Self Employed joint mortgages?

PrincessJR

Hi,

My Husband is self employed, although has worked for the same company for 5 years (he is basically like an employee with full time hours, he just invoices them his own rate each month). I am employed with a salary of £30k.

My Husbands salary works out at £40k, but as he's self employed are we likely to struggle to get a mortgage?

We got our first mortgage when he was an Employee earning £25k and I was earning £18k, so although we earnt less, we were both 'Employed'.

Is it a good idea to appoint a broker when one or both of you are self employed?

ACG

This is something you could probably do yourself, but to save you time it could be worth speaking to a broker. I dont think you will have too many problems getting a mortgage.

PrincessJR

thank you for the reply.

After doing some research just, it seems our biggest problem will be the fact that my husband only went self employed 3 months ago. He is still contracting for the same employer he was with as an employee, so technically has been with them 6 years?

If lenders expect 3 years bank statements his will show his old salary of £25k up until a few months ago when he became self employed on £40k.

Are lenders likely to only assess him on the basis of his old employed salary of £25k?

ACG

Ah, sorry. You didnt say it only switched over 3 months ago.

In that case this probably is one for a broker. Alternatively you could speak to your existing lender and see what they have available?

PrincessJR

thanks for the advice. We are now wondering whether we would be better renting for a couple of years in order to live in a bigger house (we want more children), saving a bigger deposit, and allowing my husbands 2 years of income records to build?

bigadaj

If he's working basically full time for one firm then he would be considered to be a full time employee of that firm, at least in terms of the tax man. This should be reviewed as it could leave him and or his employer open to a tax bill in the future.

ACG

Entirely your choice but i dont think there is any major reason based on what you have said as to why you cant get a mortgage. Just might not be one for the majority of high street lenders (That doesnt mean your going to be paying an astronomical rate).

PrincessJR

Thank you both.

bigadaj - he is registered as a sole trader for tax purposes so will need an accountant to do a tax return for him each year. We plan to put aside roughly 25% of his monthly income into a savings account to (hopefully) cover his tax bill! Its all new to us so am just crossing our fingers that we are doing everything right.

It may be that renting in the short term is a less complicated scenario for us, given that both of our incomes are changing (mine reducing as now part time and his increasing - but getting more complex!)