Mortgage advice really appreciated!!

chris163

Hi guys

I just wondered if anyone could offer me any advice with regard to getting a mortgage?

Basically I am 30 years old and formerly owned a property but sold it in 2013 to expand my business (limited company) which I setup in 2009. I now live in rented accommodation but would love to get back on the ladder in the near future.

I used the equity from my house to buy more stock and also go to a larger and much improved premises. 18 months on, I am pleased to say it was worth doing but I don't know what my chances are of getting a mortgage, what I could potentially borrow etc?

I now have approx £220k in assets through my business with no borrowing etc. For 2013 reported profits were £65k (after my wages which were minimal), 2014 -17k (due to spending approx. £70k in setting up the new site) and for 2015 profit of approx. £100k (being submitted next month). Projected income (probably irrelevant!) for 2016 is about £160k.

Due to trying to build the business as much as possible, I drew as little money over the years as I could keeping it within the business. For 2015 I drew just over £30k despite the profitability being quite decent. Income each month was very consistent too with approx £11k a month on average after expenses. Obviously now I can draw quite a bit more and wondered if this would give me any advantage in doing so, depending on when I look to apply?

So now I would love to be able to get back on the property ladder but i don't really know what my chances or options are? Its all a bit daunting really....!

A few other things to note:

All my accounts from 2009 onwards have been prepared and submitted by me. I have banked with HSBC since the start and they provided me a good reference for taking on my premises. Likewise, I have a good record with them and no borrowing nor have gone overdrawn.

I had 2 defaults 4 years ago (one for a loan and another for a mobile phone dispute) which were settled and I haven't had any adverse credit or missed payments since...but it is a bit of a blot on my file. I have a credit card with a balance of £4k (which I can clear and mainly kept on so I had an active credit account / regular repayment) and otherwise have no other debts. From what I have read, a lot of companies disregard defaults after 3 years including the Help to Buy scheme?

I am really clueless as to what my chances of a mortgage would be, hence posting openly and honestly on here! Also as to how much I could borrow/what the lenders require etc. Whilst there are calculators online, I know it largely comes down to personal circumstances.

In an ideal world I would like to put as little money in as a deposit as possible but could comfortably put in say £25-30k if needed. I would prefer to keep as much cash in the business/stock as possible as ultimately would favour a higher repayment with a higher income from this money....but to a certain degree am flexible.

Anyway, sorry to waffle on!! but any help/advice would be really very much appreciated!

Thanks in advance

Chris

dimbo61

Self employed with own business and accounts would mean one for the brokers

ACG

There are lenders this will fit with, but you have not said what you want.
Lenders tend to use an average of the last 2-3 years income and multiply that by arund 4-4.5x the average as the maximum they will lend.

There are however lenders who will used the latest years income instead or an average of wage+ net profit (rather than wage and dividends) to work out how much they will lend.

Combining adverse with the self employment it probably is a good idea to sit down with a broker, but as I said, I am sure there will be options.

amnblog

Your situation is complex due to three areas.

Defaults
Self employment
Retained profit

A good broker can sort this for you. Any direct applications or applications through an inexperienced broker will crash and burn.