My journey. Self employed and want a new final home. It's complicated.

Prosperous1

There are many threads about saving for a deposit or buying a house but my scenario is complicated.
This is more of a journal so I can track progress and also gain advice and insight from others.
I'm 36 (37 in a few weeks) married with 2 kids and run my own business. Even though it's a Ltd co technically I will be classed as self employed for a mortgage as I understand.
So the complications...
I was discharged bankrupt due to losing a huge business in 2008 recession...
We have a mortgage on our current house which we bought for 250 in 2007.
We own a btl jointly in our personal names which we paid 70k for in 2007
We also own a btl in my other Ltd co which we bought for 106 in 2007.

As this is the buying selling and renting board we thought we'd tick all boxes..
We plan to sell the main house. Spend 5k doing it up and hopefully pull 25k profit.
Also probably sell the cheaper btl and probably only make a 5-10k profit but will be worth it to ease the burden and add to our affordability criteria.

The complications come from needing an adverse credit mortgage. (No ccjs or anything but a few missed payments here and there and a default)

A self employed mortgage with only a year's Ltd
Co. accounts.

Finding a deposit which looks like at least 15 percent and we want something with land in Wales so looking around 400k purchase..

Hoping to have the funds in place in 12 months and also have cleaned up any credit file issues to strengthen the chance of a new mortgage.

Feel free to follow..chip in..inspire.. doubt.. all welcome.

Will update as and when.

Here's to an exciting journey

Mrs36

I think with only 15% deposit you may find it difficult. I am not a mortgage broker, but I have had mortgages based on self employed income and without 3 years accounts you will struggle I think. Add into that some adverse as you say and it may be a challenge. Do you have a mortgage broker? It would be worth having a chat with them.

Not trying to burst your bubble, hope it all works out for you, but it does seem a little ambitious with only 15% deposit - any chance of increasing that over the next 12 months?

Prosperous1

Morning Mrs36.
Absolutely understand. The 15 percent is the minimum and was based on looking at specialist lenders such as precise etc and their lending criteria.
There is definitely scope for raising the deposit. I'm looking at opening my second branch.. We are also looking at profit from the sale of our main home and rental and also have another money make just about to kick off.
Thanks very much for your input.
I will see a broker nearer the time but I've always used a broker so they propose it with a better chance of getting approval and also they know their lenders better than most

Davesnave

"Something with land in Wales" is a trifle vague, but my first reaction is that one can have that for considerably less than £400k.

So if compromises must be made.....

AdrianC

I'm surprised you came out of a bankruptcy with two BTLs still owned...

silvercar

AdrianC wrote: »

I'm surprised you came out of a bankruptcy with two BTLs still owned...

I agree. I would check that there are not restrictions placed on you selling these.

theartfullodger

Prosperous1 wrote: »

I was discharged bankrupt due to losing a huge business in 2008 recession...
We have a mortgage on our current house which we bought for 250 in 2007.
We own a btl jointly in our personal names which we paid 70k for in 2007
We also own a btl in my other Ltd co which we bought for 106 in 2007.............

How can the bankruptcy process have been correctly followed yet your share of one house was not taken from you (the joint name one) and the assets of the "other Ltd co" not taken from you, including the btl that the Ltd co bought - you didn;t buy it - in 2007?

On the face of it, as I understand your description, some fraud has taken place. No doubt I'm a stupid old man incapable of understanding these complicated matters, please set me right.

Pixie5740

The properties were bought in 2007, maybe they were in negative equity at the time the OP went bankrupt.

ACG

Precise do not accept ex bankrupts as far as I am aware no matter how long you have been discharged.

Have you put money aside for the higher stamp duty? If you own more than one property you have to pay higher rate stamp duty (£22k instead of £10k on a £400k property).

You may also find the land is an issue - depending on how much land there is.

Thats the negativity out of the way.

There are potentially lenders who will do it but it will not be easy. I would get your credit report over to a broker sooner rather than later as that will at least let you know what is possible. With 2 years accounts I would be relatively confident, with one years accounts it is a little hit and miss.

Prosperous1

Wow. Firstly no fraud took place whatsoever. As someone rightly pointed out my properties were in negative equity. However regardless of this there is an appointed person called the Official receiver who ensures that the maximum amount from each case is recovered. This meant I had to pay 19k to keep my share (beneficial interest) of the rental properties, even though in negative equity and based on forward rent income. Nothing and I mean nothing can be kept or hidden from the official receiver. I had face to face interviews, all my accounts both business and personal were forensically examined by them. I'm not a criminal, just someone who had a business fail in the recession.
Believe me, I am not an opportunistic bankrupt that milked the system. I had a highly successful rapid growing business, that employed 52 staff. Then the recession hit. Either pay my staff or pay HMRC, they would not wait or let me stagger the payments as they knew I had money set aside to pay my staff and threatened bankruptcy so I done the moral right thing and paid the staff, and declared myself BR. Had there been any wrong doing I would have been disqualified as a director or had bankruptcy restriction orders placed against me.
Everyone is entitled to their opinion, I can hold my head up high knowing I paid my staff and many still speak to me to this day.
Appreciate everyones input, even if it is to accuse me of fraud :-)

Prosperous1

@ACG Thanks, in all honesty as its 12 months off I will be able to supply 2 years accounts then. Thanks for your advice