slef employed mortgage advice firts time buyer

lollypink

hi all,

I want to give myslef best chance of getting a mortgage.
I am single person and am a school teacher. This year i made decision to go part time as I have been running a dance business alongside. I now work 2 days teaching and 3 days my own business.
Im going into four of my buiness and for two years I made no profit as I was investing everything back into the business. Last year I managed to pay myslf a small amount but this year the business is doing increasingly well.

How do I manage it so I stand best chance of getting a mortgage?

Not to be crude and talk about figures but may as well. I earn 900£ a month from teaching two days and the business profits about two thousand a month this is profit not turnover.

Should i be paying this to myself to show a good wage ie from business account to personal account in order to show I earn a decent salary and get a mortgage??

sorry if I sound ignorant I am very new to all this!! I have about £20k deposit to put down on a house. I dont really know how big mortgage i could get as a single person I dont want anything massive but would just like to buy somewhere in next year or so if possible. Thanks , Lolly

Hanky_Panky

Are you honestly a teacher ? Really !!

kingstreet

If you want/need both strands of income taken into account, a lender will want to see your payslips for your PAYE earnings, plus your latest P60, together with accounts for your other business, or SA302s from HMRC which show your total earnings.

Many lenders ask for three years' evidence of self-employed earnings, although you'll find some that accept two years' and the odd one which accepts only one year's.

Lenders use net profit for the self-employed, that's the figure which goes in box 30 on a SA Online tax return. It's your turnover, less expenses and allowances, but before personal tax allowance, tax and NI. For the employed, it's gross annual income.

Credit commitments, such as loans and HP payments and perhaps 3% to 5% of credit card balances are deducted from income to establish affordability.