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First time buyer advice (partner is self employed)

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Hi everyone, looking for a little advice, it's probably more likely signposting. Me and my partner are looking to buy a flat in Glasgow come spring. By then we will have roughly £10,000 saved. We'r… Read More
Nobull Avatar
5m, 2w agoPosted 5 months, 2 weeks ago
Hi everyone, looking for a little advice, it's probably more likely signposting.

Me and my partner are looking to buy a flat in Glasgow come spring. By then we will have roughly £10,000 saved. We're looking at 2/3 Bed Tenement Flats in a price range of £70,000-110,000. There seems to be a decent amount of choice in this price range. We're literally right at the start of the process, I have never done anything like this before. I have a decent(ish) credit score, I haven't been able to check her's yet.

As of April (next financial year) I will be earning £20,500. Hardly a lot, I know. It is a full time job, regular employment.

My partner recently went self employed. Before that she was earning £25,000 a year. She has only been self-employed since September but her monthly income is already just shy of £2000. This is from two contracts, both of which run until at least June, with the option to extend. I know it is harder to get a mortgage if you are self employed, and by April she will only have had half a year's tax return and I'm fairly sure they ask for at least the previous two. I'm not sure whether her P60 from her last job might help things as it proves what she was earning and it matches quite well with what she is currently earning self-employed.

My main questions are can anyone recommend a good mortgage adviser and/or do I need one? How much should I budget for the entire process of buying a house (solicitors fees etc.)? And, am I currently better off applying on my own for now, given my partner has been self-employed for such a short amount of time? Having done some of the 'how much can I borrow' calculators, applying with just my salary might mean we'd be somewhere in the middle of the current budget range.

Many thanks in advance HUKD property gurus.
Nobull Avatar
5m, 2w agoPosted 5 months, 2 weeks ago
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Best Answer
Nobull
andynicol

My first point of call would be your bank, arrange an appointment with the mortgage advisor, which is free, and only take an hour or so, BUT you may need to wait a week or two for an appointment.
Explain exactly what you've described here, they will do a soft search which won't affect your credit rating and tell you your best options (that they can offer of course), they will offer life insurance etc which you are under no obligation to take.
After the soft search they know if they can offer you a mortgage, and for how much, if they can they will give you plenty options, which will vary depending on, mortgage length, fixed term/variable, deposit, LTV etc, they will give you written quotes which you take away and mull them over, this will include the exact amount you are expected to pay each month.
Above process was what I followed through with RBS.
Once you've done the above, you can visit a mortgage broker and see if theres any other options available to you, the mortgage broker, although usually free, may insist on you take there recomendation of life insurance and/or mortgage cover (there fee is covered by the commission they make on this policy).
Hi Andy...thanks for this. Would you recommend going to the bank where I have my current account (i.e. The Co-operative for me, Lloyds for her) or did you pick a bank who are especially decent on mortgages?


I'd go to both your banks, nothing to lose, see what options they give you, they should but just ensure they do a soft search so it doesn't affect your credit score.

I knew the amount I required, and after searches online I knew what this would cost per month pretty accurately.

I went to RBS and TSB, I/we bank with both, and was more than happy with what was offered from RBS.

It does seem daunting, but the advisor will keep you right, just don't feel intimidated to agree to anything there and then, take the documents away and mull them over, particularly the life/mortgage cover they will offer, you will find cheaper online I'm sure.

All Responses

(26) Jump to unreadPost an answer
Responses/page:
#1
I believe buying a property in Scotland is different than in England.
#2
we put in 20000 for a property for 62000 ...but it was hard to get Mortgage direct so gt it done by a mortgage broker. ..job done....but cos you're both working it should be done cos u getting money coming in and if you're partner has money in her account shouldn't b a problem
#3
rodders443
I believe buying a property in Scotland is different than in England.

