Can anyone help? I have been asked by the mediator to establish my mortgage capacity. Self employed sole trader small preschool Earnings for 2001-2010 25K 2010-11 24K 2011-12 12K the reduction in earnings is due to recession, tempoary move to alternative venue which unnerved customers and son being diagnoised with cancer last year and me having to spend alot of time away from the business. I cannot see an immediate return to previous earnings and feel I should disclose by lowest earnings so I do not end up taking on a mortgage I cannot repay. Obviously STBX thinks I should disclose the prevoius amounts.
Your mortgage capacity is how much a bank will lend you. Would a bank go back 2 or 3 years and lend you an amount based on your income back then? I doubt it. Although, I am no expert on getting a mortgage when self-employed.
I am and always have been self employed, well for most of the last twenty odd years, lenders tend to want the last three years accounts to take an average though in this recession they seem to be focusing on the last years accounts, the chances are most main stream lenders will be using the lasts years income to give a mortgage potential, take care with early redemption fees and the size of deposit needed, I ended up paying close to a 25% deposit despite the oh we can do it for 10%.
Make a few online applications and print them off for the mediator.