mortgage as a sole trader

W

wheels

Registered User
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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.
 

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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