The difference is only in the buying/offering process, not the mortgage side.
#4
Nobull

Hi everyone, looking for a little advice, it's probably more likely signposting.
Me and my partner are looking to buy a flat in Glasgow come spring. By then we will have roughly £10,000 saved. We're looking at 2/3 Bed Tenement Flats in a price range of £70,000-110,000. There seems to be a decent amount of choice in this price range. We're literally right at the start of the process, I have never done anything like this before. I have a decent(ish) credit score, I haven't been able to check her's yet.
As of April (next financial year) I will be earning £20,500. Hardly a lot, I know. It is a full time job, regular employment.
My partner recently went self employed. Before that she was earning £25,000 a year. She has only been self-employed since September but her monthly income is already just shy of £2000. This is from two contracts, both of which run until at least June, with the option to extend. I know it is harder to get a mortgage if you are self employed, and by April she will only have had half a year's tax return and I'm fairly sure they ask for at least the previous two. I'm not sure whether her P60 from her last job might help things as it proves what she was earning and it matches quite well with what she is currently earning self-employed.
My main questions are can anyone recommend a good mortgage adviser and/or do I need one? How much should I budget for the entire process of buying a house (solicitors fees etc.)? And, am I currently better off applying on my own for now, given my partner has been self-employed for such a short amount of time? Having done some of the 'how much can I borrow' calculators, applying with just my salary might mean we'd be somewhere in the middle of the current budget range.
Many thanks in advance HUKD property gurus.

My first point of call would be your bank, arrange an appointment with the mortgage advisor, which is free, and only take an hour or so, BUT you may need to wait a week or two for an appointment.

Explain exactly what you've described here, they will do a soft search which won't affect your credit rating and tell you your best options (that they can offer of course), they will offer life insurance etc which you are under no obligation to take.
After the soft search they know if they can offer you a mortgage, and for how much, if they can they will give you plenty options, which will vary depending on, mortgage length, fixed term/variable, deposit, LTV etc, they will give you written quotes which you take away and mull them over, this will include the exact amount you are expected to pay each month.

Above process was what I followed through with RBS.

Once you've done the above, you can visit a mortgage broker and see if theres any other options available to you, the mortgage broker, although usually free, may insist on you take there recomendation of life insurance and/or mortgage cover (there fee is covered by the commission they make on this policy).






Edited By: andynicol on Jan 07, 2017 21:35
#5
I work for a major bank... and I deal with the banking side but can speak with 14-15 year experience. I am studying to be a mortgage adviser. most banks want and will ask for 2-3 year's tax returns for self employed (broker could help here but they charge advise/arrangement fees) and just to mention. a broker will charge for his time if you apply for a mortgage and the purchase falls through they will charge this banks only get paid on the completion of the mortgage, there maybe mortgage product fees these are charged for the type of mortgage like for a lower rate from like 2, 3,5,10 etc fixed rates, or tracker, variable etc.

It all depends on what your circumstances are as well on what you can borrow (your ages, deposit amount, and the term and type of mortgage you are going to choose).

I could give you some pointers on what to say and see if they match your circumstances.

If you are younger then the bank I work for will allow you to take a mortgage up to a maximum term of 40 years or state retirement age currently age 67 in UK (unless Scotland is different).

(example) Say your 18 years of age, you are after a property value for 100k, you you need a mortgage of 90k with most banks, so would need 10k deposit.

Help to buy mortgage scheme has finished in England and Wales, I don't know if Scotland has any first time buyer schemes, but I know my bank I work for has just launched a new mortgage product for 95% LTV (loan to value) this would require you to only have a5% deposit 5k. plus they have £500 cash back offer as well that is given on any successful mortgage application during the promo period.

THIS IS WHAT YOU DONT SAY.

1). I HAVE A BUDGET OF ONLY £500 (THEY WILL ONLY ALLOW YOU TAKE A MORTGAGE THAT MATCHES THAT PAYMENT... (result could be 32k max mortgage they may give you)

2). I ONLY WANT A MORTGAGE OVER 20 YEARS... (result could be same as above again)

THIS IS THE BEST EXAMPLE TO GET A MORTGAGE.... I'm very flexible on the term, budget etc if I have to take mortgage up to retirement age then so be it the longer the mortgage term, the more you will be able to borrow, if you take a mortgage over 40 years, you will be able to repay down at some point, this can be done when your deal ends, you may remortgage to get a better deal...

hope this helps.....

