Self Employed and My Mortgage

pdarc

Hello:

I was wondering is anyone faced a similar situation I was facing with my mortgage and being self employed...

Work:
I have been in full time employment from 2005
Last September I made a move to set up a LTD company and do freelance consulting which is going really well, steady income which is now bringing home more income into the household than my previous employment.

House:
I bought my home 2007 with a mortgage and now have a LTV of about 20%-25%.

Credit Record:
I run a credit report every couple of years and last time it all came up clear with no defaults or late payments so I think this is fine.

Other Factors:
The only other factor which impacts things is that I bought the house with my wife but she is a student so no other income. But we have no other debt at all, just the mortgage.

What Next:

My mortgage is coming out of its deal next month and it will switch onto the SVR rate which happens to be almost 2% higher.

I've done reading and it seems that it is very important to have 2 or 3 years of verified business accounts for self employed income to be considered by banks for a mortgage.
I've been in business for only 5 months, business is doing good and the pipeline of work is strong but I can understand that the banks may see the limited history as a risk.

Has anyone been in this situation before? Given the low LTV and good credit history would banks have an issue with the self employment based income?
Worst case I will have to put up with the SVR but we are also thinking that we may need to move as our family will be growing soon and we don't have enough space, this means LTV could be 45-50%. I can imagine this will be a bigger challenge!

As a back up I could go back into employment, it would be a shame, work longer hours for less pay but would this be my only option?

I thought I would check with MSE and then talk to banks when I next have time off.

Thanks in advance for the advice.

Gary123456790

Hi,

Can you provide figures of what you earn, how this is broken down (salary/dividends/etc) and house prices?

With just 5 months you will really struggle to move as this will require a new application with fresh affordability checks - remortgaging with the same lender is a lot more likely as you have a repayment history with them.

When I remortgaged with Santander (I was already with them) it was just a case of accepting a new deal and switching over - no employment checks.

I am employed 4 days a week permanently on PAYE but my wife is a self-employed contractor through her own company. She has been doing this 9 months.

I spoke to Santander last night about possibly moving house - they wont take my wife's income in to account at all until she has 1 years accounts and ironically they take the 1 day a week childcare cost off my salary which of course is time my wife works and earns the money that they wont include! I work 4 days to allow her another day to work so my salary is also 20% lower at the moment...

Gary.

kingstreet

Ask your current lender what customer retention products it has to offer and compare them to the follow-on rate.

If you're considering moving, find out the chances of your lender lending to you again before committing to a new product with early repayment penalties.

Until you have at least a year's accounts, your options will be none - severely limited. Ask your existing lender and clearing bank for their views.

pdarc

kingstreet wrote: »

Until you have at least a year's accounts, your options will be none - severely limited.

OK, I understand that if I do go back to employment that will make things easier for a house move. How long would I need to be employed before the banks are satisfied I am properly employed (if that makes sense!)... 6 months?

Thanks again

kingstreet

That would depend on the lender.

If you are thinking of asking your existing lender for a customer retention product you would look to port for a house move, you need to ask them.

Some lenders will process a mortgage application when you have a written job offer, or are in a probationary period. Some won't.

pdarc

Great I will call them now and see what they say.