Posted on 1 July 2016
"My partner and I are looking for a mortgage, but my partner became self employed with the company he was employed by. He gets paid the same amount of wage each month but only started this job in November 2015. I am working within the council and have been for 5 years, are you able to provide us with a mortgage or not?"
My initial thoughts are that we'd probably have to look at a lender who manually underwrites. Lenders who manually underwrite can make a decision based on the individual merits of the case, rather than those lenders who feed everything into the computer for a decision
I'd need quite a bit more information before I can say whether we could get you the mortgage you are looking for. The area's that will influence a lender that manually underwrites are; loan to value (the lower the better), your previous employment experience (are you still in the same sector?), where you are getting your business from?, whether you have any contracts for work with specific companies, the level of income generated from your first year, as well as your overall credit history and current liabilities.
The amount you are able to borrow will depend on your earned income and monthly outgoings. Lenders do have restrictions on the length of time you have been self employed and usually want to see at least a 2 year track record, with some insisting on 3 years. However, depending on your partner’s previous employment and the type of contract he has, it may be possible to treat him as employed in which case the restrictions will not apply.
Lenders will want to see 6 months business and personal bank statements to build up a picture of your income and expenditure. This is particularly important because they are looking for you to prove your ability and willingness to pay the monthly mortgage payment. If you can demonstrate a history of regular monthly savings and/or a monthly rental history at a similar level to the future mortgage payments this can give the underwriters the flexibility needed to agree a mortgage for you.
If you want to discuss your options in more detail, then you can contact one of our consultants on 0344 346 3672 and they'll be able to sort out a convenient time to speak and give you a more exact idea of how we can help you.
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Answers provided in response to Ask the experts are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not necessarily represent the views, positions, strategies or opinions of John Charcol. All comments are made in good faith, and John Charcol will not accept liability for them.
We recommend you seek professional advice with regard to any of these topics where appropriate.