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Self employed mortgages?

(14 Posts)
Plumpingthepillows Thu 05-Jun-14 23:23:47

Has anyone got any recommendations of self-employment friendly mortgage lenders or brokers? I'm nervously starting to look into buying somewhere but am dreading being turned down or only being offered a paltry sum - want to make the most of my chances by applying in the right place! Thanksgrin

MissMysticFalls Fri 06-Jun-14 06:56:41

Based on our experience, it depends on what your net profit was for the last couple of years. You'll need to either get proof of this from HMRC - can't remember the number of the form SA03? - or the lender will have a certificate for your accountant to fill out.

Very few lenders will only use the latest net profit e.g. Santander. Others use the last 2 as an average. Others use 3.

I think the hardest thing is that if you're self employed you tend to be more careful with your household spending and many mortgage lenders use ONS household averages to work out affordability. Some will take your figures though and use manual underwriters. Try Ipswich Building Society -they're supposed to help "mortgage misfits" like self employed, frugal people!

Finally, I'd recommend using a mortgage broker. If you're self employed - time is money and they can save you hours!

Questionsquestionsquestions123 Fri 06-Jun-14 07:00:47

My husband is self employed- we managed to get a mortgage through Virgin money after being turned down twice by other companies- one was Santander can't remember other one.
As a previous poster said- definitely need to go through a mortgage broker as they will look at the whole of market- not just a select few companies.

Bohemond Fri 06-Jun-14 07:19:45

I used Barclays. They are also my bank for both my business and personal accounts so they know me well.
You will need two years of audited accounts from an accountant or you may get away with two years of accounts plus information from hmrc on the tax you have paid.
I worked up a spreadsheet that showed exactly how much I needed to borrow taking into account deposit and all costs associated with the house move. I also took an annual spending spreadsheet that analysed all of our household spending to show affordability.
We had a face to face meeting which allowed me to show I had a full handle on it and give confidence.

Bohemond Fri 06-Jun-14 07:22:05

By the way, the meeting was 'in principle' so effectively a chance to be 'offered' a mortgage (up to certain figure) without making an application. The application will be made when sale/purchase prices are agreed.
We will not be going to the max so I am confident there will be no issue.

MissMysticFalls Fri 06-Jun-14 07:33:19

Good point behemond we're only at the in principle stage but also not going to the Max. If you google "santander intermediary" you should get the website brokers use and can see for yourself the information you need to supply and the impact it has. If you are only starting to think about moving then I also recommend working your socks off and getting your 2014/15 tax return done ASAP after April 5th to give yourself a really good year's net profit in case you don't end up applying until next year.

MillyMollyMama Fri 06-Jun-14 11:16:04

DH is self employed and we have never had a problem. We have had reasonable value/mortgage ratios though. Did get 90% many years ago but I think it is best to make sure your books are watertight and your income projections look secure. Why not use a broker to advise what companies might be best for your particular situation?. We are with Clydesdale if that is any help.

Sunnyshores Fri 06-Jun-14 20:07:54

Which Mortgages (Brokers)

christinarossetti Sat 07-Jun-14 00:04:20

Just to offer a Lesson Learned as someone who is self-employed applying for a mortgage...

The Nationwide asked me for an account's certificate for last 2 years. Once I'd supplied that, they decided that my accountant doesn't have the correct qualifications, and said that I'd need to supply SA302s instead (available free of charge from HMRC).

The SA302s took over a week to arrive, which didn't create any major problems but, in hindsight, I would have asked for them right at the start of the process (they're free of charge).

soleside Sat 07-Jun-14 14:55:58

I would say definitely get a broker who specialises in freelancers. We got offered a paltry sum by Halifax going direct, then ended up getting the amount we wanted (almost double) still with the Halifax but through a different department by going through a specialist broker. This was after trying with several high street brokers who said we would really struggle.

Plumpingthepillows Sat 07-Jun-14 20:26:32

Gosh, thank you for all the replies everybody. Feeling a bit more positive now, I'll try to find a good broker who can maybe give me some advice.

One question, did those of you who got mortgages approved get roughly 3 times your income or joint income? Would be useful to know income multiples but am presuming 3 times, I know the heady days of 4 or 5 times are pretty much gone now.

Thanks again.

cooper44 Sat 07-Jun-14 22:08:04

I also got my mortgage through Barclays - who I have also banked with forever - and I am pretty sure I got either four times or maybe even four and a half times my net profit.

Lonecatwithkitten Sat 07-Jun-14 22:21:36

Be prepared to fight your corner if you are turned down find out why. I was turned down as the under writer could not find my drawings in the accounts. I was allowed to talk to the under writer and once I pointed out that the drawings were on line 11 of page 9 listed as oh 'drawings'. My mortgage was then approved.

MissMysticFalls Sun 08-Jun-14 19:55:39

Some people still do about 4 or 4.5 times - it really pays to get expert advice. The variation between what different lenders offered was staggering and if I'd not been pointed in the direction we'd have been looking at places 100k cheaper!

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