What to do.?.

unklerosco

In summary...

I'm currently working full time, GF is self employed. And we both run another business.

Our original plan was to look towards buying late this year. Hence the reason I'm still employed, I figure if I go self employed I'll never get a mortgage. Now, if we work our asses off and have no lives for the rest of the year we should be able to get a deposit together etc.

My thinking tho is that interest rates are on the way up and house prices need to come down, I've been looking around quite a bit lately and am still amazed at the asking prices...

I'd be happy to rent for a while and keep saving and building on our deposit. My theory is that we will have a bigger deposit and we will be ready to pounce when the right house comes up.

Now, the thing is... I detest my job, its a long story but its driving me(and the missus) mental, I constantly go through stages of depression with it.. Now our business that we run together is going very well, and at present I can't direct enough of my time towards it. My dream is to leave my job and become self employed, running our current business. This will definitely increase our income and general std of living. As I said, the only reason I'm still working full time is to get a mortgage. If I feel that we are going to rent instead of buy for the next year or two I'd look towards becoming self employed.

Question is, how would banks look at us if we are both self employed. Our first business has been established 5 years this year and is growing year on year. Our new business was started last September is going very well.

If in 1-2 years if we went for a mortgage, both self employed, with an income double what we have now and decent savings how do you think a bank would deal with us.. Would it be a simple, piss off or would they treat us like applicants in full time employment??

D3PO

interesting case this one. Great example of why different times are the right time for different people to buy.

If you have 3 strong years of accounts in theory the banks should lend to you however both being self employed is a big risk to them especially with you being in the same business. Id imagine they wouldnt be interested in lending into that situation but then agian its a numbers game so if the figures are right then thats different.

not sure how much of a deposit you have now but perhaps you could buy now ? Ok so you will pay more than in 6 - 12 months time one would expect however if you get the drawdown perhaps you could then leave your job work in the business increase your revenues.

Depending on the maths this still might work out as a better option for you especially if you are having such strain in your current job. Your health is your wealth afterall

shoegirl

If you are really unhappy in your job but very confident of things working out self employed, then it might not be a bad time to buy, IF you find somewhere you both like, can afford, and are going to stay in for a while.

Rents are still high too, its not just sales prices that are high. Tax relief is going to run out in 2017 for FTBs so I think for some higher income earners esp if you are considering a 25+ year or longer mortgage and thus are paying more interesting in the early years, this might be a consideration.

Be sure that the self employment plan is actually going to work. A lot of people jump in thinking its going to be great but it doesn't work out.

Zamboni

In a nutshell, I'd play it safe.
Stay in the job, keep the bank happy and get your mortgage. Then maybe at a later stage go full time in the business.
I know it probably is not what you want to hear but if you go the other route you are taking on board two separate potential risks. Mortgage decline due to self employment and also that the business survival.

beeno67

I think you need to decide which you hate more. Your current job or the fact that you don't own your own home. By the sound of it you hate your job more. If so, best thing to do is quit and go self-employed full time. Cross the bridge of becoming a home owner or not in 2 years. If you then get the mortgage great. If not at least you are no longer doing a job that is affecting your mental health.

unklerosco

We couldn't afford to buy now, not enough saved up and prices are still too high...

In my mind I had hoped I'd be out of this job by this time next year at the latest but thats looking doubtful now. And there's only so much I can do with the new business while in full time employment. As it stands I generally get home after 6 and spend another 4 or so hours doing work for myself...

But getting away from work etc etc. My main concern is how a bank would look at us a year or two from now. Self employed, two(or three) separate business's, decent savings and income.. I think the simple answer is, no one knows.. And if they did they'd be king of the world!!

unklerosco

beeno67 wrote: »

I think you need to decide which you hate more. Your current job or the fact that you don't own your own home

Deffo the job, I'd like my own home but I have yet to see a house I'd actually be happy to own...

ricman

I wonder what area you are buying in.I see house going in certain areas in dublin,private estates for 170/180k in working class areas .
The bank will look at how much you are saving, is it regular , you should be saving at least 20per cent of your income.
I KNOW some1 who stopped paying his mortgage ,and just ,moved out,so the bank is selling the 3bed house for 170k.
ITS A fine house with front and back gardens,semi d.
OBviously if you looking at 300k houses, its much harder to get a mortgage.
Most banks need 2 years accounts from a registered accountant in order to give a self employed person a mortgage.
THE higher your savings the better your chances of getting a loan.
THE banks are more strict now re giving loans as houses are going down in value.IT helps to have a gaurantor to gaurantee your mortgage if your income/savings is lower than average.
IF YOU GO TO DUBLIN city council they,ll arrange a loan for you on any private property if your income is within certain limits,
and the house value is less than 220k.
THIS is not publicised anywhere,
ring the housing dept, wood quay.ITS designed for 1st time buyers.

I THINK YOUR INCOME WOULD NEED TO BE LESS than 75k as a couple.
I,M not sure of the income limits.THE actual loan is financed from tsb or some irish bank, ie you have to be recommended by the city council under this scheme .SUBJECT to a survey of the property.

You could get free advice from threshold re how do i get a mortgage , google threshold ie.
or EVEN GO TO SAY TSB loan officer, id say i need advice, re buying ,loans etc if i setup my own business.ITS not like its IMPOSSIBLE for any self employed person to get a mortgage.
its just you need to have x amount of savings, and a verified annual income.
AND THE business nreeds to be making a profit of x percent .
IF say you are buying a 200k house its easier if you have 40k saved in the bank,ie its easier 2 get a 80/90per cent mortgage.
I presume you are paying 900euro rent per month at the moment.
the banks look at ,annual income, 2 years accounts, how much you save per month,
is it regular saving,
are you reliable.
its not rocket science,if my income,is 15k, my savings are 5 grand, it,ll be just impossible to
get a loan of 150k from any bank.
IF YOU save 110 one week, and 20 the next, well that does not look good to a bank.
THEY also look at what loans you have out for cars etc,what rent are you paying,your credit rating.
not to be rude theres people running shops who are running sucessful business,s but most of thier income goes on rent, interest payments etc
ie they are over leveraged.
THE statement , ah sure,nobody knows, well that makes no sense to me at all,
the loan rating formula is pretty simple.
IF MY INCOME, is x, my savings is y, my debt is z, my monthly expenses are j,its pretty easy to work out how much i can borrow.
IF YOU HATE YOUR JOB can you not get another using the same skillset, or is it you are in a badly run company
that you dislike.
,

gurramok

ricman wrote: »

I wonder what area you are buying in.I see house going in certain areas in dublin,private estates for 170/180k in working class areas .

You really need to know local knowledge before buying in the 'cheapest' areas at the moment.
I came from one of those areas in a private estate next to majority council housing. I wouldn't live there again. Isolation from facilities was just one of a string of issues.
So a buyer would need to really research before jumping into an area which appears 'cheap'.

unklerosco

We're looking out around the Malahide area, we work out there and all our friends are out that way... I know its an expensive area but we're looking around the outskirts of Malahide, from what we can see ur paying around €100k premium on a 3 bed semi just to have an address in Malahide compared to similar houses just outside the area

D3PO

ricman wrote: »

IOBviously if you looking at 300k houses, its much harder to get a mortgage.
,

WHAT ?? seriously thats a rediculous statement. it doesnt matter if its 300k or 3 million its based on affordability. :eek: