mortgage as a sole trader

W

wheels

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I'm currently looking into getting a mortgage as a sole trader with backing from my father. I'm only registered since last November so my overall earnings will only account for three months. My father however owns a number of properties and has a sizeable income. He is retired but works a full time job. The plan would be to buy a 2-3 bedroom apartment and for me to rent the remaining rooms. The first bank I went to stopped short of calling me a fool. While I could deffinately afford repayments, and would have at least 11% (with a possibility of 15%) of what I was asking I'm now begining to doubt I stand a chance. Should I drop the whole idea and wait two/three years until I have decent audited accounts?

Regards,

Wheels
 
Because you don't have a minimum of one year's accounts your father will have to be the joint borrower (although he could stay off the deeds for Stamp duty/CGT purposes) so the application will be based on his income and outgoings. Having said that if you are working as a sole trader in an industry you were previously a PAYE worker (IT would be a good example) and you have a contract for at least 12 months lenders would assess you in your own right.

Sarah

www.rea.ie
 
I had a similar fear when i borrowed for my home. I simply told my accountant to write a letter to the building society at the time and there was no problem. And i did not have a years accounts either. I say shop around.
 
Sarah W said:
Because you don't have a minimum of one year's accounts your father will have to be the joint borrower (although he could stay off the deeds for Stamp duty/CGT purposes) so the application will be based on his income and outgoings. Having said that if you are working as a sole trader in an industry you were previously a PAYE worker (IT would be a good example) and you have a contract for at least 12 months lenders would assess you in your own right.
Click to expand...

It would be my hope to go on his income and outgoings as well as mine but because I have no fixed contract (for more then a few months at a time) would this be possible or would I have to go on his alone? Also one bank said his age would be a problem as he is 59.
 
There's no hard and fast answer without looking at your application (bank statements, projections and all your father's details) - when the circumstances aren't straightforward they are underwritten on a case by case basis.

Sarah

www.rea.ie
 
Could I ask another question along the same lines...

Say, I am in a well paying job and about to go start up a new business and have found a premises which I would like to purchase. If i go to the bank with my payslips for the last few months they will reflect the pay i had received over the last few months and would be well able to afford the mortgage.

However as a new business will be started up (and a small profit is envisaged in the accounts - before salary) would the bank take into account the argument that "I wouldn't leave a good job if i didn't expect to earn at least as much".
 
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