self employed or not and what are our chances?

borokat

My husband has been self employed for a couple of years and his business has made a small loss in both years. He has not drawn a salary in that time. He has now secured investment in the company and will be taking a salary of £50k and going PAYE (part of the rules for the investment that he has to do this). I work 3 days a week with a salary of £14k.
We own a flat with a remaining mortgage of 68k. The value of it would be 80-85k (the last flat to sell on our street went for 80k 2 years ago).
We would love to move house, my husband would like to keep the flat and rent it out but I would prefer to sell (I also think we will likely need the equity towards a deposit).
So we will have an income of £64k before tax, we both have some credit card debts which are on 0% cards and totally manageable. We have no savings but there is a good chance that my husband will be able to take a large bonus in the next few months (upwards of 20k). So assuming we have a deposit, what are our chances of getting a mortgage? Will he still be classed as self employed? Will they want his company to have been making profit for longer before they will consider lending? I know really we need to see a financial adviser but I just want to get an idea before I get my hopes up. If it isn't going to work out I can make a plan to get the debt paid down and savings built up and feel like we're getting somewhere. Any insight gratefully received!

borokat

we have owned our flat since 2006, never missed a payment and paid off over £25,000 off the mortgage in that time so we have a really good record (despite being really skint some of the time!)

ACG

How much of the company does he own?

ACG

Also how much of a purchase price are you looking at and how much deposit?

borokat

purchase price I think £170-180k. He owns 65%, I own 5% the remaining 30% is owned by his investor. I think we will be able to put down about £30,000 as a deposit.

ACG

I think you may struggle with this as he is technically self employed due to the amount he owns.

There may be 1-2 lenders who will look at this based on the full situation but i dont think you will get a high street lender to accept it - i could be wrong though.

borokat

Good to know, thank you. It is quite an unusual situation. We will make an appointment to see an FA in a few weeks once we have all the facts and figures straight and see where we go from there.

borokat

ACG thanks for your help yesterday. I was just wondering what we could do to improve our situation, is it just a case of giving it time? Would it help if we had a guarantor? Or would a larger deposit make a difference?

ACG

You could leave it a year or 2 to show "better" accounts, ie accounts that show a healthy profit.

Alternatively speak to a broker, there may be a lender or 2 for this. Paying a slightly higher rate for 2 years whilst you get accounts and then you can remortgage to a new "normal" lender.

Im not saying you definitely can do it now but its worth a try.

borokat

Thanks, we are kind of bursting at the seams at the moment and I would love a garden for our very active toddler! It's good to know there might be some options out there.

Let_Us_See

As ACG has already explained your husband due to his level of shareholding will be assessed as self-employed and his paid PAYE income virtually ignored. I believe it is very unlikely any regular provider will lend until the company returns a trading profit - as opposed to inward investment.

Obviously, a guarantor could make a difference.

I would add that this is unlikely to be solved by an FA.