PS: ON YOUR INFO ABOVE ON YOUR OWN INCOME I DONT THINK TOU WILL HAVE GETTING THE MORTGAGE AMOUNT IF YOU GO FOR A LONGER TERM.
#6
andynicol

My first point of call would be your bank, arrange an appointment with the mortgage advisor, which is free, and only take an hour or so, BUT you may need to wait a week or two for an appointment.
Explain exactly what you've described here, they will do a soft search which won't affect your credit rating and tell you your best options (that they can offer of course), they will offer life insurance etc which you are under no obligation to take.
After the soft search they know if they can offer you a mortgage, and for how much, if they can they will give you plenty options, which will vary depending on, mortgage length, fixed term/variable, deposit, LTV etc, they will give you written quotes which you take away and mull them over, this will include the exact amount you are expected to pay each month.
Above process was what I followed through with RBS.
Once you've done the above, you can visit a mortgage broker and see if theres any other options available to you, the mortgage broker, although usually free, may insist on you take there recomendation of life insurance and/or mortgage cover (there fee is covered by the commission they make on this policy).
Hi Andy...thanks for this. Would you recommend going to the bank where I have my current account (i.e. The Co-operative for me, Lloyds for her) or did you pick a bank who are especially decent on mortgages?
#7
rodders443
I believe buying a property in Scotland is different than in England.
There are some differences, though I believe there are some advantages in Scotland such as the seller has to get a Home Report done before putting it on the market (potentially saves you getting a survey done). I think the situation with flats is also much better in Scotland as they don't have leasehold there, meaning (I think) you don't pay ground rent.
#8
Generally for self-employed applicants you would need at least 1 years finalised accounts & a projection for the current year, some lenders will want 2 years accounts plus bank statements. If you can borrow what you need on your income alone I would go down that route. I also would not go via an adviser but go direct to a bank/building society. I was a mortgage adviser in Scotland.
#9
I DO FEEL TOU WILL BE GET A MORTGAGE OD THAT AMOUNT ON YOUR OWN INCOME.
#10
maverickyork
I work for a major bank... and I deal with the banking side but can speak with 14-15 year experience. I am studying to be a mortgage adviser. most banks want and will ask for 2-3 year's tax returns for self employed (broker could help here but they charge advise/arrangement fees) and just to mention. a broker will charge for his time if you apply for a mortgage and the purchase falls through they will charge this banks only get paid on the completion of the mortgage, there maybe mortgage product fees these are charged for the type of mortgage like for a lower rate from like 2, 3,5,10 etc fixed rates, or tracker, variable etc.

It all depends on what your circumstances are as well on what you can borrow (your ages, deposit amount, and the term and type of mortgage you are going to choose).

I could give you some pointers on what to say and see if they match your circumstances.

If you are younger then the bank I work for will allow you to take a mortgage up to a maximum term of 40 years or state retirement age currently age 67 in UK (unless Scotland is different).

(example) Say your 18 years of age, you are after a property value for 100k, you you need a mortgage of 90k with most banks, so would need 10k deposit.

Help to buy mortgage scheme has finished in England and Wales, I don't know if Scotland has any first time buyer schemes, but I know my bank I work for has just launched a new mortgage product for 95% LTV (loan to value) this would require you to only have a5% deposit 5k. plus they have £500 cash back offer as well that is given on any successful mortgage application during the promo period.

THIS IS WHAT YOU DONT SAY.

1). I HAVE A BUDGET OF ONLY £500 (THEY WILL ONLY ALLOW YOU TAKE A MORTGAGE THAT MATCHES THAT PAYMENT... (result could be 32k max mortgage they may give you)

2). I ONLY WANT A MORTGAGE OVER 20 YEARS... (result could be same as above again)

THIS IS THE BEST EXAMPLE TO GET A MORTGAGE.... I'm very flexible on the term, budget etc if I have to take mortgage up to retirement age then so be it the longer the mortgage term, the more you will be able to borrow, if you take a mortgage over 40 years, you will be able to repay down at some point, this can be done when your deal ends, you may remortgage to get a better deal...

hope this helps.....

