Self-employed looking for options and hitting brick walls :-(

childminder87

Hi, first post here! Feeling a bit hopeless so hoping someone can help me find a solution (I'll try not to rant!)

• I bought a house three years ago on a teachers salary. The mortgage is currently in my name only and my payments are around £315 a month, although started at £380 a month.
• My husband moved in with me but as I had a fixed term mortgage we didn't bother adding him until we wanted to move/find a new deal as we'd have had to pay product fees again.
• I quit teaching just over a year ago to set up my own childminding business. Because Ofsted lost my application/took forever I didn't end up trading until May 2014 despite paying reg fees etc in January.
• The company has grown from strength to strength allowing me to make around £5k in overpayments on my mortgage since last May and still paying £380 a month now. I have new contracts in place, and am in the process of taking on an assistant due to high demand.
• Because of this, and also our ultimate aim of being able to foster we are looking to upsize and sell our 3 bed buying a 4bed closer to the school I do pick ups from. There is no competition for childcare at this school, newbuilds are being built daily and being an ex-teacher I am getting more enquiries than I can take on at present and the work has proved to be reliable and regular.
• We originally wanted to upsize towards the end of the year, however our estate agents had an unbeatable offer on to celebrate them opening a new office and so we have put our house on the market to test the waters.
• We have seen a house that ticks every box, would be perfect for both the rest of our lives as a family but also my business as the childminding could be self-contained on the bottom floor with plenty of room for expansion. This house is only £35k more than our current house so our mortgage would be around £20-30 a month more than I am paying by myself now.
• My current lender is unwilling to so much as book me an appointment with an advisor until the end of May when I have 1 full year of trading. Even though I can file m SA tax return 6th April and my earnings would show at least 9k more than I would require for this mortgage.
• My husband's income is 16k short however of what he would need to purchase the house by himself.

My questions really are: is the only option available to us at present to raise a further £16k so that he could get the mortgage solely in his name? Is it true that they would have to wait until May as opposed to April tax return to work out what I earned? As it seems to me that one extra month won't really show any difference and the tax assessment is more "official" as the SA302 is generated by HMRC. Is it possible for me to employ my husband to boost his income? As if he is employed he needs to show two months worth of payslips and as I am registering as an employer for my assistant then it would be little extra work to register him as an assistant also (he pretty much does the jobs on his day off as voluntary work! hehe) In this sense I would only have to pay him 3k a year to allow him to get the mortgage himself and we would only have to wait 8 weeks for this (2 payslips). Or is this not acceptable?

I can understand my current lender not wishing to take a risk if this were a new mortgage or a low deposit but we would have a 30% deposit and they are already lending to me on my own income and have records of my good paying history, ability to make good overpayments etc. and it is for an extra 30k so it seems daft in my opinion that they will not even let me through the front door of their banks to see someone when I would be adding my husband's 20k income to this :-/ I have seen a broker who said that he would struggle to find me anything else with less than 2 years worth of accounts. I am happy to pay a higher interest rate for a year or two if it meant I was assessed on an individual basis and someone would actually look at the contracts I have in place etc. We have been watching the houses come up round here for the last year and a half and none of them offer the business and personal benefits that this house would offer and the lady has said that once contracts have been in place she is happy to go at buyers pace as she is looking to rent. Very frustrated at the moment as I feel it's all my fault for quitting teaching despite me now earning more, being there for my little boy and my business thriving much more than we dreamed of.

Alexis27

You need 2 year's accounts generally I'm afraid.

Either way, the only thing that matters is the SA302 form. The first day you can file 2014-15 is April 6th. You'd have to file online and the get straight on the phone to get them to send the SA302 ASAP. Banks have not caught up with the times and despite millions more being self employed after the recession, often they don't know how to deal with them.

See http://www.onlinemortgageadvisor.co.uk/self-employed-mortgages/getting-self-employed-mortgages-with-1-years-accounts/

Unfortunately the banks don't see it as 'just another £30k', they see it as a new application for £150k (or whatever the amount is).

You employing your husband wouldn't make any difference as you'd need to get on PAYE to get round the lack of trading time.

Since you only really need 3 months of PAYE slips for a mortgage, you could in theory become employed by someone, or a company, for childminding. You'd still be self employed, but be employed at the same time.

You need to find someone who would be willing to put you through the books and on the payroll of their company for childminding.

nuzik

some lenders are more favorable if you have a bank account with them as well. But you need at least one years worth of accounts

Thrugelmir

Alexis27 wrote: »

Banks have not caught up with the times and despite millions more being self employed after the recession, often they don't know how to deal with them.

Self employment is hardly new. So unsure what you are inferring.

As with any business is the track record that matters. Not least because many fail to survive the tests of time.

Jhoney_2

Can you not just start the process and file your 2014/25 return to include your may to april 4th income? presumably this income would be enough to lend weight to your mortgage application, Chase with Hmrc who may be able to send you an email/letter summary. If you are set up to file your return online, this may be easier, but I do not know - letters from hmrc have a 7-10 working day lead time....

Also good idea to speak to vendor, who may consider an offer with a slight delay as not in a chain.

amnblog

You have options to have your income considered once you have completed 12 months trading - not before.

childminder87

thank you. I think the mortgage broker has confused me as I thought I could file my SA 6th april and use that which is only in a few weeks. I was hoping I could get an AIP before then to add strength to my offer but my current lender won't even let me book an appointment. After speaking to a broker recommended by a friend he has said that it's not when I file my return it has to be a full 12 months so not until may and even then there's only one or two who will even consider it.

amnblog

The second broker is correct.


Your current lender is most likely a waste of your time.

childminder87

so to clarify I'd have to wait til the end of May before applying, not when I submit my SA on 6th April?

We have had an offer on our house but it is a little low. It's promising I think as it's only officially been advertised for just over a week. The lady has sold her house and so obviously the clock will be ticking for her to find somewhere although she's chased me today (1 day after making offer) as she claims there is another property she likes but preferred ours. Although I can't see why a mortgage should be an issue for us if there are lenders prepared to lend with 1 years accounts, I still am cautious and not wanting to commit until I have an AIP (even though I know that's not a 100% guarantee- I just feel that it means our likelihood of being accepted providing the details hold true is much greater). I found a local broker who says that it is harder but he should be able to find us something once my SA is in. He rang and took details from me on Thursday and said to leave it with him, he'd do some research and get back in touch on Friday although I haven't heard anything yet (impatience getting the better of me I think!).

amnblog

I am at a loss to understand what he need to 'do research' about.

You have not been trading a year. Once you have been you may have some limited mortgage options. Any work before then is a waste of time and probably the reason you did not hear back on Friday - i.e. the broker has not done anything about anything.

If you are feeling warm it is because you have been put on the 'back burner'.

childminder87

He did ring back today and took my details to submit an AIP application with the stipulation that any mortgage offer would be subject to me declaring the figures accurately, with verification from my SA302. He said he is using a panel (I think) that processes fairly quickly and so I should hear back from them within the next day or two and see where we go from there. As far as I remember that is what we had to do with a different broker for our first mortgage and then once the checks etc. had been passed, to apply for the actual mortgage we then had to produce all the evidence to support what we declared when applying for our AIP. 8 weeks feels the longest time ever and it is frustrating me that it is solely my fault that we are not able to get the property we want when we have the money, a buyer and the house is on the market at a good price. Although I understand entirely why the procedures are in place (to safeguard against the banks cocking up again by lending no-questions-asked) just a pain that they've gone the other way and common sense has no role to play in it all. thanks for your advice.