Can't find a lender

M_e

thequant wrote: »

I think this could be your biggest stumbling block, I started my business last year and managed to secure a mortgage despite not having even one years worth of accounts.

Are you saying you're more likely to get a mortgage if you are a Shareholder/Director in a Ltd Company as opposed to being a Sole Trader?

M_e

TheCyclingProgrammer wrote: »

Then you're essentially saying you plan to fraudulently claim your deposit is a gift? Good luck with that.

You won't get far without a letter stating the money is a gift and doesn't have to be repaid.

It's not fraud, you're misunderstanding me.

What I'm saying is that most lenders wouldn't allow someone to take a loan out for a deposit. I have not done that. My parents have the loan and I have the money. If the repayments will affect the amount I can borrow to the point at which I can't borrow what I need, then my parents won't ask me to continue making the repayments. Therefore I have no legal obligation to inform the lender of anything as there's nothing to inform. The loans not in my name and I won't make the repayments as the money becomes a gift.

If I do decide to inform them that I won’t be making payments anymore and they need a letter confirming that then that's fine. There's nothing illegal about it. It is all completely legal.

M_e

Yorkie1 wrote: »

I agree. Great, isn't it, an accountant planning fraud in order to bend the rules to get what s/he wants.

It's not fraud. See above...


Out of curiosity, why does it matter that I'm an Accountant?

Dave_Ham

Ok, firstly lets set your expectations realistically; I would not be 100% sure on you finding a solution here given the variables and we work on the hardest cases day in day out.


I am not sure the sizes are right on the flat space, although best you check this as many lenders will have this as an obstacle.


As a self employed accountant you recognise the value of time and paying for experience/professional support.


Therefore aside from being against forum rules, I doubt anyone is just going to provide you loose lender names for both professional and commercial reasons.


If you want to achieve this, your best chance will be through a broker.


With increasing figures to use the latest year, some lenders may want an accountants projection and this may be an issue given your position.


Lastly, some lenders will do an average of the last 2 years. Does this still put you out, if these lenders would apply a multiple of circa 5 times.

Paulaviki

M_e wrote: »

It's not fraud, you're misunderstanding me.

What I'm saying is that most lenders wouldn't allow someone to take a loan out for a deposit. I have not done that. My parents have the loan and I have the money. If the repayments will affect the amount I can borrow to the point at which I can't borrow what I need, then my parents won't ask me to continue making the repayments. Therefore I have no legal obligation to inform the lender of anything as there's nothing to inform. The loans not in my name and I won't make the repayments as the money becomes a gift.

If I do decide to inform them that I won’t be making payments anymore and they need a letter confirming that then that's fine. There's nothing illegal about it. It is all completely legal.

They will have to sign a letter stating it's a gift and that they have no claims to the house and they will also have to provide proof of where the money has come from under anti-money laundering rules. So either way the lender will find out that your deposit had come from a loan and may well still question it.

M_e

Dave_Ham wrote: »

I am not sure the sizes are right on the flat space, although best you check this as many lenders will have this as an obstacle.

Is there a minimum size studio flat that lenders lend to buy? I assumed that a studio flat is a perfect property for a first time buyer? If lenders have problems with lending for studios or small properties then who are these properties built for?

Dave_Ham wrote: »

As a self employed accountant you recognise the value of time and paying for experience/professional support.


Therefore aside from being against forum rules, I doubt anyone is just going to provide you loose lender names for both professional and commercial reasons.


If you want to achieve this, your best chance will be through a broker.

Sorry I didn't realise it was against the forum rules. I just wondered if there were any Sole Traders on here who had used a lender that lent based on 1 years profit. But I will speak to a Broker.

Dave_Ham wrote: »

With increasing figures to use the latest year, some lenders may want an accountants projection and this may be an issue given your position.

I can get an Accountants prediction from a colleague. I can also get an Accountants letter explaining why the income has jumped so high. But most lenders aren't interested in Accountants letters nowadays

Dave_Ham wrote: »

Lastly, some lenders will do an average of the last 2 years. Does this still put you out, if these lenders would apply a multiple of circa 5 times.

If I can find a lender that will do that then I should be ok. I think 3.6 x year 3 will be similar to 5 x an average of years 2 and 3.

Cheers

M_e

Paulaviki wrote: »

They will have to sign a letter stating it's a gift and that they have no claims to the house and they will also have to provide proof of where the money has come from under anti-money laundering rules. So either way the lender will find out that your deposit had come from a loan and may well still question it.

Most young first time buyers get money from their parents. I don't see the issue. In fact I don't even have to use the money from that loan that was taken out many years ago. They could use that loan money for their property abroad and draw the deposit from their savings account.

Mattygroves2

M_e wrote: »

Most young first time buyers get money from their parents. I don't see the issue. In fact I don't even have to use the money from that loan that was taken out many years ago. They could use that loan money for their property abroad and draw the deposit from their savings account.

It doesn't matter how they got the money but you will either have to show proof of you slowly saving it or you will have to say they gave it to you. The lender will then ask them to sign a letter saying it is a true gift and there will be no repayments and they have no interest in the property.

The significance of you being an accountant is that we (I too am one) are expected to have professional standards which should prevent us from lying or wishing to deceive on mortgage applications. Even without professional standards it's far too risky to risk your whole professional future over a studio flat. Wait and save like the rest of us do.

M_e

Mattygroves2 wrote: »

It doesn't matter how they got the money but you will either have to show proof of you slowly saving it or you will have to say they gave it to you. The lender will then ask them to sign a letter saying it is a true gift and there will be no repayments and they have no interest in the property.

Ok if that's how it works then that's fine. I've spoken to them and they're happy to do that as they have no interest in the property and won't expect any repayments.

Mattygroves2 wrote: »

The significance of you being an accountant is that we (I too am one) are expected to have professional standards which should prevent us from lying or wishing to deceive on mortgage applications. Even without professional standards it's far too risky to risk your whole professional future over a studio flat. Wait and save like the rest of us do.

It shouldn't matter what job someone has, no one should be defrauding lenders... I don't see why he/she even had to mention it. The fact is I wasn't planning on defrauding anyone anyway.

I'm not sure what the risk is. Everything's completely legal. I've got the phone number of a broker through a family member so hopefully I can get things moving tomorrow. I'm guessing he should know what lenders lend based on 1 years profit.

Dave_Ham

You need to re-phrase your requirement when you speak to your broker.

You are not looking for a lender that accepts one years accounts, you are looking for a lender that will base their lending on the most recent year and not a mean average of the 3 years.

I would now expect a solution if you can work to 2 years average on a higher income multiplier than Coventry.