OT: Completely unrelated but advise on Mortgage plz?

R

RX-78

Active member
 Liverpool
Got nothing to do with the Zed what so ever - well except may be for the massive dent my lovely Zed has made on my finance :P

Anyone any good with mortgage here? I've got a new job (well I'm becoming an employer) and with that I'll have to move house. Put my place on the market and it's all going well - or so I thought. As I'm now classed as "self employed", and only just registered as this, no mortgage company will touch me despite the business I'm joining have established track record and and my predicted earning being 30% more then what I made (as an employee else where) last year.

Called a few places today and all told me I'll need atleast 1-2 years of track record as self employed for them to even bother looking at me :o Thats rather desparate as we'll need to move, we dont have enough to buy a place right out, and cant get a mortgage despite being able to pay 25% deposit! We can rent but thats a triple wammy - I'll have to pay rent (which will be just as expensive as mortgage), have money from sale of the current property setting in the bank & loosing value (due to inflation) and also watch the house prices escalate up again!

Does anyone have any bright ideas :cry: ?
 
I think you've fallen into tone of the traps of the lending world and one I learnt abot a decade ago when leaving the corporate world to set up my businesses.

As a self employed person you are classed as much riskier in the first few years. Something like 80% of businesses fail in the first year, so with good cause.

Secondly your income is often hard to define and prove so you have to get into self certification where basically you work out what you earn and declare it. Since your likely to inflate it most require 2 or 3 sets of accounts or something to prove income and it's sustainability.

You don't say how you're self employed and that can make a big difference. If you're say and IT contractor for a large company then that's a lot less risky than say a new franchise owner.

I suggest a specialist self employed mortgage broker and take some current advice on the best route to get a mortgage without ehorbitant rates or conditions. Same will btw happen with credit cards, overdraft, car finance, etc. for the next couple of years

A bit late now but many people get the mortgage offer based on their current job before they have moved on to become self employed.
 
3 guys i know have had a similar thing.

they all needed to move for work.

they all own their own houses. all of them are moving to where they need to be. renting out the places they own then renting somewhere close to work.

Keeps you one the ladder so to speak and gets you the location you need

Simple. and seems to have worked. plus it means you can familiarise yourself with a new area but not get tied to it due to buying.

Does that help? rent for a year then you'll gt the accounts you need. plus you might end up saving a little. depending on the rent in/out/current mortgage balance.

David
 
Thanks guys :thumbsup: I'm in health care and its quite frequent for my profession to become self employed at my stage. Only problem is, unless your are lucky enough to have got the job before finishing the training, you have no choice but becoming a self employed agent whilst looking for a new job. And so we couldn't move before getting a new job as we had no idea where we might be living next (I would have lived in highlands of scotland if there was a job going there).

We did think of keeping the property & renting it out but its a flat - and as we have an incling its not perfect and will run into few problems in the next few years (including depreciation) we really want to get rid of it.

I'm gonna try calling the financial advisor my union uses and see if there is a solution (like specialist broker CJ mentioned), and hope this must be quite common scenario for people in my job. Failing that, I'll live in my Z4, missus can sleep in the boot.....
 
Oh forgot to say, the business I'm going into is an established one for many decades (although the business partners has changed) and as its contract is with NHS, it is almost unheard of for business to go down. Its a problem finding a lender that understands that though!
 
RX-78 said:
We did think of keeping the property & renting it out but its a flat - and as we have an incling its not perfect and will run into few problems in the next few years (including depreciation) we really want to get rid of it.
Click to expand...

Depreciation is long gone for another 10-15 years in my opnion - house prices have nearly reached their 2007 prices now (well in London they have). I think renting your current place and renting else where is a good option.

There also another option... How much of a house could you buy outright? You could try those buy part/rent part schemes, where you buy a certain % of the property and rent the rest. Could be an option?
 
Run a a search on the internet and that will give you a lot of info.

Avoid the pure term 'self employed' and say what you do professionaly. I'm a banking consultant, run a limited company and list some top global banks as clients. It may sound like semantics, but I'm really self employed as I own the company and it groups me in with the franchise guys who does the lawn to the sellers of the 'Big Issue' to the local painter. I'm not commenting on any group, rather showing how we draw conclusions, just as my risk models do too :).

I'd focus on being a partner in a practice or whatever that has traded for xx years. I'm sure you can be creative and get proof of sorts from existing partners.
 
Thanks CJ :thumbsup: I've mentioned I can get the accounts to prove the tradings but they all said (ok I've only tried a few before I became disillusioned) as it hasn't got my name on it, they wont consider it!

Just been thinking about the possibilites - the missus will be able to get a small mortgage, and with the deposit we'll have we should be able to buy a small place in the area we want to live in. May be that'll have to do us for couple of years, and may be sell up (or even rent the place) when I have enough trading account to get a decent mortgage.

A tad disappointing :(
 
Sad fact is, if you're a partnership/sole trader, you ARE the business, so if your hand is new on the tiller the lender is right to want to start from scratch, regardless of how successful the business has been in the past. And with self-cert mortgages dead and buried for now, there are really no options open to you at the moment in terms of getting a new mortgage, apart from the one you suggest about your wife getting one in her name, but thats going to be subject to current (lower) multipliers.

Might be worth talking to brokers like Town & Country in case they have something up their sleeves; I've used them in the past for some quite nail-biting applications and they can be useful in helping you to assess how "creative" you can be....

Renting out your flat ought to be fruitful though and give you time to build up a trading record (just don't be tempted to cut corners by being a DIY landlord!)......good luck and hope you've learned a useful lesson about timing :)
 
Thanks lacroupade :)

Been doing the maths and we've found several (although less desirable) places that we can buy. Might try and knock the price down abit in an attempt to make sure I can recoupe the money when its time to sell in a couple of years.

The estate agents are quite keen for me to let as well but I'm a bit hesitant about not selling our flat - its already got good competitions springing up & with further recession I can see it struggling. We've already taken 20% depreciation compared to the valuation 3 years ago (thankfully we bought it as a plot so I wont loose out), and I dont want to be stuck with it. I'll also need to sell it to buy a new place anyway.

Thought of renting a place near new job but math jst doesn't add up - typical rent will cost me about 18-20k for 2 years, and money that'll be sitting in my account will devalue at the same time. Buying a place (say for 150k), mortgage + moving fees will cost 10K over 2 years - 1/2 the cost & still have a place to sell at the end!
 
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