Moving home + mortgage +self-employment

emza10

Hiya,

We're currently on a 2 year fixed rate mortgage -our first one. This is due to end in January 2014 and will then go down to the bank's variable rate. We are hoping to move house shortly after this. My partner has the opportunity to go self-employed at the moment, if he does, will we jeopardise our opportunity to move house, i.e will we have to wait a further 2 years to show his self-employment accounts, or will we simply be able to transfer the mortgage?

Thanks for your help, it's a confusing subject for us first-timers!

Emma

wellbored

Hi Emma,

As a minimum your partner is likely to need at least 1 years accounts, having 2/3 years will give you a much wider market.

Even if your mortgage is portable if you are moving house then your lender will completely reassess you.

HTH

ACG

Do you work?
Whats your income?
What do you expect your partners income to be?
How much would you be looking to buy for and of that amount how much would you be putting down as a deposit?

It is possible to do with 1 years accounts, but if your talking a 90% mortgage then there isnt much hope, if your talking 50% then it could be done (subject to income/credit scores).

emza10

Yes we both work, although I am part-time and there's a possibiliy I could be on maternity leave at the time.

We bought our current place for £200k but have done lots of work on it and hope to sell for £250k (it's in prime London). We'd then be looking at buying for about £250k or perhaps a bit more. So we'd have 20-25% deposit for new place.

Other option is to rent London place out, rent on the south coast (where we want to move) and sit it out for a couple of years until we have enough paperwork.

ACG

You might be able to get a mortgage with 1 years accounts and a 25% deposit.
But it would depend on your circumstances as a whole really.

Its worth having a chat with an advisor closer to the time and let them do a factfind, they will then have all the information needed to go and do some research.

Crashandburn

I would also look into the kind of work your partner does. The reason for this is that some people are given the opportunity to go self-employed when in fact they are contracting and choosing to pay their income through a limited company etc.

Some lenders would treat these people as purely self-employed as ACG has stated, but others will treat them differently on the basis of the work is of a more guaranteed nature than simply starting a brand-new business from scratch.

emza10

Ah yes, he is an electrician so he would be sub-contracting for a company that he used to be on the books with, pretty guaranteed work. I guess he'd still need at least a year minimum books though?

Crashandburn

Not really. It all comes down to who will take care of all the tax and national insurance and whether he'll have some deducted at source and then the rest when he does his own returns.

The line between employed and self-employed has grown ever murkier over the last 10 years and thankfully some lenders are cottoning onto this concept and being a bit more flexible.

I would just get it confirmed as to who is taking care of his tax liabilities and whether some deductions are being taken by the company he used to be on the books with.