Stewart Rennie is product development manager at Network Data Ltd
“As this is Theresa’s first year of trading, she may not have a complete picture of what her earnings will amount to, so it will be beneficial to see a copy of her business bank statements to confirm they are in a positive state.
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Theresa has yet to complete her first year’s accounts, so many of the traditional lenders will not consider her application. However, if the loan-to-value (LTV) is 75 per cent or below, some may well look to lend if she had almost completed one year’s trading, so some calls to commercially-minded underwriters could prove fruitful.
If she is looking to borrow over 75 per cent LTV, her best options will lie with lenders such as First National, Kensington Mortgages and SPML. In addition, recent diversification in the specialist sector product offerings means some lenders now offer prime ranges for those who have not experienced past credit difficulties.”
Richard Smith is a consultant at pi financial Dixon Sutcliffe & Co
“As Theresa has only just starting trading it does limit her options and will increase the monthly mortgage costs. Only a small number of lenders will consider her application based on her projections for the next 12 months.
Anyone applying for a mortgage under these circumstances must be extremely careful to ensure they are able to make the payments on time and have money available while the business goes through the early stages of development. It would also be wise to construct a business plan to ensure all costings are taken in account.
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A self-cert mortgage is most appropriate. Kensington offers first-day start ups on a mortgage based on the likely earnings of her profession, so being sensible about what she declares will be monitored. It depends on her having the relevant business experience from her previous role to justify her likely income.”
David Hollingworth is head of communications at L&C
“Generally speaking, the less time a person has been self-employed, the more restricted their mortgage choice will be, particularly if they don’t have a year’s accounts. A good deposit can help, as it may mean less income verification. However, most lenders still require one or two years accounts.
Standard Life is worth looking at, as it will consider borrowers that have not been self-employed for long, especially if they are in the same line of work as their previous job. It has a two-year discount at 5.39 per cent with a £599 fee.
Alternatively, Theresa could consider a self-certification loan. Self-cert lenders typically require the borrower to have been self-employed for a year or more, although Platform requires just six months on conforming rates and Kensington will self-cert from day one.”
