I feel I maybe living in the dark ages regarding wages and expectations-deflated

[MissLou]

I went to see a mortgage advisor today, now I am the first to admit I am clueless when it comes to property, mortgages etc etc But I went to view a flat yesterday on a help to buy scheme, fantastic opportunity, cut a long story short, I fell in love with it, I have the deposit ready to go, no debts behind me, pay off my credit card on time every month/6 weeks, I can afford the monthly repayments….the mortgage advisor was lovely but basically if she could have laughed out loud at me, i believe she would have.

I gave her monthly income, i'm 50/50 employed self employed, my last 3 year s/e have not been amazing as I have been building it up on the side of my employment, these jobs have took up a lot of time one of them was even full time, so as you can imagine I have been working a lot of hours, days, now I'm on more of a balance but still need to build the s/e. So I tell her my projected figures, I tell her valuable reasons why the last 3 years records of s/e arent great ( I was away in oz for the first year so that doesnt count towards it) I said i have no debts, I pay all of bills on time, rent, I have a good credit rating and a deposit, it all meant nothing. Because I don't earn enough a month-no I do earn enough, let me re-phrase this, I don't earn enough in their opinion and haven't done so let alone the figures proving to be only slightly higher to what I'm currently paying out it was game over me.

I am gutted. I work so hard to pay everything on time, I save alot of my money, I go without things because I choose to so I can save and this happens. I understand their system and it's correct of them i suppose but how frustrating that I can afford it and because I dont meet their figures the rug is pulled beneath my feet!!

I googled the average uk wage, its £26,500 a year, now I'm not asking for peoples wages but I am no where near this figure, not by a long shot, I don't know any of my friends that are either, are any of you close to this figure? And if so do you work 24/7?!?! Do you charge high prices?? I just don't know being a hairdresser how I can hit this level?? its £2208 a month….does anyone hit this, is it possible???

 

[MissyMuffin]

I think they are very risk averse now. The days of them taking risks on people are over for now.
My son and his gf have just put down a huge deposit on their first house. They are 23. But they still had to practically beg as she's been on a trainee wage and he's only had a permanent contract for a year.
It's the self employment that they feel is a big risk but also if you've been away you probably have very little service in your pt job. Life is tough for you starting out

 

[virtues2011]

The monthly figure you are looking for is more than achievable BUT I'm confident enough to say it won't be achieved by working for someone else in this industry....and probably very unlikely these days if you owned your own salon with staff unless you are very well established.

 

[kimi1101]

If you are on 50/50 then you'd need to take £4400 a month, £1100 a week to cover that (assuming your salon owner pays products).

Depends waft you charge but for me that's fully, fully booked. Just trying to help you break it down.

You have to jump through all of their hoops to get a mortgage. I'm now five years self employed and only now on the way to getting a new mortgage.

 

[Lilypie]

I worked for a high street bank for 10 years until a couple of months ago, assessing mortgage applications and am also a qualified mortgage advisor.

Basically with SE income banks are reluctant to take a projection and will instead average your net profits over the last two years. They will tske all of your EMP income into account as long as it is guaranteed ie basic salary only. If your EMP income is bumped up with bonuses, overtime etc, they will only use a % of the additions.
On top of all that, the credit scoring is really strict if your income is £15k approx or under.

We're in the same position. Technically we can afford a higher monthly payment and therefore a larger mortgage on a bigger house. But that's on today's interest rate. If the rates were to go up, we'd probably struggle if we were to take a higher mortgage. It's frustrating I know but I've seen the other side of repossessions and for now I'm happy to stay as we are knowing we have some room for manoeuvre

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[MissLou]

Thanks geeks, I understand thy way they are calculating now and I do agree to a certain extent I mean we don't want to get into such a big mess with finances as we have/are currently in so that is good but I do not agree that they only look at one source, I mean it didn't count for anything thy what I currently pay out in rent isn't far off the mortgage I wanted, I pay ALL my bills on time I've never hit my over draft and never had debt. Surely this shows that I am a sensible person with money and dot go it side my means? So fruatratinf and with iteret rates going up it looks like I'll be in the same situation in another 3/4 years, I would have bumped my wages up but by then they'll probably be asking for more monthly income!!

I just don't see a light at the end of a tunnel at all for ppl like me. I'm on my own, I don't have a pay out from anyone else not that I want that but everyone around me, friends etx they all seem to have these opportunities thrown at them which doesn't help, I know I souls so jealous, I am, but I work longer hours than a few of them, I don't have debt like one of them, I don't p*** money up the walls every single weekend like the other and yet they have the houses and I'm stuck paying someone else mortgage bassicaly really sucks.