PS: ON YOUR INFO ABOVE ON YOUR OWN INCOME I DONT THINK TOU WILL HAVE GETTING THE MORTGAGE AMOUNT IF YOU GO FOR A LONGER TERM.
Thanks for this. Well we are 28 and 27 respectively, so relatively young. Happy to be flexible on everything from term to upfront costs really, we are likely to just remortgage again after a few years...that's usually the best thing to do to keep getting a good rate, or so I've heard.

If I go through a broker will that somehow mitigate my partner being self-employed?
#11
honestly you may not have to.... The sting in the tale with mortgages was 2-3 years ago the MMR (mortgage market review) rules came in that the now defunct regulator FSA brought these rules in. the regulators are now FCA (financial conduct authority) and PRA (prudential regulation authority). You'll get allot of this info over your mortgage journey. Overnight made mortgage harder to get, and the amount you can borrow was affected.

Makesure you look into HELP TO BUY ISAS (IF APPLICABLE IN SCOTLAND).

Also look out for the new life time ISAS coming out in the new tax year as the ISA limit increased to 20k from April 6th 2017, I don't know yet if you can save more into the Pty purchase side but you have to be under 40 years of age, also both of you can have one of you have never owned. property
#12
just check looks like you can have an help to buy ISA in Scotland.....


BOS - HTBISA link

https://www.bankofscotland.co.uk/isas/cash-isas/help-to-buy-isa/
#13
Brokers could help, but they have to follow the same rules as banks.

Mortage they follow are laid out by the regulators, and the mortgage providers themselves through there credit and fraud checking & underwriting rules as well.
#14
if you have opened or funded an ISA in the from 06/04/16 to now or upto 05/03/17 then get a HTBISA open for you and your partner. they allow you to open with 1000 then upto max 200 a month. so if you save the minimum over next 3 months of 1600 then your balance is worth 2000 (you get 25%, so every 200 saved government gives you an extra 50 making total 250 so on and so on upto a maximum balance of 3000 bonus)
#15
if you have opened or funded and ext ISA then speak to bank and they will advise if you can have one. they are a great way to make your deposit go further, or help towards over mortgage or purchasing cost, cost of moving, product fees or legal fees etc.
#16
hope all this help and you get the property you want.

all the best
#17
maverickyork
if you have opened or funded an ISA in the from 06/04/16 to now or upto 05/03/17 then get a HTBISA open for you and your partner. they allow you to open with 1000 then upto max 200 a month. so if you save the minimum over next 3 months of 1600 then your balance is worth 2000 (you get 25%, so every 200 saved government gives you an extra 50 making total 250 so on and so on upto a maximum balance of 3000 bonus)
Where should I go to open an HTB ISA?
#18
Nobull
andynicol

My first point of call would be your bank, arrange an appointment with the mortgage advisor, which is free, and only take an hour or so, BUT you may need to wait a week or two for an appointment.
Explain exactly what you've described here, they will do a soft search which won't affect your credit rating and tell you your best options (that they can offer of course), they will offer life insurance etc which you are under no obligation to take.
After the soft search they know if they can offer you a mortgage, and for how much, if they can they will give you plenty options, which will vary depending on, mortgage length, fixed term/variable, deposit, LTV etc, they will give you written quotes which you take away and mull them over, this will include the exact amount you are expected to pay each month.
Above process was what I followed through with RBS.
Once you've done the above, you can visit a mortgage broker and see if theres any other options available to you, the mortgage broker, although usually free, may insist on you take there recomendation of life insurance and/or mortgage cover (there fee is covered by the commission they make on this policy).
Hi Andy...thanks for this. Would you recommend going to the bank where I have my current account (i.e. The Co-operative for me, Lloyds for her) or did you pick a bank who are especially decent on mortgages?


I'd go to both your banks, nothing to lose, see what options they give you, they should but just ensure they do a soft search so it doesn't affect your credit score.

I knew the amount I required, and after searches online I knew what this would cost per month pretty accurately.

I went to RBS and TSB, I/we bank with both, and was more than happy with what was offered from RBS.

