Complete confusion over property ladder - help! (self employed)

[SpecialSnowflake]

Please could someone help me understand how this works? We've spoken to a couple of mortgage advisors and are even more confused than before! Apologies if I'm being dim, but I'm rather number blind and am finding this very difficult to understand.

Basic situation:

We own a house we bought 5 years ago for C£230k, which is likely to sell (v quickly, desirable) for C£320k. Mortgaged for £200k.
When we bought we were both employees, earning C£25K each, to a household total of £50K (ish) pa.
Now I'm a SAHM, and DH is self employed earning approx £60k pa, so our household income has in fact risen.

We want to buy a house for about £350k, which needs serious work doing to it so want to borrow an extra £50k (so DH says, but we could prob do just the bare essentials for less and live in DIY hell for a few years).

To move our mortgage over to the new property the mortgage co say we need a deposit of minimum 5% (= £17,500 to borrow £332500), and due to the change of employment it would be treated as a new application, but they'll accept two years of proof of income (via accountants certificate).
They won't lend any more than the value of the house.

Other mortgage advisors have said that as DH is self employed he would need to provide them with contracts proving current work, but his work can be on a rolling weekly basis or for a month, or even daily - so this won't work.

We don't have enough savings to cover the deposit, just enough for the conveyancing etc.

So how do we do it? Does everyone have £15-30k saved up before they move, or does the deposit go up the chain once our house has sold?

My theory is we sell our £230k house for £320k, making £90k 'profit".
Pay 5% deposit of £17.5k, leaving £72.5k 'profit'.
Borrow a further £132500 (?) on top of existing mortgage, making a total of £332500 borrowed, to new house value of £350k.
Purchase house for goal of £350k inc deposit
Then use the £72.5k to do the works required to make it liveable, ideally this would come in under 40k.

The purchase price may well be more than £350k, these are just guesstimates at the moment (house being sold is vacant and we currently have 'first refusal').

Does that work, or even make sense?
Any replies appreciated.

DH and I have been offered approx 5 times combined salary with 1 child. Our broker told us 5x was fairly standard for second time buyers and for higher property values as the amount you need to live on doesn't increase in proportion to your income. Our combined income is about 100k so we've been offered up to 500k.
I'm not surprised to hear 4.5 or 4.75 times.

As others have said speak to a good broker! Happy to pass my broker's details on if you PM me. She's free and found us almost the identical deal to a fee-costing broker who I spoke to a while ago.

We pay huge amounts of rent (we are in London) and are also able to save money so we can definitely afford it.

My main 'expense' after paying rent is my undergraduate and post graduate student loans - the latter reduced what they'd lend to us quite a lot even though it's only £5k outstanding so they are applying limits and not being too irresponsible!

You have your answer on the ratios but I think your mention of 5% minimum deposits is confusing things. Deposit will be passed up the chain from your buyers, that's a technicality. What matters is the equity that you bring to the next house, and having that equity at greater than the minimum is key to moving up the "ladder".

Your current equity is £120k and you would ideally want to buy a house worth £30k more, plus pay moving costs of 15k, plus take out a cash sum to fund work. Let's say you don't take the renovation cash out. So you want to take £15k out of the equity, leaving £105k. That is over 25% of the £350k value of the house you're buying - great. You'd need a mortgage of £245 which is a shade over 4x his salary. It's not easy but it may bring it into the realm of the possible if you don't take the cash lump sum out. Plus your monthly mortgage costs will be lower and you might be able to get a better rate with the higher equity. I think you'd be quite stretched though, it's a high mortgage to pay on top of keeping the whole family on one income, and funding renovations on top would make it that much harder.