First Time Buyer Confusion!

BobinNorwich

Firstly, thank you for reading this thread! I'm trying to get a firmer handle on what sort of Mortgage my and partner and I could get in a few months’ time. As per the title my confusion has come from the varying results that the online calculators give. I’ve read the guides and understand the relationship between deposit, credit rating and affordability each month. We will of course go to see a decent broker soon.

What I’d like to know is the following:

Could we get a £260 – 280K mortgage? Here is the situation:

• By the time we buy we will have a £40K deposit
• We both earn £33K a year + £1500 yr bonus and have 2 years of history that can prove this salary
• We are both directors in a company and have a 25% stake each with 4 years of accounts. The company has consistent profit, increased growth and no debt
• Our credit ratings are very good. However, I was bankrupt in 2006, however this fell from my credit record 2 years ago. I’ve worked hard to get it back up to the 800 range (if that means anything) and have a 10K limit across three cards. In fact I get better rates than my partner despite her clean history.
• My partner has no debt, I clear my balance in full.

Please let me know if you need anymore info and thank you for any advice

kingstreet

A bankruptcy may not appear on your credit history, but the solicitor handling the transaction will perform a bankruptcy search close to exchange, so it will need to be declared to the lender at the outset.

As many lenders decline such cases automatically, you need to speak to a broker about getting the case approved and all the documentation submitted before you find a property.

As you have the added complication of what a lender would consider self-employment, your evidence of income requirements will be two or more years' HMRC SA302s to show your remuneration and dividends, the broker visit is essential as early as possible.

BobinNorwich

Thank you for your reply Kingstreet. Where do solicitors search for BR records, is it here: insolvencydirect.bisgovuk

Thanks

kingstreet

No idea how, or where, they do them.

All I know is the search is done, usually close to exchange and if it revealed a bankruptcy, historic or otherwise, which wasn't disclosed at point of application I believe most lenders would withdraw the mortgage offer - at least until they investigated to see if they still wanted to lend.

amnblog

You are not clear.

Is all your income from the company?

What are you taking paye and dividends and is there other income outside of the business?

BobinNorwich

Hi Amnblog

Yes all income is from the Ltd company for both of us as PAYE and dividends.

No other income.

Thanks

amnblog

So your joint income is £66,000 plus £3,000 bonus and you want to borrow £220,000 to £240,000?

Is there any other debt (loans, credit cards), or childcare costs?

BobinNorwich

Amnblog

This is correct - ideally £240000. No dependents and no other debt.

amnblog

That figures should be acheiveable with a number of lenders.

Use a broker, dont go direct if you are self employed as you may crash and burn.