Mortgages

[Chubster]

Right help me out here people.....Mortgages. How does this work now we are both self employed.

What to we put down as earnings, is this the turnover of the shop, very nice thankyou, or profit, small cupboard in the Outer Hebrides.

What do they use to calculate lending potential and are there any other "tricks" we can use

Cheers

Chub

[Peter W]

Your earnings will be the profits of the shop, rather than the turnover.

Mainstream lenders are always more nervous about lending to the newly self-employed, especially during these difficult times. After 3 years there is little difference, as long as your profits are good and stable.

You will need a big deposit to put down.

Your best bet is to speak to an independent mortgage broker. Even if you don't use them, they will give you a good idea about what you can borrow over the phone.

[Chubster]

And how about self cert mortgages?

[Peter W]

These can be useful in allowing you to borrow more, but they are more expensive.

Again, you would probably need to speak to independent mortgage broker.

Speaking to some brokers that I know, my understanding is that the majority of lenders are just not interested in sub-prime cases at the moment.

You will be in a much better position in a couple of years, when the market has improved and you have more of a trading history.

[Chubster]

You will be in a much better position in a couple of years, when the market has improved and you have more of a trading history.

Cheers Peter, much appreciated....sods law though isnt it....we want to move now when the house prices are lower

[Jeewhizz]

I know a good mortgage broker If you want the details, send me a PM

[Fuzzy]

I used self cert mortgage years ago when I first started trading, nowadays, most lenders won't touch you due the recent state of the market/economy. I did have to put down a 30 % deposit aswell:sad1:

I know of a good mortgage broker too, independent and she is a star! Let me know if you would like her details

[boxby]

The Scottish Building Society is a bit better than most, they tend to deal a lot with Brokers, they're one of the last of the independent building societies where decisions are made by people rather than a computer. However, if you petrol pumps on your property, consider yourself stuffed!!

[giftwrap]

Hi, hope you are sorted now but if not happy to help.

As an ex mortgage Underwriter I can tell you for the s/emp lenders will want to see your net profit before tax, if its a ltd co then- your salary and dividends can be included to. However I guess the business is not at that stage as yet.

Lenders prefer to see at least 2 years accounts and take an average of net profit or latest if increasing. Reducing net profits are frowned upon and a good explanation would be needed at least. However it's all about the risk to the lender and the case made for positive decisions to lenders who still use "real" underwriters.

The lower the loan to value you need or healthy the accounts look (ie if you have a large deposit) the more positively the lenders look at you.

Self Cert is still out there but not at really high LTV's.

[Claire Imogene]

The biggest impact on our market is the following:

1. - There is no longer any subprime lending
2. - Jumbo loan rates have been rising disproportionate to the rest of the market
3. - The ALT-A market has all but vanished
4. - FHA Loans have become increasingly attractive.
5. - Fannie Mae loans have for the most part remained unaffected.

While I certainly cannot predict what the market will be like a year from now (if I could I wouldn't be writing loans and training loan officers for a living) I don't see subprime on the radar for quite some time. Everything else will come around and normalize.

Here's a point that everyone seems to be missing. For the most part this is a market problem - Given time the market will correct the problem. Not the Senate.