Chances of a Divorce Buyout Mortgage for Self Employed Home Owner

SolihullSlinger

Me and my wife are getting divorced, our home - which is in both our names - is completely paid off and has been valued at £200,000. I want to get a remortgage for £100k to buyout her share. I am able to use £15k of our split cash as a deposit towards, leaving an £85k mortgage required.

Here is my finance stats:

• I am self-employed and only made £15,000 in the 2019/20 tax year,
• I am on track for £30k this tax year of 20/21.
• Previous tax years for the last 7 years or so before that of my self-employment have been a small loss, due to my wife being a salaried employee of the business until March 2019.
• I have been self-employed since 2005.
• So an average income split over these last and current 2 years would be £22.5k, so using the bank mortgage calculators it should be achievable to get that £85k target.

Ideally, I would wait till May 2021 to apply so I can use both tax years' income proof. But recent changes(April 2021) to Capital Gains Tax and PPR means if we seperate and do a buyout over tax years, she may be liable for CGT bill on her half. So it is all a bit of a pickle.

How likely am I to get a mortgage with just one year's positive salary history, but putting my £100k equity share of the house on the table as well? 

SolihullSlinger

This was the mortgage calculator I used, however as my circumstances are a little different from normal (self employed, buyout, house paid off) I am wondering how hard it could be
https://www.barclays.co.uk/mortgages/mortgage-calculator/borrowing-calculator/#/borrow

MovingForwards

Getting a mortgage with self-employed income is hard and gone over with a fine tooth comb.

Do you have a broker to chat with to see what your options are? If not have a word with @Deleted_User @haras_n0sirrah or @ACG to see what can be done or whether you will need to wait a bit.

haras_n0sirrah

There are lenders who will accept 1 years accounts however if there is a sudden increase you may well need an accountants confirmation of why it has changed

Thrugelmir

Your forecast income for 20/21 won't be taken into account. Without it though you are likely to struggle.