Mortgage eligibility for a Freelancer / Self-employed: based on NET or GROSS income?

julicorn

Deleted_User wrote: »

Daily rate x 1000 is crazy high. A day rate of £400 would put a mortgage of nearly £2million available with this calculation.

Surely 1,000 x £400 = £400,000? I'm assuming they mean the multiplier as the total available mortgage amount. Sounds like the other thing you're talking about might be the annual income the lender will consider, in which case that would be £400 (day rate) x 5 (work days in a week) x 46 (weeks they'll consider) = £92,000, which if they'll lend up to 4.5 times the annual salary would be £414,000, so virtually the same amount.

[Deleted User]

julicorn wrote: »

Surely 1,000 x £400 = £400,000? I'm assuming they mean the multiplier as the total available mortgage amount. Sounds like the other thing you're talking about might be the annual income the lender will consider, in which case that would be £400 (day rate) x 5 (work days in a week) x 46 (weeks they'll consider) = £92,000, which if they'll lend up to 4.5 times the annual salary would be £414,000, so virtually the same amount.

Maybe crossed wires. I thought the daily rate x 1000 was the way the base income was being calculated and then lender multiplier on top.

Comes to roughly the same amount i guess, never heard of the x1000 way of doing it

julicorn

Deleted_User wrote: »

Maybe crossed wires. I thought the daily rate x 1000 was the way the base income was being calculated and then lender multiplier on top.

Comes to roughly the same amount i guess, never heard of the x1000 way of doing it

I see what you're saying - yeah, day rate x 1000 would be wild for yearly income, seeing as there's only 365 days in a year.
[I also have no idea about any of this btw, so can't vouch for lenders using one or the other system or something completely different!]

heidiann

Thanks everyone for all the helpful information! It helps me to determine better how far off I am from getting the mortgage I want so I can now start planning a bit better financially.

Also, if anyone has a great broker they can recommend in or around London, that would be great.

Thanks again!