It does seem daunting, but the advisor will keep you right, just don't feel intimidated to agree to anything there and then, take the documents away and mull them over, particularly the life/mortgage cover they will offer, you will find cheaper online I'm sure.
#19
maverickyork
I work for a major bank... and I deal with the banking side but can speak with 14-15 year experience. I am studying to be a mortgage adviser. most banks want and will ask for 2-3 year's tax returns for self employed (broker could help here but they charge advise/arrangement fees) and just to mention. a broker will charge for his time if you apply for a mortgage and the purchase falls through they will charge this banks only get paid on the completion of the mortgage, there maybe mortgage product fees these are charged for the type of mortgage like for a lower rate from like 2, 3,5,10 etc fixed rates, or tracker, variable etc.
It all depends on what your circumstances are as well on what you can borrow (your ages, deposit amount, and the term and type of mortgage you are going to choose).
I could give you some pointers on what to say and see if they match your circumstances.
If you are younger then the bank I work for will allow you to take a mortgage up to a maximum term of 40 years or state retirement age currently age 67 in UK (unless Scotland is different).
(example) Say your 18 years of age, you are after a property value for 100k, you you need a mortgage of 90k with most banks, so would need 10k deposit.
Help to buy mortgage scheme has finished in England and Wales, I don't know if Scotland has any first time buyer schemes, but I know my bank I work for has just launched a new mortgage product for 95% LTV (loan to value) this would require you to only have a5% deposit 5k. plus they have £500 cash back offer as well that is given on any successful mortgage application during the promo period.
THIS IS WHAT YOU DONT SAY.
1). I HAVE A BUDGET OF ONLY £500 (THEY WILL ONLY ALLOW YOU TAKE A MORTGAGE THAT MATCHES THAT PAYMENT... (result could be 32k max mortgage they may give you)
2). I ONLY WANT A MORTGAGE OVER 20 YEARS... (result could be same as above again)
THIS IS THE BEST EXAMPLE TO GET A MORTGAGE.... I'm very flexible on the term, budget etc if I have to take mortgage up to retirement age then so be it the longer the mortgage term, the more you will be able to borrow, if you take a mortgage over 40 years, you will be able to repay down at some point, this can be done when your deal ends, you may remortgage to get a better deal...
hope this helps.....
PS: ON YOUR INFO ABOVE ON YOUR OWN INCOME I DONT THINK TOU WILL HAVE GETTING THE MORTGAGE AMOUNT IF YOU GO FOR A LONGER TERM.

I'll bet that when/if your a mortgage advisor thats the last information you would give a customer.

If every mortgage application said that, the appointment would last for hours and your commission would diminish due to lower number of appointments.

Once the mortgage advisor goes through the financials, they know what surplus funds are available, theres no need to say 'I'm flexible' or 'dont have a budget', the advisor already knows what is feasibly affordable and acceptable mortgage application-wise to the applicant.

To tell someone to contemplate accepting a mortgage up to retirement age without knowing the first thing about there financial background is ludicrous IMO.
#20
I did not say any of that.... I work in a bank and deal with applications for credit every day, and the 1st thing we do is always ask what there budget is max and minimum they could afford.

all credit application follow similar affordability models.

when I mean be flexible it means that don't give them any reason to say that you can afford a mortgage or it's not within your budget....

as an application is allows goes from a persons income, credit history, the sustainability of the borrowing amount and term.

when it comes to commission my friend I can. conform that myself or my colleagues recieve No commission, incentives for any mortgage applications or sales related products provided to customers.

When I mean we get paid I mean the bank only makes any money for work carried out, until the mortgage transaction has completed.

HTBISA have different rates bus the 25% boys is paid by all the banks and providers.
#21
maverickyork
I did not say any of that...

maverickyork

THIS IS THE BEST EXAMPLE TO GET A MORTGAGE.... I'm very flexible on the term, budget etc if I have to take mortgage up to retirement age then so be it the longer the mortgage term, the more you will be able to borrow, if you take a mortgage over 40 years, you will be able to repay down at some point, this can be done when your deal ends, you may remortgage to get a better deal...

oO

Edited By: andynicol on Jan 07, 2017 23:29
#22
Did I say to accept a mortgage up to retirement age NO, I gave examples of secenarios that could happen if you go on with the wrong approach on what you want.

the mortgage application process with get a person a mortgage through asking load of question about a persons financial hiatory, but if you go in saying I only want a mortgage over 20 years because I don't want to take the term over this then the mortgage adviser will have to work with that term only, but if amount of borrowing could have been achieved within say 22 years and this is the term that would get the the amount you want then technically the mortgage adviser would have to say it's not affordable or within your future plans. they are like to say keep on saving for a higher deposit.

