Do have any chance of a mortgage?

Do have any chance of a mortgage?

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R1 Indy

Original Poster:

4,381 posts

182 months

Sunday 15th November 2015
quotequote all
Am looking to take the plunge and move out of from my parents and get a property/flat in Bristol.

Now i would much prefer to get a mortgage and purchase rather than rent, as renting is just pissing money into the wind frown

My problem is I'm self employed under a Ltd company.

For most of last year i didn't draw a salary. But drew out a lump sum at the end of the year from a directors loan i put in.

This year I've been paying myself £1K/Month. However i could easily increase this to around £1.5K/month easy enough, but would pay more tax!

There is not masses of profit in the company at the moment, will likely be less than 10K profit this year. However moving to bristol will boost this significantly as my overheads/traveling costs will go down, and amount of work taken on will go up.

I have around £6K on 0% credit cards, could pay this off but reduces my capital.

Im Single, no kids etc.

Have around £20K cash in the bank, so can make a decent deposit.

Property value will be looking at £100K-£120K.

I feel i could easily afford the payments as i don't smoke, rarely go out, my biggest expenditure tends to be my cash hungry S2000!


Would i be right in thinking i have no chance of a mortgage at this present time?

Cheers

Condi

17,088 posts

170 months

Sunday 15th November 2015
quotequote all
A decent mortgage advisor would be a better bet, but I doubt you could at the moment.

You have 6 months income on credit cards, and admit that the business couldnt afford to pay you the 1.5k a month you think you could draw.

Maybe pay back the credit card from savings, sell the S2000 and get something cheaper, and then build up 6 months of accounts with a good personal income.

Sarnie

8,025 posts

208 months

Sunday 15th November 2015
quotequote all
R1 Indy said:
Am looking to take the plunge and move out of from my parents and get a property/flat in Bristol.

Now i would much prefer to get a mortgage and purchase rather than rent, as renting is just pissing money into the wind frown

My problem is I'm self employed under a Ltd company.

For most of last year i didn't draw a salary. But drew out a lump sum at the end of the year from a directors loan i put in.

This year I've been paying myself £1K/Month. However i could easily increase this to around £1.5K/month easy enough, but would pay more tax!

There is not masses of profit in the company at the moment, will likely be less than 10K profit this year. However moving to bristol will boost this significantly as my overheads/traveling costs will go down, and amount of work taken on will go up.

I have around £6K on 0% credit cards, could pay this off but reduces my capital.

Im Single, no kids etc.

Have around £20K cash in the bank, so can make a decent deposit.

Property value will be looking at £100K-£120K.

I feel i could easily afford the payments as i don't smoke, rarely go out, my biggest expenditure tends to be my cash hungry S2000!


Would i be right in thinking i have no chance of a mortgage at this present time?

Cheers
You will not be able to use last years figures, if the money drawn out is just the money you put in initially.

This years figures can't be used until the end of the financial year next April.

You are going to need to up your drawings to the £20k-£25k mark to borrow the sort of money you require.........

Simpo Two

85,148 posts

264 months

Sunday 15th November 2015
quotequote all
R1 Indy said:
My problem is I'm self employed under a Ltd company.
Minor detail but - you're not self-employed, you're an employee (of your Company).

Hackney

6,811 posts

207 months

Sunday 15th November 2015
quotequote all
R1 Indy said:
renting is just pissing money into the wind frown
No it's not.

eldar

21,614 posts

195 months

Sunday 15th November 2015
quotequote all
Hackney said:
No it's not.
Dependssmile

Ozzie Osmond

21,189 posts

245 months

Sunday 15th November 2015
quotequote all
R1 Indy said:
This year I've been paying myself £1K/Month. However i could easily increase this to around £1.5K/month easy enough, but would pay more tax!
Don't understand.

If your company is making money you can pay out cash to yourself either as salary or dividend. In many cases people pay themselves a salary just below the National Insurance threshold and then do all the rest as dividend. This minimises deductions, although the dividend advantage will be reduced from April 2016.

Anyway, if the company is making money you're either reinvesting in the business or paying out to staff/shareholders. If the company is building up value you may be thinking of one day "selling up" and pocketing the lot with only 10% entrepreneur's rate Capital Gains Tax, which is nice. If not, the cash has to be paid out sooner or later so you can't hide from the taxman forever - in other words you might as well take some more out.

