, its a fraudulent app and if/when the lender finds out, at very best they will require the mortgagor to be assessed for a resi mge, and if he doesn't fit, redemption of the loan will be reqd.

Of course by the time this comes, he may have sufficient accounts and income, but could still be thrown off due to the fraudulent nature of the original app. or non-disclosure of status (if he claims that although he intended to let, he couldn't find a tenant so moved in himself .... they've heard them all before, and will see though it like a pane of glass)

Op needs to stick to the facts, with yourself and W having given the most productive advice to them.

I would also suggest the OP contacting his existing bankers, whom he already has a relationship with, and may be more flexible due to this with their mandate.

Hope this helps

Holly