Self employed, make loss 2nd year.

swman

Hi.

I would like some advice as I expect to make a loss or break even in my second year of trading, for reasons too complicated. My first year (2015-16) made a good profit. I am currently trying for a mortgage with only 1 year of accounts so my options are limited and I am unable to get a mortgage that is portable (it MUST be portable). I will have to pay the early repayment fee when I sell my property next year and will then search for a new mortgage that IS portable (I sell properties).

My main question is: will I be able to put my first and second years accounts together and form an average between them when applying for next year's mortgage? For example 30k divided by two equals 15k. What other options are there?

Cheers.

Mortgage_Moog

I'm self employed and just got a mortgage. Some places now accept only 6 months of accounts but many will want 3 years accounts as well as 3 years of SA302's. I was always told the amount was averaged out but it didn't apply to me as my income was the same three years running.

From my research I found that some places average it out and some will run a mile if you show any kind of loss. It all depends on which of the dozens of lenders you choose from. You may want to go to a broker for help but I did that and they told me I had no chance. 3 months later I moved in after just doing it all myself.

Thrugelmir

What you define as "portable"?

I expect the product that you are seeking doesn't actually exist.

ACG

Thrugelmir is correct. Portable is not a guarantee that you can move your mortgage to a new property. Portable means when you move house, you can apply to move your mortgage to the new house and therefore keep the deal you are on and not incur any early repayment charges that may be applicable.

However, when you apply you will have to provide up to date proof of income and payslips and pass a credit check.

As far as I am aware you will not find a lender who will average out 2 years accounts if you are losing money. There may be a lender or 2 (although I can not think of any off the top of my head) who will average them out if you make a small profit - even £50, but I would not rely on that.

Speak to a broker, investing in a decent one might help to prevent any costly mistakes or argument with lenders down the line.