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Starting business while waiting for mortgage offer
anxioussquirrel
Posts: 26 Forumite
Hi, I need a bit of advice, I hope I have come to the right place.
Long story short, my partner and I are applying for a mortgage with the Clydesdale (in Scotland). My partner has been with the same employer for many years and has been working through the pandemic, while I have been furloughed. Unfortunately my employer is in a badly hit sector, but we are in regular touch and they're hoping to get me back soon which I look forward to. However I've also been using this period to think about my own business and I want to do it on the side in the longer term. It was partly what prompted us to jump on this house with a bit more room. Since the furlough I have been working a lot and now I'm ready to launch the website. Am I crazy?
The main worry is, if I register with HMRC as a sole trader, would I have to tell the bank about this or would they know about this anyway and get into even bigger trouble? My employment status would be unchanged, this would be an "extra". I have been told by accountants that I can start trading and turn over £1000 without even registering. To be honest and realistic, I don't really expect to reach this threshold very soon, but I don't know if it's something that could affect the mortgage application or not. (I'd use a different bank account for trading and obviously not open a proper business bank account until we've moved due to the credit checks etc.)
Some additional information: I'm unsure if the bank even counts with my salary as Clydesdale won't count with furloughed income according to their website, although the broker submitted mine anyway at 80%, and he also thinks that the affordability on my partner's income alone would be fine (little less than 3x his and approx 2.5x of our combined.) I have filled in their calculator too and it seems we are borrowing by about £20k under of what we would get if I had zero income so I'm hoping this will be fine but I'm really worried. It's an 80% LTV mortgage on a second home (we are living in my partner's house which we want to rent out later.) The broker thinks we'e ideal clients and we have no children and no other loans, credit cards or car finance.
I want to succeed in both fronts but I have never bought a house or started a business before. I'm very nervous obviously and maybe it's stupid to do the two at the same time but I hope some more information can put my mind at ease. Thank you.
Long story short, my partner and I are applying for a mortgage with the Clydesdale (in Scotland). My partner has been with the same employer for many years and has been working through the pandemic, while I have been furloughed. Unfortunately my employer is in a badly hit sector, but we are in regular touch and they're hoping to get me back soon which I look forward to. However I've also been using this period to think about my own business and I want to do it on the side in the longer term. It was partly what prompted us to jump on this house with a bit more room. Since the furlough I have been working a lot and now I'm ready to launch the website. Am I crazy?
The main worry is, if I register with HMRC as a sole trader, would I have to tell the bank about this or would they know about this anyway and get into even bigger trouble? My employment status would be unchanged, this would be an "extra". I have been told by accountants that I can start trading and turn over £1000 without even registering. To be honest and realistic, I don't really expect to reach this threshold very soon, but I don't know if it's something that could affect the mortgage application or not. (I'd use a different bank account for trading and obviously not open a proper business bank account until we've moved due to the credit checks etc.)
Some additional information: I'm unsure if the bank even counts with my salary as Clydesdale won't count with furloughed income according to their website, although the broker submitted mine anyway at 80%, and he also thinks that the affordability on my partner's income alone would be fine (little less than 3x his and approx 2.5x of our combined.) I have filled in their calculator too and it seems we are borrowing by about £20k under of what we would get if I had zero income so I'm hoping this will be fine but I'm really worried. It's an 80% LTV mortgage on a second home (we are living in my partner's house which we want to rent out later.) The broker thinks we'e ideal clients and we have no children and no other loans, credit cards or car finance.
I want to succeed in both fronts but I have never bought a house or started a business before. I'm very nervous obviously and maybe it's stupid to do the two at the same time but I hope some more information can put my mind at ease. Thank you.
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