Self Employed Mortgage - Confused!

Lee_S_2

Right guys am very confused.....

I had my house up for sale last year but was made redundant so took it off the market. Then an opportunity came up to become self employed so I took it.

Having spoke to both my current bank and also my existing mortgage lender they both said they would consider 1 years accounts (due to me being an existing customer).

This is where I am a little confused as to what they mean by 1 years accounts......

The business I am a partner in (non ltd) has been around since 1930 and does very well. I joined them as a partner at their request.

So in October I will have been self employed a year so I guess our accountant can prove earnings over this year for myself? and if need be we have accounts for the business going back many years.

The problem I have is that my better half is pregnant and our house just isn't up to another baby with an already small child and rather large dog....

So I would have liked to put my house up for sale ASAP as it could take time to sell, but don't want to sell it if I will be refused a mortgage.

So im asking really, is 1 years self employed come October likely to be acceptable? think I need to make an appointment with the bank shortly as I kind of need to get some idea whether they will touch me or not before I go ahead and sell my house.

I understand why they are like they are with self employed people, but having worked since the day I left school and never missed a single payment on anything I cant help thinking its all a little bit too strict, especially with a LTV of around 70% on the kind of property I want to buy, should I default its unlikely they will ever lose out is it.

Doing my head in!

kingstreet

You will be required to provide evidence of one year's income in the form of accounts or SA302s which can be obtained from HMRC.

There are lenders who accept only a year's evidence and at 70% I don't see you having much of a struggle. Talk to a broker and it will be a lot easier as they will talk to the lenders who will do this.

Lee_S_2

Thanks,

Not sure when my tax return will go in though and im right in saying you don't get this SA302 until my tax return is filed?

Accountant is currently on with doing the books for 12/13 which ended on 31/03/13. He files our self assessments/partnership statements for us. I know the deadline is 31/01/14 for this but am assuming he will do it well before then.

Only thing worrying me now is that as I was only self employed from October 2012, and our books for 12/13yr was completed the end of march, wont that only give me 6 months accounts? (remembering the business has years worth of accounts)

So what im worried about, is that I will have self employment of a year in October 2013, wont I only have 6 months accounts as the books were wrapped up for 12/13yr in march/april?

kingstreet

Presumably you were doing something for the first part of the tax year and your SA302 will confirm all your income from all sources. I've just done a mortgage for a fella who had three years' SA302s;-

2010/2011 - all self-employed
2011/2012 - part self-employed, part company director salary
2012/2013 - all company director, salary and dividends.

Brokers deal with such cases all the time, you need one who understands the different forms of employment and income.

Lee_S_2

Right thanks, that's pretty helpful.

I need to speak to someone in next few months ideally to see if I am "likely" to get a mortgage before putting my house up for sale. I don't want to put it up for sale, get a buyer then get told for whatever reason I wont get accepted for one.

Will any brokers deal with me beforehand like this? despite the fact I don't want a deal until October at the earliest?

Just trying to plan ahead and get an idea of how likely I would get accepted before selling up.

kingstreet

Most brokers will help you "roadmap" your future plans. We do it all the time with no guarantee you'll come back to us. Ask friends and relatives for a recommendation in your area.