22 yrs old & Self Employed - Mortgage advice.

Daniel172

Hi there,

I am 22 years old, self employed (business has been going strong for 10 months now), and currently making £20k profit a year.

My fiance and I are looking to get a place (around the £120k mark) of our own (end of 2014/start of 2015) , and will have £40k to put down as a deposit. We will both be 23 years old - & my business will have been running for 2.5/3 years by then.

(My partner has a salary of around £8000 through employment)

What chance do we have of getting a mortgage? - Even if we have to wait longer...

~

I appreciate there are mortgage advisers out there who could help me but I don't want to waste there time considering I'm thinking 2 or 3 years ahead of myself here!

So I'd really appreciate any advice.

Thanks guys,
Daniel.

Kayalana99

Hiya Im pretty sure most mortage companies want at least 3 years paperwork to prove your income is steady being self employed.

holly_hobby

Yes, generally you'll need a couple of yrs books (or SA302s) for the lender to consider your income.

Hope this helps

Holly

chrisfurbs

Tosh, Halifax take one years books and are generous and a few other lenders take two years so you'll be fine

ACG

You can get a mortgage after trading for 6 months so long as you have bank statements to support it and a decent enough deposit.

You should be fine though going off what you say.

holly_hobby

chrisfurbs wrote: »

Tosh, Halifax take one years books and are generous and a few other lenders take two years so you'll be fine

Not quite ...

Lifted from Halifaxs own Intermediay Site ..


Self Employed

We require verification of 3 years income by way of SA302s, accountants reference or accounts.

For limited companies we use the combined figures of dividends plus salary drawn. Acceptable proof of income - last 3 year's tax assessments i.e. SA302s.

Let_Us_See

As any mortgage broker will confirm, what a lender says and what they will actually allow is often very different. Halifax, and other lenders, will certainly accept applications from self-employed with only one year accounts. Not all are successful, but many are.

holly_hobby

holly_hobby wrote: »

Not quite ...

Lifted from Halifaxs own Intermediay Site ..

Self Employed

We require verification of 3 years income by way of SA302s, accountants reference or accounts.

For limited companies we use the combined figures of dividends plus salary drawn. Acceptable proof of income - last 3 year's tax assessments i.e. SA302s.

Let_Us_See wrote: »

As any mortgage broker will confirm, what a lender says and what they will actually allow is often very different. Halifax, and other lenders, will certainly accept applications from self-employed with only one year accounts. Not all are successful, but many are.

What you are actually eluding to is lending under mandate, typically considered under 75% LTV and/or in circs where the individual has stayed in the same industry/role, with essentially just a change from PAYE to SA302.

What I'm saying is 12 mths accounts or less is NOT standard criteria (apart from contractors whose SE status is slightly different to a std SE individual/sole trader), as clearly demonstrated in Halifax's own published 3 yr criteria noted above (which was specifically referred to). And to imply otherwise is simply in-accurate and misleading.

Now I hope, like all, that he can secure a mge with low books (if reqd as I believe its just a general enq at the moment), but as stated in my original reply, post 75% a min 2 yrs accts/SA302s are generally the standard mean criteria for SE (non-contracting) individuals (notwithstanding any sub- MIG mandate decision & continuation in the same industry). Which is confirmed as std criteria (when taking a broad market assessment of BS, Banks & non scoring lenders) by the likes of Nationwide, Nat West, and when sampling an alternative non-scoring lender, IBS.

Hope this helps ...

Holly

morganedge

what sort of business do you run?

Let_Us_See

" And to imply otherwise is simply in-accurate and misleading?" Oh dear, that is the difference between theory and practice. Further, I am not eluding to anything, but merely answering the simple and very straightforward OP.

As previously stated the Halifax (plus other lenders) is willing to consider a mortgage application with only one year accounts and I am certain brokers will confirm this point - not anecdotal, simply a fact. Thankfully, as I am sure all will agree, mortgage advice entails a little more than just reading the lender's published criteria, and knowledge of "alternative lending options" is a very important part of an experienced broker's armoury.

holly_hobby

Yes dear ...

Yes dear ... Been in mges 20 odd yrs ... so my advice is based on actual experience and not that of an armchair adviser who has learnt a little by reading others posts.

12 mths accounts or trading for less for a new business start up - no chance .... unless ridiculously low LTV/prev experience mandate based decision, or contractor (12 mths) as I've discussed.

Holly