Mortgages for self employed

Claire_Jones_3

Hi,

I need a bit of assistance! I'm trying to look into some better deals for a friend who is self employed. He has over 3yrs worth of books from his accountant. Do high street lenders accept self-employed or do we only have the option of other lenders?

Also would it be possible to arrange a re-mortgage for someone self-employed if they have less than a yrs worth of books?

Thanks
Claire

UK007BullDog

Due to the credit crunch et al,

your friend with his 3 years books can go and get a regular mortgage.

your friend with a one years set of books might need to self cert, but will be jumping through lots of hoops.

So suggest for friends to find a broker to help.

A lot of brokers wont touch self cert anymore because the FSA is watching eagle eyed.

Claire_Jones_3

Thanks bulldog, the 1yr books might be me in mar 09. I'm looking to become a childminder but mortgage deal runs out next yr so weighing up the pros and cons.

My friend with the 3 yrs books says thank you as well!

MortgageMamma

just a quick add on here, I used to be a childminder when i took a career break to raise my kids. make sure you register self employed with inland revenue as soon as you start trading, don't hang about. most lenders these days will not take into account self employed income unless you have been trading for 6 months, including on self certifiction mortgages. and they ALWAYS ask for proof of self employment, which obviously would be your correspondence from Inland Revenue confirming self employment.

MM

Conrad

Having books is one thing, but its the net profit after ALL expenses which lenders use as an income figure.
For self employed individuals this is often an issue as they pay Accountants to keep the declared profit as low as possible in order to minimise Tax.

Claire_Jones_3

Thanks MM, will be registering with IR when I start, just waiting for Ofsted registration cert and CRB checks.

Thanks for the info as well conrad, will check his books. My friends have obsolutely no idea when it comes to mortgages and they've spoken to Advisors in the past who haven't helped the situation. In the end they just said to the advisor to do whatever is best, they ended up on a rate with extended tie-ins with a really poor rate in the first place!

Can things such as child benefit, working families tax credit, council tax benefit etc count towards their income? When I organised my own mortgage it was much simplier, 2 employed incomes, no benefits, children or other debts.

maryjane01

My husband is self employed (well actually just went to a limited company situation). First Direct and HSBC are not asking for any accounts as he does not even have 1 year yet. They are asking for tax returns and P60's for the last 3 years, this is only because he is doing the same type of work as he was when he was full time employed. If you are a self employed child minder but previously worked in childcare it may be worth going to either of these lenders

Claire_Jones_3

Thanks Maryjane. Unfortunately I'm having a complete change fom Banking to childminding!