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Self Employed

 
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treefarm



Joined: 07 Feb 2005
Posts: 146
Location: Cheshire
PostPosted: Tue Nov 29, 05 10:33 pm    Post subject: Self Employed Reply with quote
    

How do self-employed people buy a house. There must be someone out there doing it but how does it work? When I have been for mortgages in the past I've had to show payslips, work address etc.
Any comments would be appreciated.
Thanks

Rob R



Joined: 28 Oct 2004
Posts: 31902
Location: York
PostPosted: Tue Nov 29, 05 10:42 pm    Post subject: Reply with quote
    

Prove your income like anyone else, past accounts etc. Not always easy, as most lenders like people who can tick all the boxes Not really a concern for me at the moment though, as I've got nothing to prove

sean
Downsizer Moderator


Joined: 28 Oct 2004
Posts: 42207
Location: North Devon
PostPosted: Tue Nov 29, 05 10:43 pm    Post subject: Reply with quote
    

Either you show about three years' worth of accounts, or you go for a 'self-certified' mortgage. Self-certified will almost certainly be at a higher interest rate, have worse tie-ins etc. but it does let you borrow pretty much whatever you want. Not that that's necessarily a good idea, especially if you think that interest rates might rise.

jema
Downsizer Moderator


Joined: 28 Oct 2004
Posts: 28098
Location: escaped from Swindon
PostPosted: Tue Nov 29, 05 11:02 pm    Post subject: Reply with quote
    

It is a PITA I tried to remortgage a few years ago and couldn't

Penny Outskirts



Joined: 18 Sep 2005
Posts: 23385
Location: Planet, not on the....
PostPosted: Tue Nov 29, 05 11:08 pm    Post subject: Reply with quote
    

Self Certify Mortgages are also sometimes called non-status mortgages and you usually need at least a 10% deposit. If you haven't got accounts, you have to "certify" how much you earn, in other words, just tell them! But you do have to sign, so if you tell too many porkies, and things go wrong they can have you for fraud

Most major lenders will do these - good ones usually are Abbey, Northern Rock and Intelligent Finance.

Penny Outskirts



Joined: 18 Sep 2005
Posts: 23385
Location: Planet, not on the....
PostPosted: Tue Nov 29, 05 11:10 pm    Post subject: Reply with quote
    

jema wrote:
It is a PITA

sean
Downsizer Moderator


Joined: 28 Oct 2004
Posts: 42207
Location: North Devon
PostPosted: Tue Nov 29, 05 11:11 pm    Post subject: Reply with quote
    

First word: Pain

Penny Outskirts



Joined: 18 Sep 2005
Posts: 23385
Location: Planet, not on the....
PostPosted: Tue Nov 29, 05 11:13 pm    Post subject: Reply with quote
    

sean wrote:
First word: Pain


Ah ha - got there now!!! Fank u

treefarm



Joined: 07 Feb 2005
Posts: 146
Location: Cheshire
PostPosted: Tue Nov 29, 05 11:58 pm    Post subject: Reply with quote
    

Thanks people!
That doesn't sound as difficult as I thought (but I haven't tried it yet!)
Will keep you informed...

Treacodactyl
Downsizer Moderator


Joined: 28 Oct 2004
Posts: 25795
Location: Jumping on the bandwagon of opportunism
PostPosted: Wed Nov 30, 05 7:09 am    Post subject: Reply with quote
    

What type of job do you do and are there any organisations out there that help you? Some of those may have arrange a mortgage for their members and done some of the explaining for you.

Leonie



Joined: 13 Sep 2005
Posts: 731
Location: West Sussex
PostPosted: Wed Nov 30, 05 9:59 am    Post subject: Reply with quote
    

We're self employed with a 7 year old mortgage which was taken whilst we were still employed, we recently wanted to borrow more on the mortgage to build an extension, the bank refused us because we only had just under 2 years accounts to show. The stupid thing is that a few years previously when we were employed but on dismal wages the bank happily lent us more on the mortgage, now we're earning a lot more they got all funny simply because we're self employed, and our house is worth about 3 times the current mortgage so it's not like there's no security there for the bank to get their money back if things go wrong. In the new year we'll apply again, this time with a few years worth of audited accounts, what's the bet they move the goal posts....if they do we'll be changing mortgages and looking at the self certified route.

Penny Outskirts



Joined: 18 Sep 2005
Posts: 23385
Location: Planet, not on the....
PostPosted: Wed Nov 30, 05 10:06 am    Post subject: Reply with quote
    

GardenerJ wrote:
We're self employed with a 7 year old mortgage which was taken whilst we were still employed, we recently wanted to borrow more on the mortgage to build an extension, the bank refused us because we only had just under 2 years accounts to show.


Almost certainly a case of "Computer Says NO" Not all companies are the same, but most don't seem to be able to cope with changes in circumstances, and it has nothing to do with how long you've been with them, or whether you can actually pay the damn mortgage - if you don't fit their system criteria, that's it... Used to drive me nuts when I worked for Abbey, you see a customer in front of you, who you know is fine, but the system won't let you help them.

tawny owl



Joined: 29 Apr 2005
Posts: 563
Location: Hampshire
PostPosted: Thu Dec 01, 05 9:46 am    Post subject: Reply with quote
    

GardenerJ wrote:
We're self employed with a 7 year old mortgage which was taken whilst we were still employed, we recently wanted to borrow more on the mortgage to build an extension, the bank refused us because we only had just under 2 years accounts to show.


That does make a difference. You'd be well advised to get your accounts in asap, so that you do have 2 years to show. Most banks/BSs will be happy with 2 years, although some need 3, and it does work out cheaper than a self-cert. In addition, you've got 7 years' mortgage payments to show, which hopefully show you've been good and paid up regularly on time, which goes a long way with banks too (they'll want to see the end-of-year statements from your present lender). Look on the Moneyfacts website for lists of lenders with different sorts of mortgages: https://www.moneyfacts.co.uk/

As you're both SE, and therefore presumably have tax money held back for a year or so, you should seriously consider a current account mortgage. Just getting your pay put into that, leaving it there as long as possible each month before DDs go out, and keeping your tax money in there could cut down quite substantially on your mortgage term (and consequently the total amount paid back). The interest rates are generally a bit higher, and most mortgage brokers won't recommend them (because they don't get a cut), but they can be very useful for SE people who get a reasonable amount of money paid in that they can leave for a while - the shortening of the mortgage term more than compensates for the slightly higher interest rate. There are only three real CA mortgages available at the moment - Clydesdale Bank, NatWest, and the One account. Any others that claim to be CA mortgages are actually offset, where savings (either in the same account or in a separate one) are offset against the mortgage, but you can't have DDs or standing orders set up from the mortgage account, so you need to move money from one of the accounts into a current account, which can be a pain and risks you incurring interest if the dates don't work out quite right.

The Clydesdale is the cheapest at the moment, and they definitely will consider people with 2 years' accounts. So will the One account - not sure about NatWest. All of them have interest rates at about 5.6%, depending on the amount of the mortgage relative to the value of the property. Would be worth getting a few estate agents round to estimate the current value for you before you contact them.

HTH

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