When I receive an enquiry from anyone, my opening question is always “How can I help?”
I then explain what started me specifically marketing self-employed mortgages. In July 2015 my wife and I decided to move home as our eldest daughter (4) starts school in September 2016.
My thinking was, property prices meant we made £90,000 in 4 years, so I could double my mortgage, extend my term from 16 years to 35 years, and it would cost us the exact same every month. This would mean we would have the house for the next 15 – 20 years which would see our children through school. And what better investment than property over the long run? – in my opinion.
What most people do, including me and the rest of you fantastic self-employed people, is approach your existing lender. So I went back to Cambridge Building Society, who use salary and dividends from myself and my wife who’s a sole trader.
After having a few seriously angry and frustrating conversation with the employed adviser who didn’t have a clue how being self-employed works, they wouldn’t lend us what we needed to move. I’m very direct with getting what I want, so I really feel sorry for anyone who gets me in that scenario.
I’m bloody good to have in your corner when there’s a problem though lol.
If you’ve already started searching for a mortgage, I’m sure you’ve come across lenders like this. I can tell you now, a lot of your problems with the high-street lenders comes from your income. For me, my accountant had always advised me not to take more than £40-ish thousand out of the business because you pay a higher rate tax.
That was why I struggled so much.
This was massively disappointing for us. In a way, I’m lucky that my wife just lets me crack on: I know that often your wives/partners get as anxious as you do when you hear that “no” from the lender.
Being 4 years into a 5 year fixed rate with Cambridge, it meant moving to a new lender would cost us £10,000 in early repayment penalties!! But we weren’t giving up. You shouldn’t either.
As I’m sure all you business owners out there know, you have to watch the expenses. We never anticipated that our home town Chelmsford would do so well. In the end we decided that in the scheme of things, it’s a small loss for a dream big long term house gain.
I went off (like you will) and spoke to a few other lenders. Most will use salary and dividends, which came out very close to the figure from Cambridge for me. At this point you’re going to feel as frustrated as me: I’m doubling my mortgage, extending the term and the monthly payment will stay the same. I’ve been paying that amount for 4 years, its clearly affordable. Yet the lenders just won’t see it that way.
I had retained profit floating around after Active Broker’s very successful 2014/2015 tax year. Not only did this mean it was a great time financially to move home, but those retained profits became key to getting the amount we needed to borrow.
After some strenuous research, speaking to 99% of UK lenders in 48 hours, I found 5 lenders that would consider the retained profit.
I weighed up the costs, how much we could borrow, the interest rates, I spoke to underwriters and my business development manager to see which lender was going to be the simplest and easiest.
As you will know, when looking at houses particularly when you know it is for the long term, you go right to your budget.
We saw a dream house which was everything we wanted, in the area we wanted, 5 minutes from the school we wanted, everything about it was 10/10. When you find a house like this, it’s worth stretching to the last penny to get exactly what you need – I love a bit of pressure and focus.
My colleague submitted the application (because I still need to have advice) and then we went through the application process.
When you get to this stage, you’re going to have to supply similar documents. There’s a very strict list that you’ll have to comply with. For us, we had to supply:
If you go at it alone, like me, you’ll find this seriously stressful. You’re literally being picked at with a fine tooth-comb, I had to justify everything. Again my wife is lucky that I bear the brunt of it all.
I told her afterwards, in the final stages, that I was thinking it’s 40/60 that we were going to get it. This was all down to a couple of things that they requested.
The accountants reference did the trick and in 17 full days we had a mortgage offer for the exact amount we needed.
That feeling when the mortgage offer came through is like a weight has been lifted, you don’t really realise the tension you carry around in this time.
I don’t know what I was like personally but I’m sure I probably have been a bit snapped.
For 17 days it was the first thing I thought about when I woke up and the last thing I thought about before going to bed. I was carrying the burden of my wife and 2 little girls.
We moved into the house in October 2015.
I know exactly what you are going to go through because I have lived it first hand. I want you to have the success that I had.
I’m pleased to say in 6 months since specialising in self-employed I have had only 1 case out of 42 not go to offer at the expected amount.
This was due to the changes in the dividend tax that took effect in April 2016 and was completed unexpected, I try to anticipate as much as possible because I want you to get your house.
You will make me your best friend for 3 months and most of you I won’t hear from again until your mortgage deal ends and you need to relook at your mortgage. I’m cool with that.
Once that deal comes to an end I’ll be your friend again. I have some clients of 10 years who still come back to me now, ring up for some advice, sending over their children for help. We have become good friends over the years.
Every application is a competition with the mortgage lender and I don’t want to lose for you.
I want to be 100% accurate with my information every time, I’m a perfectionist. I have a bit of OCD and I don’t take no for an answer. At the very least I explore every possible avenue to make your dreams happen.
I am very passionate about helping every one of you and that passion with my direct personality is the best thing to get the job done in the simplest and easiest method.
It doesn’t need to be difficult when you’re self-employed.