Either way, if your company is making good money I would expect a conversation with a mortgage adviser could lead to an arrangement which would get you a mortgage.



Sarnie

8,025 posts

208 months

Sunday 15th November 2015
quotequote all
Simpo Two said:
R1 Indy said:
My problem is I'm self employed under a Ltd company.
Minor detail but - you're not self-employed, you're an employee (of your Company).
He's self-employed for mortgage purposes............

Monty Python

4,812 posts

196 months

Monday 16th November 2015
quotequote all
The government's help-to-buy scheme only requires a 5% deposit.

Sarnie

8,025 posts

208 months

Monday 16th November 2015
quotequote all
Monty Python said:
The government's help-to-buy scheme only requires a 5% deposit.
Doesn't really help him currently though............

oldaudi

1,306 posts

157 months

Monday 16th November 2015
quotequote all
The other issue here is "Bristol" and "£100K to £120K"

Have you seen what and where this buys you in Bristol?

CalNaughtonJnr

477 posts

160 months

Tuesday 17th November 2015
quotequote all
oldaudi said:
The other issue here is "Bristol" and "£100K to £120K"

Have you seen what and where this buys you in Bristol?
This. Even in the surrounding areas you will struggle to get much with that budget - my G/Fs 1 bed flat in Portishead was recently valued at 220k

PostHeads123

1,042 posts

134 months

Tuesday 17th November 2015
quotequote all
Try a contractor mortgage broker, if you don't have 2 years of accounts it probably your only option, they want to see evidence of daily rate, previous contracts etc.

Sarnie

8,025 posts

208 months

Tuesday 17th November 2015
quotequote all
PostHeads123 said:
Try a contractor mortgage broker, if you don't have 2 years of accounts it probably your only option, they want to see evidence of daily rate, previous contracts etc.
I don't think he's said he's a Contractor?

docter fox

593 posts

234 months

Tuesday 17th November 2015
quotequote all
Most lenders will only give you around 4 times your annual income, credit card debt will take that amount down further so unfortunately I think it'd be a no. I'd suggest talking to a mortgage broker to see what they can do, nobody I spoke to at a bank was very helpful when I was looking for my first mortgage last year.

jacethemutt

75 posts

103 months

Tuesday 17th November 2015
quotequote all
I am 24 and recently got a mortgage, on a salary of £24k plus 4K car allowance and with the only debt of £300/month car on PCP I think the most amount of mortgage I could get solo was around £105k.

To be honest I think HSBC offer the highest at 4.75x salary but don't do help to buy mortgages so 10% minimum deposit. Even at that assuming no debts on cards or anything on finance (cars, furniture etc) you would only be looking at £50k ish mortgage

Be careful even if you could borrow 100k, on a 25 year repayment mortgage you would be looking at roughly £500 a month on 3% plus council tax £100, home and contents £40, bills (gas,electricity,water) £100, broadband £20, car insurance £40 (assumed you owned one on this website 😀) mobile £20 you can see how you are over £800 a month without food and living life.

I realise of course you may only get an interest only mortgage which would lower it but just be aware how much your outgoings would be as I didn't realise exactly how much my parents provided when I lived at home

jacethemutt

75 posts

103 months

Tuesday 17th November 2015
quotequote all
I am 24 and recently got a mortgage, on a salary of £24k plus 4K car allowance and with the only debt of £300/month car on PCP I think the most amount of mortgage I could get solo was around £105k.

To be honest I think HSBC offer the highest at 4.75x salary but don't do help to buy mortgages so 10% minimum deposit. Even at that assuming no debts on cards or anything on finance (cars, furniture etc) you would only be looking at £50k ish mortgage

Be careful even if you could borrow 100k, on a 25 year repayment mortgage you would be looking at roughly £500 a month on 3% plus council tax £100, home and contents £40, bills (gas,electricity,water) £100, broadband £20, car insurance £40 (assumed you owned one on this website 😀) mobile £20 you can see how you are over £800 a month without food and living life.

I realise of course you may only get an interest only mortgage which would lower it but just be aware how much your outgoings would be as I didn't realise exactly how much my parents provided when I lived at home

R1 Indy

Original Poster:

4,381 posts

182 months

Tuesday 17th November 2015
quotequote all
Thanks Guys, Very Helpful, looks like i will have to rent for a year or two when hopefully my finances will be in a bit more order.

As for Bristol Prices, something like this would do me just fine http://www.rightmove.co.uk/property-for-sale/prope...