Self-employed mortgage?

kwhybro

Hi all,

Hoping some can help between now & us seeing the mortgage broker on Tuesday. I really just want an idea as to whether we'll be laughed out the bank!

My husband & I are both self-employed, me for 2 years, him for 4. My last tax return showed an income of £27,000 & him £6,000. We have a deposit of £35,000 & are looking to borrow £215,000.

My income for 2014-15 will be higher & my business shows a decent turnover & profit but no idea if that has any impact? Also, we could potentially borrow some more capital, if needed.

Thoughts about whether we'll be able to borrow this much as I'm aware it's above the normal 4.5 x salary.

Thanks!!

ACG

Some lenders will average out the last 2-3 years figures, others will use the latest figure.

Based on the figures you have stated you have no chance, so it would be very dependent on what you clear on this years as to whether you:
1) Have a chance and,
2) Need a lender who averages or a lender who uses the latest figures.

Hopefully your seeing a broker and not a mortgage advisor at a particular bank?

kwhybro

OK, looks as though we might be renting for a few more years then!

Yes, we're seeing an independent mortgage broker.

kwhybro

In your opinion, would it make any difference if we had a bigger deposit?

ACG

Your not a million miles off the end of the tax year (2 weeks give or take) you could file your accounts as soon as possible and assuming it comes out at a combined £47-48k for this year there could possibly be options.

kwhybro

Not sure we can get it up that high but could try!

cns06

You have to watch that you don't get caught in the trap that we did which is house prices rising faster than you can increase your SA302.


We are also waiting for EOTY to get our latest returns put in for this very reason.


As for your question re deposit - it makes no difference. We only needed 50% LTV but it was still a no go.

Salt was further rubbed into the wounds because the new mortgage would have been only c.£200 PCM more than what we currently pay (we have been overpaying for 5+ years).


As for your income - as above the more the better but £45k should do it. If you can get closer to 4x income you will probably find more products / better rates are on the table. They don't really work on income multiples though any more.

kwhybro

OK, been frantically doing accounts for last few days & have managed to get our joint income up to £49,000.

Problem is, I've just run an Experian report & it says I have a poor credit rating (very near to fair, but still in the poor zone).

I think this is because I took car finance in January & also have some personal credit cards. £4k of this actually belongs to my Ltd Company but I'm not sure how to show that?

Is there anything I can do to improve this in the short term?

Thanks!