Self Employed First Time Buyers

Anne91

Hi

My partner and I are both self employed. He runs his own business and I guess I'm considered a "sole trader/individual". We have been saving for about 3 years now and have a pretty good deposit behind us now and ready for the next step.
We went to get some advice from one of our banks and walked away with our first Mortgage in Principle. We are going to do some shopping around to see who can offer us the best deal, but after doing a lot of research online I have a few concerns about the whole process for us.

1. Are there any banks that anyone would recommend are more "understanding" of self employed individuals?

2. Would it be better for us to go to an independent mortgage broker rather than going straight to a bank?

3. I have noticed a few things can make a bank decline a mortgage. Both of our credit ratings are very good and we earn a consistent wage. Basically, my bank accounts, ID, etc are all registered at my mothers address, but my business address is my partners parents house (where we have been staying whilst we have been saving), so I registered to vote in that area. Would this affect anything? Would need to re-register to my mothers area or would I change my bank & ID to where we currently are even though its temporary?

4. I've read that sometimes banks change the amount they originally offered in the mortgage in principle once people apply. Usually lower. I was wondering if this was a common thing?

Sorry for all the questions, I worry a lot and there's probably a lot more questions to come. So I apologise in advance for those too.

Thanks

ACG

1) All banks will understand self employed to some extent. As a sole trader I do not think there will be anything overly complicated about your income as your income is easy enough to work out and it will be on your self assessment.

2) A broker will do the research for you, in terms of finding the best deal, the most lenient lender and also manage it all for you. If you are happy doing that yourself then you do not necessarily need a broker, but it is rarely a bad idea.

3) The business can be registered anywhere. So long as it is close to where you live it should not be an issue. Our office is about 10-12 miles from where I live.

4) It is not common but it can happen. There are typically 2 reasons for it. The first is if the information you entered is either not correct or was not entered how the lender would want it to be entered. The second is if your application does not score highly enough, the lender may cap the maximum LTV to something lower which can reduce the loan amount.


You mentioned something at the beginning of your post, getting a DIP is fine. But I would not go to a number of banks and get multiple DIPs. Even if they are soft footprint credit checks, I would still be reluctant to do it. You can find out how much you can lend by using the affordability calculators. You do not need DIPs.

Anne91

Thank you so much, such a quick reply too. With Question 3, my business/where I'm staying/registered to vote is 85 miles away from my registered "home address". I take it this might be a problem?

Regarding the DIP's, we were recommended to try a couple places. My friend recently bought a house and they did the same. Is there are reason why you would not recommend it? Are you saying we would be better off to do affordability calculators to see who is best then get a DIP?

Thank you!

amnblog

The address situation needs to be managed.

No, you should not be trying a couple of places. See one independent broker and get it right.

ACG

I think amn has covered off the address "issue". It could be a problem but does not need to be with the right lender(s).

In terms of multiple DIPs, there is no need to do it. You have a DIP, you can check what lenders will lend with affordability calculators. I do not know why your friend did that, it just seems like a waste of time if nothing else, but it does also come with some risks if information varies on DIP to DIP - just slight inaccuracies can be a problem.