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High deposit, irregular income - what to do?

Norwede25
Posts: 3 Newbie
Hi guys. New first time buyer here.
I have a few options in what to do, but am unsure what's wisest to choose.
I have a high deposit, but am self-employed with very irregular income which has been low the last few years. Additionally I'm Norwegian, so can't register to vote. I'm assuming this doesn't make me any lenders favourite despite my high deposit. My partner is equally self employed and equally irregular:)
My options as I see it:
- Try to get on London property ladder, try to get a mortgage. Might get turned down.
- Buy commercial property and let out/ use for our own company(we run our own business) then sell. What are yields on commercials in 3-4 years?
- Buy outright somewhere small with the money I have. It would be too small for me&partner to live but could let out for 3 years then sell, financing our own rental with the rental income. Selling in 3-4 years would then perhaps make us more eligable once our income is higher and we've made some more money from selling?
Is there a massive downside to option 2? Anyone with this experience? I'm obviously afraid of spending so much as this is my only security. (I'm not a big investor!!)
No experience with buy-to-lets, what are the major pitfalls? (Apart from hideous wrecking tenants...)
Any tips appreciated!!
Best
Norwede25
I have a few options in what to do, but am unsure what's wisest to choose.
I have a high deposit, but am self-employed with very irregular income which has been low the last few years. Additionally I'm Norwegian, so can't register to vote. I'm assuming this doesn't make me any lenders favourite despite my high deposit. My partner is equally self employed and equally irregular:)
My options as I see it:
- Try to get on London property ladder, try to get a mortgage. Might get turned down.
- Buy commercial property and let out/ use for our own company(we run our own business) then sell. What are yields on commercials in 3-4 years?
- Buy outright somewhere small with the money I have. It would be too small for me&partner to live but could let out for 3 years then sell, financing our own rental with the rental income. Selling in 3-4 years would then perhaps make us more eligable once our income is higher and we've made some more money from selling?
Is there a massive downside to option 2? Anyone with this experience? I'm obviously afraid of spending so much as this is my only security. (I'm not a big investor!!)
No experience with buy-to-lets, what are the major pitfalls? (Apart from hideous wrecking tenants...)
Any tips appreciated!!
Best
Norwede25
0
Comments
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How much do you have for a deposit? Have you been to see a mortgage advisor to find out the likelyhood of getting a mortgage?0
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100k if I got a mortgage, if I bought outright I'm expecting to spend more, up to 150.
I've seen someone at Natwest who seemed ok, but obviously not thrilled about the irregular income. (We simply can't say what we'll make in a year!) It could rise significantly this year, but it's been low in the past, for my partner it was high until 3 years ago. (And they usually just want to see 3.)
We saw an independent mortgage advisor who didn't seem positive. Based on how low our income's been the last few years and how irregular the prediction, I'm quite nervous about being turned down.0 -
Speak to an independent mortgage broker - if it can be done, they will help you do it. If it can't be done they will tell you why not, and what you need to do to fix it.
I'm assuming that you are currently managing to pay your rent. If you put the same amount per month in to a mortgage, what size mortgage could you get? That might be a good starting point.
As to being Norwegian - I don't know the rules for the UK, but I lived in Ireland for 4 years and we were able to vote despite not being Irish citizens. I'm guessing that you want to go on the electoral roll to help your credit score? Have you been told for definite that you can't do this?
Is there anything you could do to increase your take-home pay - more hours, charging more for your services, evening/weekend work in a 'normal' job, etc?
You also have to think, regardless of whether or not you can find a lender who will let you have a mortgage - do you actually want to put yourself in a position where your home might be repossessed if you can't keep up the payments? What if interest rates increase (which they are bound to do in the medium term - they're unlikely to go lower). If you're renting and the rent is proving too much for you, it's relatively easy to move somewhere cheaper. If you buy a house and find you can't afford the mortgage, things are much harder to sort out.No longer a spouse, or trailing, but MSE won't allow me to change my username...0 -
trailingspouse wrote: »As to being Norwegian - I don't know the rules for the UK, but I lived in Ireland for 4 years and we were able to vote despite not being Irish citizens. I'm guessing that you want to go on the electoral roll to help your credit score? Have you been told for definite that you can't do this?
UK & Ireland are EU countries. Norway is not. You can only get on the UK electoral roll if you are UK, EU or commonwealth national.0 -
I'm pretty au fait with the mortgage options I think...it's more if anyone thinks it would be a better idea to buy somewhere small outright and use the letting income as a way of funding our let until we can sell and buy somewhere bigger, giving us about 3-4 years to increase our income?
Even if I did get a mortgage in London now, it's for something small and probably not very nice...:)
And I def can't be on the electorate roll, not a EU citizen unfortunately.0
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