Self employed- getting a mortgage?

[Stephen Blair]

Good books and savings, it's that simple.

Work out how much you need to borrow and then work back the way, if it means working 7days a week for 7 years, and living in a caravan or container and writing very little off against tax to make your profit as high as possible then this is what you will have to do.

Chase contracts, something in writing to guarantee income helps, also being healthy and paying bills on time helps too.

Imagine if someone asked you for £150k over 25 years, what would you want from them to guarantee they pay you back?

[gibbon]

Our mortgage was thru the bank we use for the business. they knew all our history and were able to make a more informed decision about our ability to repay.

 

We took out a larger mortgage last year and our business is the sole income for me and my wife. We couldnt get a deal anywhere that was close to what our own bank could offer. We took it out over 30 years this time but make overpayment to keep the term the same as it was before. By taking it out over the longest term available then paying as much as your can afford you have the option to reduce payments in the future if you fall on hard times, without incurring an additional arrangement fee for arranging a new mortgage. Because interests rates can not go down, our bank advised us that if you can not afford to pay £200 a month more than the current monthly repayment your most likely over stretching and will struggle when rates begin to increase

Edited May 7, 2012 by gibbon

[Paul Barton]

I got a mortgage in 2005 when had been self-employed for only 2 years and it was a nightmare. I don't think I would have managed if I hadn't used a financial adviser/broker and had a decent deposit.

 

I recently moved and re-mortgaged but now I am employed and it was ALOT easier!

 

I realise that lenders need to be careful about mortgages now, but in my opinion it is way too hard these days if you are not an employee.

 

It is one of the major reasons that would stop me leaving formal employment again in teh fuure - I got treated like scum by every bank I talked to when I was self-employed, it sucked!

[nick channer]

i bought 3 propertys in 2005/6.. no accounts.. just a building society payin in book to show income of some sort.. put 30% down on each and was peice cake.. that was then.. house prices were going up so much on a monthly basis that my first house i bought in early 2005 had gone up by nearly £20.000 in few months from offer being accepted to completion.. 7 yrs later its still worth the same. as are all the others.. i'm lucky i live in a good area where house prices have stayed at same level. some have gone up.. others inc mates mine have not been so lucky and although not looking at negative equity would loose 10's thousands if they were to sell now..

[Kev Stephenson]

We moved about 6 months ago and although my accounts show a healthy income and have done for the last 5 years the bank would only give the mortgage instantly if they listed me as unemployed. My wifes wage (employed) was enough for their computer system, hence it did not need my income but if they added it they mortgage had to be referred. This was with the same bank I have my company acounts with and have no debts at all other than the mortgage.

 

Totally crazy

[Drayton tree care]

I couldn't get one because I stupidly didn't draw enough money into my personal account meaning low credit score

[rovers90]

I was a mortgage advisor for Barclays up until 2009 and used to cringe when I knew a customer coming in was self employed (unless they were a dentist or a doctor!). We always had a very strict lending policy and for self employed we required three years accounts and used to take an average of the net profit. However, following the problems with the economy we then had to look at any finance commitments and deduct a years worth of payments of 3x net profit. A budget planner also had to be completed and enough surplus left to meet FSA requirements for a couple or a couple with a child,etc.

 

I would always advise people to shop around when it comes to a mortgage as policies to vary between lenders as a lot of what the FSA issues are guidelines and it depends how strictly a lender wants to follow those guidelines. And never just see one "independant" advisor - when I was interviewing customers who had been to an independant I could always guess which were the top three lenders they had told the customer about would be;not rocket science, its just those were the three companies that offered the best commission to the advisor! So shop around and always ask your own bank - its the biggest financial commitment in your life so make sure you are happy with the advice and deal you are offered.

 

Good luck.

[rovers90]

Good books and savings, it's that simple.

Work out how much you need to borrow and then work back the way, if it means working 7days a week for 7 years, and living in a caravan or container and writing very little off against tax to make your profit as high as possible then this is what you will have to do.

Chase contracts, something in writing to guarantee income helps, also being healthy and paying bills on time helps too.

Imagine if someone asked you for £150k over 25 years, what would you want from them to guarantee they pay you back?

 

Good advice Steve. Good books is very important, bank cash as well as cheques otherwise you are just spoiling your chances later down the line.

[T & C Tree Services]

Thanks everyone for the info and advice! Appreciate it! Wish me luck

[Tom10]

Thanks everyone for the info and advice! Appreciate it! Wish me luck

 

Seems your going to need it

 

I vote you buy an acre of land and build a wood house