Can we get mortgage approval while working in the UK?

I wasn’t sure where to put this,

My problem is two fold

I am currently in a job which I like but don’t love, I love that it is only 5 mins from where I live, but the job is not very challenging, (this may improve, I have been told that the summer months are slow) I have only been in the job 5 months. The first couple of months were good, but I don’t know really if it was busy or just the lack of experience that made it seem so. My current salary is 26K per annum plus commission (nothing guaranteed)

My BF currently lives in England where he will be until April of next year; this is open to debate in light of the recent announcements about mortgages. The position he was offered was very good from the experience point of view, and we thought the Sterling wage would help us raise the deposit we needed for a house a bit quicker, but this is not as strong a motivation for being apart as it was three weeks ago. Not sure of his annual wage but he makes about £1800 per month, of which he sends me £600-£700 per month (€750+).

I have just started saving; up to this I was paying off some debts we had accumulated while travelling the world (completely gone as of last month).

We have one other debt, my car loan, which has approx €5800 outstanding, (€250 per month) I am also paying the max into an SSIA due to mature June 07

Problem No 1
We are looking a new development, which we would like to buy in; the house would be ready May of next year. Can we get mortgage approval given our current circumstances? And how much would we be approved for? We are both FTB aged 26. What will be the situation when he comes home to look for a job?


Problem No 2
An opportunity has arisen in the last 24 hours to purchase a business, with a friend, The business is for sale for excess 250K and I believe the annual income of the business is 300K (not sure if this is gross or net, a big difference I know) this would include the lease, stock, name, goodwill etc of the business.

Should I even consider this as buying a home with my BF is my priority? Will the fact that I will be working for myself affect the mortgage application (we intend to set our selves up as ltd company with the two of us as directors)?

If I can still go ahead and buy the house, can anyone point me in the right direction for some research on buying a business? I have no idea where to start, would a bank or other institution lend two people enough to buy a business with a proven track record?

Re: Changing my life???!!!

1. All I know is, the first step really when considering starting a business, is to get an accountant.

2. My boyfriend has started a new business and the banks wouldn't even consider his earnings when we went for a mortgage. He'll need 3 years audited accounts.
They said if he's doing really well, they may consider looking at him in 18 months time. But until then just forget it. I thought this was a bit unfair but the bank manager pointed out that most businesses fail in the first year so they couldn't take such a huge risk, which is understandable.
Good luck whatever you do. And speak to an accountant, you're going to need help with those figures!

Re: Changing my life???!!!

G7979 said:

Problem No 2
An opportunity has arisen in the last 24 hours to purchase a business, with a friend, it is a coffee shop in an affluent area, and this is an idea that I have always quite fancied but never really looked into it. The business is for sale for excess 250K and I believe the annual income of the business is 300K (not sure if this is gross or net, a big difference I know) this would include the lease, stock, name, goodwill etc of the business.

Click to expand...

I'd guess the 300K is gross, nobody would sell a business returning 300k net per annum for anywhere near 250K, you are normally looking at a price that is many times net earnings.

Re: Changing my life???!!!

300K gross would be my guess too, this business is not officially on the market yet so don't know the whole facts, my friend found out about it

Re: Changing my life???!!!

any hope the premises has an attic convertible into a "studio" - isnt that the estate agent speak for an attic??

If you could live there you'd be saving rent & getting a deposit going plus working all the hours God sent which would help your business so long as cabin fever didnt hit.

I'd say the banks would think ye are a bit young to being giving loadsa dosh to, so I'd say it looks like an either/or situation re house & business. As above, wouldnt it be great if ye could get 2 for the price of 1 !! Maybe taking on the 2 in full would be a bit too much pressure for yourselves anyway, life is long and all that, you'll be chained by the banks for long enough so maybe try to enjoy life a bit while you're very young.

Re: Changing my life???!!!

Many thanks for the replies folks, I think it is looking like the coffee shop will stay as a day dream, it would affect our financial position for the mortgage, if pricilla is correct, however would the fact that the business is established over 15 years have any bearing? we would have the accounts that pricilla mentions,

that siad I am back to Problem No 1
We are looking a new development, which we would like to buy in; the house would be ready May of next year. Can we get mortgage approval given our current circumstances? And how much would we be approved for? We are both FTB aged 26. What will be the situation when he comes home to look for a job?

Talk to a lender or to a mortgage broker. My guess is that the lender would want to see you both in permanent jobs for at least 6 monhts, before considering lending to you at all. That sounds as if boyfriend should come home immediately and get a job, now that the main advantage in going to the UK is gone and there is a considerable disadvantage in being there.

You may not get mortgage approval until next year, but from the house price point of view, it is no longer as urgent. Prices are as likely to fall as rise over the next 6 months to a year.

Banks will not lend you money to buy a business, no matter how good it is, unless you have really good security. So forget about the coffee shop and concentrate on buying your home.

Brendan