Mortgage Questions and can i afford this?

x50_spence

When i put my details through a calculator on various sites, including the one on this website.

it comes up as £87,500 - £123,000 is what i can borrow. This is based on two people one earning 30k and other 10k.

However, i can easily afford these prices on the monthly repayments.
The house i am after is £236k with help to buy scheme.

I am full time employed and self employed, we have around a 30k deposit, i earn enough that i can pay the monthly cost of such a mortgage, but the calculators just wont let me borrow anymore than this. So how do i get a mortgage on this house?

I can see you can take out personal loans etc, which seems and expsenive way of doing what essentially a mortgage is.

Is there banks out there that will let me borrow more money?

ACG

How long have you been self employed for?
How much income did you take from the business in the last tax year and the previous tax year?
How much is your employed income?

I think you are looking at it from the wrong angle, you can afford a £236k house because around 20% of it is on a loan you are not having to pay each month initially. But you are also looking at it as rates stand, where as lenders are looking at it from a "what if rates go to around 7%".

x50_spence

Self employed for 2 and a half years.
1st year; £1,915 profit
2nd year; £5,368 profit
3rd year, likely around £8-10k profit

this is the house
4 Bedroom house

£295,000
Available with Help to Buy from £236,000 now

Currently earn £23k, rising to £25k in March from full time income.

Partner is earning 10k annually.

Deposit of 30k.

Can i afford this home?

ACG

As an absolute maximum your going to be able to get £182,000.
I am 99% sure there is an income cap of 4.5x income for HTB. So assuming you can use the full £5,368 (some lenders may average it out over 2 years), you are still going to be short.

If you waited until April and you had £10k, at that point the maximum will be £202,500, but again that assumes you can find a lender who will not average out your last 2 years self employed income and accepts HTB.

x50_spence

wow amazing, thanks for your help.
Would you happen to know lenders who do take things into account who are more friendly with self employed earners typically?

Sahmed660

It's not really a lender thing more a government HTB thing

ACG

I do, but as brokers on the site we are only able to discuss things generically. We are not in a position to start naming lenders as a lot more information is needed. If you are struggling, it would be worth speaking to a broker.

kingstreet

Did you put 3% of the HTB loan and any ground rent or service charges in affordability as an expense?

Have you done the Government's HTB affordability calculator or got it done for you by an experienced newbuild broker?

rtho782

Future earnings are irrelevant. You say it's "likely" you will earn £10k this year, and your partner "will" go up to £25k, but right now you're at £23k and, going on the lowest years profit in the last 2 years, £1.9k.

This is the total - £25k or so - that most lenders will consider. That gives you a max mortgage of £112.5k under H2B.

Lenders won't like you trying to use a loan for a deposit.

I don't mean to sound harsh but you are wasting your time and need to kerb your expectations here.

I estimate next year I will be a billionaire, so I might buy Coop Bank as it's for sale....