I agree that I don't think I'll hit that working with someone else. I work part time employed but I'm thinking about jacking it in going full time self employed, it's never going to get better, so the other idea is thinking about moving back home to save more. It's a step back but I don't know what else I can do to give trying to et a mortgage a good bloody bash! What else can I do apart from work every hour under the sun and save like crazy.

 

[EmJ]

It's so hard being self employed! My partner wanted to go self employed 2 years ago and I told him not to as we will never get a mortgage.

We've just got a mortgage, it was all straightforward as were not asking to max ourselves out with the borrowin, we chose a house in a different area so we got more for our money and have a big deposit.

They wouldn't have looked at me at all on my own as they only look at profit and it's very difficult!

 

[greenreader29]

Save for a bigger down payment, then your yearly income isn't as necessary.
I hate that they think everyone needs to have money for entertainment and such because I do not feel I have to go to the movies weekly , but they seem to think you do

 

[persianista]

I've paid hairdressers far more than that, so yes, it's achievable.
Only advice I can give is save a big deposit. Mortgages are tough to get nowadays.

 

[MissLou]

This is so true! They paint everyone with the same brush, I don't go out to the movies, dinners, nights out every week because I choose to save that money towards a house, my choice I'm happy with that but it seems it hasn't worked in my favour.

Yeah it does seem so unfair self employed get the hard deal, most of the time self employed ppl work longer hours as your self driven and you cannot say no so that what I'd be taking into account!! I you are sick or say no you don't get paid simple so no one does ever say no!

That's good to hear, it must ache viable then. I must be going wrong somewhere, I will work out how many colours/cbds etc I need to do a day or a week to come to that figure.

Yep u have the attitude now of fine screw your mortgage this year-but next year I will walk in with double my salary (hooefully) and triple my deposit and then they won't be laughing at me! Haha

If anything it's made me more determined so that's the positive. It's going to be a hard slog but I am determined to turn this around in a year, I will get my house!! Lol

 

[Sam.hop]

I can completely sympathise. I can't offer much advice as I'm as clueless as you (probably worse) regarding the mortgage application process etc. But myself and my partner are in the position to buy a house but nobody will let us!!
When we had an appointment with the mortgage advisor I thought we were going to come out of it basically with a house but instead I came out crying.
Collectively our income is nearly double than that of the average income, yet because we have purchased any furniture etc outright. We have no outstanding debts or credit cards as we haven't needed them. And we have a reasonable deposit waiting. But apparently we're not an 'ideal candidate' because our credit score is low.
I was upset because there is nothing to make it low other than the fact there isn't anything to make it higher - if this makes any sense?

We are now having to build up our score which can take up to 5 years plus. If they had looked at us as an individual and not just on the statistics. Our rent alone is £1000 a month, so could easily afford the £650 a month mortgage repayments.

Unfortunately we're just not in economically sound country and because of that banks can't take 'risks' keep your head up, and not too far in the future you will have your dream home. Good luck! X

 

[dandelionpoppy]

Not sure if anyone has mentioned the Martin Lewis site, but I think there are tips on there for improving your credit rating.
I feel sad that hard-working people, like the posters on here, can't buy their own homes. Looking back, my generation were lucky in that way. Hope it all works out for all of you.

 

[essentia]

I really sympathise with those going through this, everything is tightening up now. The best thing is to get loads of info on how to meet their requirements. Money saving expert do a free download booklet for first time mortgage applicants and it covers self employment. I always keep a credit card running and never pay it off completely as it boosts my credit rating - weird I know. When I used to pay it off I was not considered profitable to the banks and they cancelled my card. So with this one I always use it to keep my rating up. I also belong to Experian which keeps you aware of what's going on and helps you keep your rating up. Make sure you are registered on electoral roll as well as this gives you extra points.

 

[EmJ]

It's really funny because our mortgage broker told us to pay off our credit card! My partner had 2 grand outstanding on it and kept up the monthly payments as we thought it would boost his credit rating (which wasn't bad anyway)

He had the money sitting in his isa to pay the full balance and we were told to pay it off in full as they would frown upon having a credit card.

 

[Lilypie]

It's really funny because our mortgage broker told us to pay off our credit card! My partner had 2 grand outstanding on it and kept up the monthly payments as we thought it would boost his credit rating (which wasn't bad anyway)

He had the money sitting in his isa to pay the full balance and we were told to pay it off in full as they would frown upon having a credit card.

You're best to have one but pay in full every month not leave a revolving balance on it.

Once you have credit outstanding on credit cards, loans and overdrafts etc, that amount is taken off your total available credit meaning a smaller mortgage will be offered. They also calculate a rough monthly payment to deduct from your income.

If you repay each month, you're boosting your credit score but without any of the negative factors

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[carlytaylor1986]

i get just a bit more but i work in an office! its boring as hell and id love to work in beauty full time but i cant justify losing this salary as i have mortgage/bills to pay...and im in london as well, where are you based? depends on what you can charge xx