Getting a mortgage with a partner who is self employed?

Daniyella

Hi me and my partner are looking to get a mortgage he earns about £44k a year and we will have 2 years audited accounts and I earn about £10k a year part time as we have a little girl

His credit rating is around 800 he has £7k on a credit card and our car on finance,
Mine is around 400 with about £1200 of debt ( I was stupid in my younger days)

Do you think we stand a chance of getting a mortgage on the new buy scheme with a 95% mortgage we have £10k deposit on a £200k house

Could my mum guarantee my salary? How does it all work, our mortgage will be a similar amount to our rent that we've paid immaculately with no late payments for 2 years would they look at that?

I'm so excited about getting a new house just worried it could all go wrong? Any ideas??

ACG

With the £1200 debt, i think you may struggle at 95%. Even 90% may be a struggle but we would need to know more about the debt, when it was, was it satisfied and if so when, what was it for.

Also your parents cant guarantee your wages, its the monthly repayments they guarantee but there arnt that many guarantor mortgages on the market.

2 years accounts are fine with some lenders, most prefer 3 but i think your going to need to increase the deposit to around 15% really.

kingstreet

So, to summarise, you're looking for a 95% mortgage, with two years' self-employed evidence of income and have adverse credit registered against you?

With a squeaky clean credit history, the Halifax affordability calculator gives a figure of £197,755 for a "C" pass credit score, so I have my doubts that you'll get a mortgage at such a loan to value and with any adverse credit. If you have no joint financial links, you may find a purchase and mortgage in your partner's sole name is more practical, if a lender will do "newbuy" on two years' accounts.

As newbuy tends to link certain developers, brokers and lenders together, I suggest you speak to the developer to establish your chances.

Daniyella

My mums said she will do all she can to get us the mortgage as we've spent over £20k in rent payments. How does the guarantee the payments work then?

I meant I have £1200 debt now.

We might have more deposit my partners accountant has just submitted his tax return for last year so he will get a tax rebate plus one for next year plus my mum is going to double what we have. His tax rebate could be £5k a year for all we know. Also I am waiting on a personal injury claim going through as I had a car crash and slipped a disc and i am awaiting surgery so could be even more

JimmyTheWig

I'd say concentrate on paying off the debts.
If you do that then you should be in a much better position in a few years time...
* You'll have no debts
* Your OH will have more years of audited accounts
* The "nasties" on your credit file will either be further in the past or, even better, dropped off completely

Daniyella

King street- we have been advised that nationwide, Nat west and Halifax are the mortgage providers that Taylor wimpey use, would my partner get a £190k mortgage by himself though?

kingstreet

Possibly.

Like I say, the developers and lenders are linked together in newbuy, so you'd really need to speak to the developer's agent.

I don't know if they will entertain an application without three years' accounts, but if his net profit is is consistently £44k with £7k of credit card debt, the maximum mortgage is £180,000 on a C pass.

If he gets a higher pass grade, the maximum borrowing is higher. I suggest you have a play around with the lenders' affordability calculators to see what kind of numbers come up.

Worth noting - a guarantor may help to increase the maximum mortgage you can get, but it won't cause a decline to turn into an accept if you don't pass the credit score. As ACG has said, there isn't much appetite for guarantor lending these days, so the issue is likely to be moot.

If you are suggesting you have credit, but not adverse entries such as late/missed payments, defaults or court judgments you should be able to purchase jointly. You really need to speak to the horse's mouth for this. The speculation you'll see on here is probably of limited use to you.

ACG

There are a lot of if's and but's on this.
You need to work out:
- what deposit you have,
- what tax rebates if any your going to get,
- what you will get from your accident,
- what your mum will give you,

Put it all together then you know what your deposit is.

Get both figures for your partners accounts.

Then either we can help or you can go and see a broker, but its all very messy at the minute.

Miss_Havisham

lets turn your questions around.

1. Can you afford to pay off your debits and your mortgage ?
2. can you guarantee your wages and your partners income ?
3. apart from the £10000 deposit do you have enough savings to cover the significant fees and expenses of buying a house and initial set-up costs ?
4.could the surgery result in you not being able to work for a while and thus lose your wages ?
5. would your mum be prepared to lose her home if you were to default and she had to sell it to realise the guarantee ? Are you prepared to let her take this risk ?

Daniyella

Hi everyone thanks for your responses, I;ve just spoken to the mortgage team at Natwest and they have told me that with my partners wages alone if we paid off £2000 of his credit card that they would be able to offer £191k over the 35 years

Well our rent at the moment is £855 a month and we've paid that with no problems for the past 2 and half years and that included when i was on maternity leave too for a year,

My partners wages are pretty much guaranteed as they are absolutely rammed busy with work and are always turning it down.

We have we have at the very least £10k we are expecting approx £5000 tax rebate this year and £3000 next years after april plus my mum is doubling whatever we 'save' Mum has only got 18months left on her mortgage til its paid off, My mum also said we should ask if my partners parents would throw some money in the kitty, and also my father.

After speaking to the Natwest mortgage advisor i am a lot more hopeful that my partners wages should be enough to get the mortgage, we has just had a pay rise as to speak too which will help alot and my wages just pay the bills,

I still get my basic pay of £550 a month whilst i am on sick leave and i will find out the results of my MRI scan on thursday, any compensation i get from my car accident will be buying me some nice new furniture

Daniyella

kingstreet wrote: »

So, to summarise, you're looking for a 95% mortgage, with two years' self-employed evidence of income and have adverse credit registered against you?

With a squeaky clean credit history, the Halifax affordability calculator gives a figure of £197,755 for a "C" pass credit score, so I have my doubts that you'll get a mortgage at such a loan to value and with any adverse credit. If you have no joint financial links, you may find a purchase and mortgage in your partner's sole name is more practical, if a lender will do "newbuy" on two years' accounts.

As newbuy tends to link certain developers, brokers and lenders together, I suggest you speak to the developer to establish your chances.

This sounds like our best option, I Just wondered, what would happen if say my partners dad took a 0% credit card out and put my partners £7000 credit card debt on this for a couple of months would this effect our affordability? Im going to make sure that my partners credit history is squeaky clean for the next few months until after april when we get his 2nd tax rebate and apply for a mortgage and then once we have moved in take his £7000 debt back?