Self-employed mortgage when earnings have declined

Mortgage_Mark_2

vmp wrote: »

What are the possible different scenarios?

Some take an average of the last few years.

Some take just the latest year.

Some will decline altogether if there's decreasing profit, even by £1, without good reason.

ACG

dktreesea wrote: »

OP, would a self cert mortgage help? I see they are on their way back. Quick Loans is launching their product in Jan 2016 and this broker seems to think he can get people one even now:
http://self-certified-mortgages-123.co.uk/
Is this one a scam?


The only way I can see self cert mortgages coming back is if the mortgage provider is registered elsewhere in the EU, so they don't have to adhere to the Mortgage market Review the FCA undertook, which explicitly banned self certification. Instead they have to follow the Mortgage Credit Directive (not sure if this is "live" yet) which has less strict rules on income verification.

Is someone plagiarising the news article? There needs to be a head hitting a wall picture I think.

dktreesea

amnblog wrote: »

I am amazed this guy's website is up - his FCA registration appears to be defunct.

This page listed above is nonsense.

There are NO self certified mortgages available in the market - the regulator blocked them finally last year under the Mortgage Market Review.

So if that's true, why are people advertising them and why are companies from within the EU but operating in a different country to the UK offering them? Quick Loans, for example.

looknohands

Mortgage_Mark wrote: »

Some take an average of the last few years.

Some take just the latest year.

Some will decline altogether if there's decreasing profit, even by £1, without good reason.

Decline on a £1 decrease? that seriously happened?
I'm definitely going to have decreasing profit next year, I've been 12 hour days 7 days a week for the past year, need a break!

dktreesea

What I did think was promising, and definitely helpful to me as an older self employed person, if we decided to venture into the property market again was building societies ( and our bank looks set to follow) plans to offer mortgages to people that run into their 80s and even 90s. This seems like quite a good idea. If the person dies during the mortgage term, then the remainder of the mortgage becomes payable from the estate. Not much risk for the building societies (so far) involved.

ACG

Ive had an email this morning that will lend up to age 80 - im sure there are certain criteria but it can be done.

dktreesea

ACG wrote: »

Ive had an email this morning that will lend up to age 80 - im sure there are certain criteria but it can be done.

That's really good. A lot of the problem for older self employed people is not so much our income, but having the mortgage term restricted to up to 65 years old for the oldest member of the couple.


I checked on our bank site the difference for us between borrowing over a 10 year term to a 25 year term. The amount we could borrow shot up by £96k. Where we live that would make a huge difference to the quality of what we could buy.


We could have afforded this mortgage, still, under a ten year term, i.e. still less than the rent. But the only way we could have got it under a ten year term is via a self cert mortgage. Well, not quite. The bank in our case would have just split the borrowing between mortgage finance and unsecured borrowing. Or we could have just made up the short fall with out current credit lines at the bank.


I have come to the conclusion if the bank can see the money coming through the account and they can easily verify the source of the money (e.g. electronic transfers, banking credit card receipts) they really couldn't care less what you declare to the tax man, or rather what legal tax avoidance you can employ to bring your income tax bill down.

Mortgage_Mark_2

looknohands wrote: »

Decline on a £1 decrease? that seriously happened?
I'm definitely going to have decreasing profit next year, I've been 12 hour days 7 days a week for the past year, need a break!

Yep - I had a case declined recently by a building society (after getting a sanction to proceed prior to app) because company net profit was down by £12. Seriously.

Banks are incredibly black and white, but you often get a decent chance of an agreement via BDM's if it's that close, or you have a decent reason for it.

Thrugelmir

Guilefox wrote: »

Banks are so nice! Basically any discrepancy you should bend over and brace yourself!

No discrepancy. Just hard facts.