should I buy? advice needed pretty please :)

bluurgh

Hi all,
I was hoping I could get some opinions and maybe some recommendations from some of the knowledgeable folk on here

My current situation
I am a 27 year old freelancer in animation/film/commercial industry in London (have been about 2/3 years now).
I have been paying various rents from 550 up to 650 a month every month during that period.

Currently I have only student loan debt, and a credit score 352 which as I understand is reasonable?

I dont really have any savings to speak of - some small savings which i consider my buffer for freelance etc.

However i am lucky to have 40k family money (which is earmarked to help me with a deposit)

So my question is, should I consider buying?

I have thought about buying a 2 bedroom flat some where in london, with a mind to rent out the spare room. My girlfriend would probably live with me and share my room and pay me a small rent.

I havnt spoken to any mortgage advisor about the potential mortgage I could get, which leads me onto another question
can anyone recommend and independent advisor that could give me just a quick idea if I could get a mortgage and how good it would be (free if possible of course )

as im a freelancer its a bit tricky to estimate my wage.. but I would say average over the time i have been a freelancer its maybe 45k-50k a year..though often it doesn't feel like it because of cash flow!

I need to look at those figures to make a accurate average

Thanks in advance!
Toby

kingstreet

Assuming you are self-employed, you'll need at least two years accounts, or HMRC SA302s, and a lender will typically lend upto four times your average net profit over that period.

The odd one will do five times, but you are best no over-committing yourself.

bluurgh

I am a limited company

kingstreet

Thanks for that.

In which case, it's the same multiple of salary + dividends.

bluurgh

brilliant,
thanks for the help

ACG

Have you had declining profits at all in the last 2-3 years? If so that may make it slightly more difficult.

egoode

One thing to remember is that the bank will not make any allowances for your plan to rent out the 2nd bedroom or any 'rent' from your girlfriend so if you can't afford it without a lodger you are likely to be declined.

bluurgh

ACG wrote: »

Have you had declining profits at all in the last 2-3 years? If so that may make it slightly more difficult.

no, steady growth.

On the subject of needing 2 years records, due to the nature of my work my history is patchy

i.e
I was PAYE when i first started in the sector for a year,
then went self employed (sole trader for roughly a year)
then PAYE for 7 months, now back to self employed as a limited company - I assume I need one unbroken 2 year stint?

bluurgh

egoode wrote: »

One thing to remember is that the bank will not make any allowances for your plan to rent out the 2nd bedroom or any 'rent' from your girlfriend so if you can't afford it without a lodger you are likely to be declined.

so my average yearly profit divided by 12?
If that covers my mortgage repayment - I can afford it in their eyes?

Let_Us_See

bluurgh wrote: »

i.e
I was PAYE when i first started in the sector for a year,
then went self employed (sole trader for roughly a year)
then PAYE for 7 months, now back to self employed as a limited company - I assume I need one unbroken 2 year stint?

Unfortunately, your unstable self-employed/employment track record will not impress many lenders. An unbroken 2 year stint would certainly help, but there are lenders able to consider one year accounts subject to income, LTV, credit score etc. etc.

bluurgh

Yes I figured as much

Would having parents willing to act as guarantors effect it much?