Self Employed Mortgage Advice

KatieMM

Hello!

I've lurked in the wings for a while but this is my first 'proper' post so please be kind!

The situation is this: I'm self employed (two years books by a certified accountant showing profit Year 1 and increased profit Year 2). I have one 'core' customer who I'm contracted to on an annual rolling basis and also have a number of other smaller contracts and ad-hoc projects. I was also in full-time employment before venturing out on my own (Limited, VAT registered business).

With property prices increasing I'm keen to get on the ladder and have a deposit of around £30,000 (I could increase this by up to £5k if necessary but wanted some set aside for furniture etc). I pay myself (via PAYE) £2000 per month and take the rest as dividends. I don't have any adverse credit and according to Equifax I have an excellent score (if this means anything?). I have a car leased which is due to be returned (end of lease) in December and currently have approximately £1000 on my CC but this is usually paid in full at the end of every month and I've never missed the minimum payment required.

Basically, I'd like some advice on my eligibility for a mortgage? - I'm 30 years old, I have a three year old daughter who will go to school next year and goes to nursery 2 days per week (approx £200 per month) and no other monthly commitments/outgoings.

I read/heard somewhere that I might be able to achieve 'sub-contractor' status from my core client as I am contracted to work for them 12 days per month on an annual basis but I'm not sure how this works or whether it would be necessary and whether I would be eligible either way anyway?

I approached Lloyds (who I do my business banking with) last year but because I only had 18 months books they weren't interested in even pursuing the conversation, ditto with Natwest but I'm hoping that now I have 2 years books I might be in a more favourable position?

Any advice would be gratefully received!

Thanks in advance

Katie

ACG

Good news is there will be lenders who will accept 2 years accounts (and at normal rates). Some lenders will require 3 years but there will be options.

It might be worth speaking to a broker?

Its important to check you will pass the affordability before making any applications/credit checks etc if you are doing it yourself.

KatieMM

It's worth noting that my husband has a mortgage on a flat in London (we're both back and forth with work) and we currently rent in Gloucestershire. He's not long had his mortgage (last year) for £225,000 and earns decent money (full-time employed), would there be any value, or even possible on him being included on the mortgage? The reason that I'm not on his mortgage is that Natwest wouldn't even look at my income as I only had 12 months accounts at the time and they said I'd only be put down as a 'house wife' but they'd look at my commitments, i.e. my car.

ACG

Possibly but it will depend on the details.

If his income is say £60k plus then it might help putting him on it - but without knowing more its difficult to say.