Am I being realistic?

dimestorediamond · 16 October 2016 at 7:09PM

Hi everyone.

Next year, I'm going to try to get a mortgage. A couple of family members think I am unlikely to get one and wondered if anyone else has an opinion. When I'm ready, I will definitely use a mortgage broker because I know I am not the ideal candidate.

I am self employed and have been for almost six years. I pay myself a little shy of £13k. I know it's not a huge amount, but I have been able to consistently pay myself the entire time I have been in business. This year I moved to this figure, a pay jump of around £1.5k. Business is fine. Generally consistent and in an industry that I would consider stable.

I have zero debt, no overdraft and one credit card that is currently used solely to put petrol on and then pay back asap.

I will be the only applicant on the mortgage. Property prices are quite low in the area, I'd be looking at £65-75k. I am open to new build or older properties (that do not require substantial renovation). I will have a deposit of at least £7k, which on some properties is over a deposit of 10%.

I am also willing to utilise help to buy schemes. I'd consider shared ownership properties but these are not abundant in my area.

Mortgage calculators vary between £40k-£63k but they don't take into account that I am self employed, which I am told will be the biggest sticking point.

I guess I won't know for sure without making enquires but I am not quite ready but feeling a bit deflated at the thought of all the hard saving and it ending up coming to nothing.

ACG · 16 October 2016 at 7:19PM

Sounds like your being realistic, I think the higher end of what your looking at may need abigger deposit but it should be achievable.

dimestorediamond · 16 October 2016 at 8:56PM

ACG wrote: »

Sounds like your being realistic, I think the higher end of what your looking at may need abigger deposit but it should be achievable.

Thanks, ACG. I agree that the higher end of the scale may take a little longer to save for. Hoping I can be under 70k, but will need cash for fixing up as a result.

amnblog · 17 October 2016 at 8:17AM

dimestorediamond wrote: »

I pay myself a little shy of £13k.

This means little to a Lender.

Are you running a Limited Company, or are you a Sole Trader or in a Partnership?

If a Limited Company profit before tax is the important figure.

If a Sole Trader or Partnership, net income after deductible business expenses is the key factor.

It is not about what you transfer from your business bank account to your personal one as 'pay'.

dimestorediamond · 17 October 2016 at 10:53AM

Thanks, I new it was something like that, but wasn't sure quite how it was worked out. I am a Sole Trader and the net income obviously varies from year to year, but it's never more and a grand or two higher than what I pay myself.

My only concern is that last year, my net income was lower than my average. I took reduced hours due to illness (now recovered completely). I was in a position where less income was fine because I did not need to worry about outgoings but thinking about a potential mortgage was not on my mind back then.

Am I being realistic?

Comments

Categories

Get our FREE Weekly email full of deals & guides - and it’s spam-free