Moving to Self employed next year...what mortgage choice now?

immy

Hi,
I am a FTB looking to purchase a house in the very near future i.e this month.

Currently employed full time. In the future(within 12 months) i am looking to open my own business and going self employed.

My current mortgage options are 2yr/3yr tracker(on assumption , rate will go down) or go with a fix mortgage for 3 or 5yrs.

What would be the better option for me mortgage wise, taking into account my future work plans. I realise that if i go for a 2 yr deal, then come remortgage time, i might not get such a good deal due to being self employed. I am assuming that its frowned upon mortgage wise to be self employed with less than 3 yrs accounts and as a result will give me poor rates.

So with this in mind, should i really only be looking at 4 or 5 yr mortgage deals just now for my first house purchase?


Advice welcome.

herbiesjp

Are you sure a tracker deal is right for you?

Rates may go down, but they could also go up. If this is a new venture how sure of your income stream can you be? If you looked at fixed, at least that will allow you to budget effectively.

You are right about the term you should be looking at - if you were to look at 2 year deals, then that will seriously limit the lenders and rates available to you. If you took a deal, that meant you had 3 years worth of accounts under your belt, it opens up the whole market place to you.

Please remember that when you are self employed, Net profit is very important. Whilst you try and keep this low for tax purposes, it needs to be at the right level to get a mortgage agreed for you when it comes to re-mortgage time

immy

What are the best 4 or 5 yr fix deals out there just now?

It would have to be 90% or 95% LTV as i am FTB

My income is 32.6k, with 8k outstanding on a car loan(repaid fully by apr 2009), 8k on CC (3.9% life rate),
Wifes income 22.8k, no debts.

Currently living with parents.