Income Multipliers?

shads1973

Hi,

Did a buy to let remortgage last year, however haven't had a resedential mortgage in over 10 years (and obviously a lot has changed since then)

As a general rough guide, what is the current potential maximum income multiplier for a self employed person (understand this is subject to accounts and other potential variables)

kingstreet

It's all about income and outgoings, post MMR.

You can get upto five times income, if you have none of the outgoings lenders now have to take into account such as dependents, childcare, student loans, credit, ground rent & service charges etc. and you have a decent term.

The best thing you can do is average your net profit of the last two years and input that as your income in different lenders' online affordability calculators along with the outgoings each one requests.

shads1973

Thanks (any area of this site you don't cover)

Will try a few of the lenders different sites to gauge an idea of what is classed as an outgoing (though have no outstanding credit so be interesting to see what is defined as an outgoing cost)

shads1973

And sorry is the potential X5 through high street lenders to self employed people?

kingstreet

Yes to both.

amnblog

A self employed person needs to establish what 'income' is being considered. That varies by case and lender.

shads1973

So not a case of simply being done on what I'm declaring as my income via my SA302(s)

kingstreet

If you are a "normal" self-employed person, not a contractor or director of a limited company with salary and dividends, you can do what I set out earlier and use your averaged net profit.

These are the amounts against "profit from self-employment" on your last two SA302s.

shads1973

Thanks. Straight forward self employment and self assessment. No company for last 3 years. All SA302s available.

So I'm going with the average of last 2 years as a guide

kingstreet

Yes, pretty much every lender will use that way of calculating your income.