We're aware that some users are experiencing technical issues which the team are working to resolve. See the Community Noticeboard for more info. Thank you for your patience.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!

Recently self employed buying second home

Options
Hello everyone
I wonder if anyone has any suggestions. I think my situation is quite unusual and I have not had much joy searching online or with London and Country.

I have gradually moved from employed to self employed over the past 4 years; doing exactly the same kind of work. I am now completely self-employed.

I also own my house and am (almost) mortgage free. I have a really good credit score, no other debts; not even a credit card.

I would like to keep my existing house worth approx £85000, let it out and buy a second property for about £110-£125000. I have a deposit of £25000.

The problem is that my income for 2017-2018 is £26000 purely from self employed, previous years were made up of only about £5000 or less in self employed and the rest in employed income. So, here is the problem. When my last two years income (self employed) is used to calculate how much I could borrow, it is something like £75000 - not enough. Any future rental is not taken into account. The advice I have been given is to move out of my house, let it out for a few months, and then apply for a mortgage as then the rental income could be included. I have always been careful with my money so this seems counter-intuitive to me.

I know I could remortgage my house to raise capital but, again, the income seems to be a factor. I have both sentimental and practical reasons for not selling my existing house. Any suggestions??

Many thanks to you. I have had sensible and useful suggestions on here before

Comments

  • Lilla_D
    Lilla_D Posts: 359 Forumite
    Third Anniversary
    Hi there,

    Your situation sounds ok to me :)
    a) you have several years of self-employed history
    b) there are lenders who can use latest year self-employed income
    c) you don't have unsecured credit commitments
    d) you have only a small mortgage on your current property (ok, I don't know the amount, but I assume that it's minor based on your post), so if you're going to rent it out, the rental calculation should be ok
    e) if you get a consent to let from your current lender, then you don't have to worry about remortgaging to a BTL deal and most lenders will be happy to give you a resi mortgage for the new property without worrying about your current mortgage.

    Based on all the above, you should be able to get a mortgage for a new property worth £110k-£125k with a £25k deposit. Granted, not from every lender, but I can think of a few who could help.
    I am a Mortgage Broker
    You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
This discussion has been closed.
Meet your Ambassadors

🚀 Getting Started

Hi new member!

Our Getting Started Guide will help you get the most out of the Forum

Categories

  • All Categories
  • 350.9K Banking & Borrowing
  • 253.1K Reduce Debt & Boost Income
  • 453.5K Spending & Discounts
  • 243.9K Work, Benefits & Business
  • 598.8K Mortgages, Homes & Bills
  • 176.9K Life & Family
  • 257.2K Travel & Transport
  • 1.5M Hobbies & Leisure
  • 16.1K Discuss & Feedback
  • 37.6K Read-Only Boards

Is this how you want to be seen?

We see you are using a default avatar. It takes only a few seconds to pick a picture.