I am not making this up I see this scenario on the face a person goes into a mortgage appointment with an idea of there budget, and term and my colleagues will always work with customer to always look after them. ALL MORTGAGE AND BANKING RELATED ADVISERS ARE NOW HEAVILY REGULATED. WE ARE SCARED TO MAKE MISTAKE AND GIVE WRONG ADVISERS.
#23
I can say that mortage applications can be 2-4 hours, they take you through everything.

you can get a mortgage promise or a mortgage in principle online it only takes 15 mins, most banks offer this services, this will give you an idea of what you can borrow on your income. then if you want to progress the application at that stage either speak to an mortgage adviser over the telephone or within a bank branch or broker.
#24
maverickyork
Did I say to accept a mortgage up to retirement age NO

What you said ;

'THIS IS THE BEST EXAMPLE TO GET A MORTGAGE.... I'm very flexible on the term, budget etc if I have to take mortgage up to retirement age then so be it '

That is clearly advising someone to state they are wishing to take a mortgage up to retirement age.

oO
#25
if you have to take a mortgage over 40 years and that person fully understands all the implications.... then what is wrong with that, if the mortgage term is 30 years, 20, 10 years so be it.... asking as they fully understand the all the implications.... I think if you read the full post of what I have said... MY wrong choice of words.... then I apologise but you have copied just a small snap shot of what I said..... there more than just the term and amount borrowed to a mortgage application.

Wrong choice of words WAS SAYING BEST WAY TO GET A MORTGAGE.

WHAT I SHOULD HAVE SAID WAS GO IN OPEN MINDED ON THE TERM, MAKESURE YOU ASK LOADA OF QUESTIONS, ANY MORTGAGE YOU CONSIDER IS WITHIN WHAT YOU CAN AFFORDABLE OR IS SIMILAR TO WHAT YOU PAY NOW ID YOU ARE RENTING.... MAKESURE YOU ALSO CONSIDER OTHER COSTS ASWELL, HOME INSURANCE, LIFE INSURANCE, AND MORTGAGE PROTECTION INSURANCE ETC.


END OF BEEN SMART..... PLEASE.
#26
maverickyork
if you have to take a mortgage over 40 years and that person fully understands all the implications.... then what is wrong with that, if the mortgage term is 30 years, 20, 10 years so be it.... asking as they fully understand the all the implications.... I think if you read the full post of what I have said... MY wrong choice of words.... then I apologise but you have copied just a small snap shot of what I said..... there more than just the term and amount borrowed to a mortgage application.
Wrong choice of words WAS SAYING BEST WAY TO GET A MORTGAGE.
WHAT I SHOULD HAVE SAID WAS GO IN OPEN MINDED ON THE TERM, MAKESURE YOU ASK LOADA OF QUESTIONS, ANY MORTGAGE YOU CONSIDER IS WITHIN WHAT YOU CAN AFFORDABLE OR IS SIMILAR TO WHAT YOU PAY NOW ID YOU ARE RENTING.... MAKESURE YOU ALSO CONSIDER OTHER COSTS ASWELL, HOME INSURANCE, LIFE INSURANCE, AND MORTGAGE PROTECTION INSURANCE ETC.
END OF BEEN SMART..... PLEASE.

The best advice in this set of circumstances would be to use a broker yes there may be a cost but as one of the couple is recently self-employed she needs specific help to obtain a mortage. To say they should take it out for 40 yeas to help is nonsense. Although you work in "credit" for a bank you are not qualified to give advice and they should recieve proper advice not from someone on a deals site.

Edited By: adamsxi on Jan 08, 2017 09:38: spelling

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