Is a mortgage possible in this case?

Alan_Cross

My son has just reached 40 and has always rented. The basic facts are:


£100k deposit available


loan of £50-60k required


Income proofs difficult (self-employed) but tax declarations may be available


Happy to answer any other questions but can anyone offer any thoughts?

ACG

MAY be available? He will need at least 1 years if not 2 to get a mortgage.
As for the amount he is after, it will just come down to affordability.

You can not have your cake and eat it. If he is not declaring his income to the tax man, then he can not evidence his income in a way that will get him a mortgage.

Alan_Cross

ACG wrote: »

MAY be available? He will need at least 1 years if not 2 to get a mortgage.
As for the amount he is after, it will just come down to affordability.

You can not have your cake and eat it. If he is not declaring his income to the tax man, then he can not evidence his income in a way that will get him a mortgage.

He is declaring his income but is less than efficient with keeping documents and records. When you live in a succession of rented rooms and house shares, meticulous record keeping is not always an easy matter, as I know myself... and this is often all too readily derided by those who live a settled existence in comfortable, multi-bedroomed properties...

My question stands. Let us assume the availability of a few years worth of HMRC tax calculations/statements. I would love to hear from anyone able to offer thoughts about what might be available to him.

Thrugelmir

Evidence of the source of the £100k will be a basic requirement of any lender. Be even more problematic if the stated earnings are insufficient to explain the source.

Alan_Cross

Can previous years' tax calculations not be requested from HMRC, in any case?


https://www.gov.uk/sa302-tax-calculation

Alan_Cross

Thrugelmir wrote: »

Evidence of the source of the £100k will be a basic requirement of any lender. Be even more problematic if the stated earnings are insufficient to explain the source.

Family funding supplementing accrued savings, roughly 50/50.

Davy_Jones_II

Alan_Cross wrote: »

My son has just reached 40 and has always rented. The basic facts are:

£100k deposit available

loan of £50-60k required

Income proofs difficult (self-employed) but tax declarations may be available

Happy to answer any other questions but can anyone offer any thoughts?

Why can he not get his last few years of tax returns from HMRC?

Alan_Cross

Davy_Jones_II wrote: »

Why can he not get his last few years of tax returns from HMRC?

Acknowledged in post 5.


Still hoping for some help.

ACG

Is he declaring his income to HMRC and can obtain SA302s (or tax calculations and tax year overviews as they are now known)? If he is a sole trader, he does not need a accounts. If he can obtain SA302s then he is can get the necessary documents. As mentioned 1 years minimum but options will be limited, 2 years in an ideal world.

It sounds like those documents may be possible. If so, then it would just be a case assessing his affordability.

[Deleted User]

Alan_Cross wrote: »

Acknowledged in post 5.


Still hoping for some help.

What help are you hoping for?

To apply for a mortgage he will usually need:

2 years sa302/tax year overview documents
3/4 months bank statements
proof of deposit and any associated gifted letters
ID
Sometimes a copy of credit report to verify commitments

None of this is very difficult to obtain with a few weeks headstart even if he had none of it now.

He would be able to borrow 4-5 times the net profit figure on sa302 if he is a sole trader, or the salary+dividends if he is part of Ltd company

This is a very simplistic summary but without more info about earning, outgoings, credit history etc I dont think we can offer much more

if by 'income proofs difficult' you mean he hasnt kept invoices etc over the years then that doesnt matter, lenders work off the amount submitted as earnings to hmrc

Davy_Jones_II

As above, he’ll likely be able to borrow around four times his declared earnings, and will need proof of how the deposit was acquired.

If the deposit is gifted then it’ll reduce the pool of lenders.