Self Employed Mortgages in Nottingham

What if I am a company director?

If you are a director of a company this is normally your salary and dividends, although some lenders will work on salary and net profit which could work out better in some situations. In addition there could be some deductions which have been taken off income which might be able to be added back in. All of the above means that the amounts each lender will consider lending to self employed and directors will vary dramatically.

How much will you be able to borrow?

The final variable is what the lender will do with the income figures from above. Most lenders will work on an average of the last two years income, or the latest if it is reducing income, but there are others that will base the lending on just the latest years accounts.

Most lenders will offer a mortgage based on 4x-4.75x the above figure. With regards to a deposit, a 5% deposit could get you a mortgage, however we would recommend a 10% or above to increase the number of available deals.

What documentation will I need?

In addition to the lenders using different income amounts, they also require different documentation to prove that income. Whilst some need your finalised accounts, others will send a questionnaire to your accountant to confirm the figures

Others will need Tax Year Overviews and Tax Year Calculations, which can be obtained by either your accountant or directly from HMRC.

An example of documents we usually need for self employed mortgages include:

• Photo ID – You'll need to prove you are to any lender
• Proof of Address – To prove where you currently live. Usually a utility bill or bank statement with your current address.
• Proof of Deposit – Not needed immediately but is likely to be required when the application to the mortgage lender is made
• SA302 Documents – Usually from at least the last two years although some lenders will accept just one year

Ready to get self employed mortgage advice?

Overall whilst getting a mortgage when self employed can seem like an arduous task, however there are lenders that will cater for various different scenarios.

If you are self employed or own a business and are wanting a mortgage then contact us. One of our qualified mortgage brokers will be happy to help.

We can identify the right lender for your situation and help you obtain the necessary documents for your application to be processed and offered. Please contact us here or call us on 0115 9499988.

What fees are associated with buying a property?

Valuation fee

When buying a property you want to know that the property is worth what you are paying for it, and if any repairs are needed, you can then make a decision on whether you want to proceed with the purchase and whether you want to reassess your offer to take into account any repairs needed.

Traditionally, lenders have instructed a surveyor to undertake a basic valuation, but this is now often replaced by a desktop valuation where information is gathered online on the likely value of the property. Whilst this may be acceptable to the lender, it does mean that nobody has been into the property to see and assess any particular issues. Both of these scenarios could leave you owning a property, which you may wish you had never bought, for example, structural issues or damp problems would not have been brought to your attention and you will have little chance of recovering any costs from anyone.

With some mortgages this valuation may cost you £200-£300, however in some instances it is provided free of charge. A more in depth survey is a Homebuyer or Level 2 Survey, this will cost from around £450 and will go into far more detail. This type of survey is suitable for most conventional or standard properties. For larger, more unusual properties or those in a state of disrepair there is a Full Structural or Level 3 Survey.

We would always recommend that first time buyers go for more than the basic valuation, it will help identify problems and can aid you in negotiating a lower price for the property.

Lender Arrangement fee

Some mortgages have arrangement fees and others don't. In many instances, these fees can be added to the advance, but it will mean that you are paying interest on a larger debt.

Whether it is worth paying a fee for a mortgage depends on the interest rates, the size of the mortgage and the size of the fee. Your mortgage advisor will be able to compare the deals and calculate which is the most economic route for you.

Broker fee

Your mortgage advisor may charge you a fee to undertake the research, make a recommendation and submit an application. Make sure you know what this figure is before committing to proceed.

Legal fees

You will need a solicitor or conveyancer to deal with the legal work involved in your purchase. If you would like a quote for this then please ask, as we have arrangements with a number of solicitors.

Stamp Duty

This is a tax paid when you purchase a property. Eligible first time buyers won't pay Stamp Duty on residential property purchases up to the value of £425,000. On purchases over this and up to £625,000 the tax is 5% of the amount over£425,000. Over £625,000 then normal Stamp Duty rates apply.