Self employed mortgage difficulty - Full Time Match Betting discussion of MSE article

[EvilMickey]

To those that don't frequent the dark side, I started a thread there last night after reading the MSE article about self employed needing to prove income to get a mortgage. Thread can be found HERE article is HERE

Thought I'd open it up to TGT, may have more useful replies from non MSE crew


Scenario: I am a young full time "advantage player" with effectively zero employment history. Can I make my deposit from advantage play and then convince a bank to lend me a sensible sum of money for a house, or do these new guidelines mean I am stuffed without employment?

As they say in exams: Discuss!

[Andy]

I didnt read the article but...

Can I make my deposit from advantage play

Yes I would have thought so if you are good at it and focus.

and then convince a bank to lend me a sensible sum of money for a house

The short answer is probably not.

If you have very good records going back for a few years and/or you can get an accountant to audit them/approve them somehow as your "books" then I suppose maybe you could but it would not be easy.

I believe it is possible to make a decent long term income from it. BUT the person you speak to at the bank probably would not. Even if you could explain the relatively low risk nature of it (bank employees are the last people to ask about risk) it would still be hard to get them to even submit the application. If they did it is stil not them that decides it is sent to back office staff who almost certainly would decline it.

As they say in exams: Discuss!

Is this hyperthetical or do you really intend on trying it? If you actually intend on doing it there are a few ways to get the mortgage anyway but it is dependant on how much of a mortgage you want and a little bit close to Mortgage fraud. But there are ways.

[Hippyer]

I don't know what exams you have taken but the ones I took I certainly wasn't told to discuss anything.

As they say in exams: Discuss!

It was more like, "silence!"

I read the article from MSE recently as well and have had the same thoughts as you also being someone that isn't a home owner and that being the goal in the future.

I do have another income aside from AP that I am able to prove but sadly it is unlikely that it is enough to persuade a bank to offer me a mortgage.

The way I see it I have to increase my taxable income if I have any chance of one day being offered a mortgage.

I can certainly use AP to help towards building up a deposit but like you have read in the MSE thread you can't declare it, prove it's longevity or persuade a bank to lend to you even after proving your AP income. The good side of this of course is that you don't have to pay any tax on it.

I don't think there's any other option than to find a legitimate taxable way of earning an income. So employment or self employment.

[Hippyer]

Is this hyperthetical or do you really intend on trying it? If you actually intend on doing it there are a few ways to get the mortgage anyway but it is dependant on how much of a mortgage you want and a little bit close to Mortgage fraud. But there are ways.

What information are you privvy to exactly?
I'm asking for mortgage fraud advice, that can't be a good thing.

[EvilMickey]

Think Andy should PM both of us!

I have enough for a deposit on a cheap property. If I knuckle down and things continue at the current rate, I'd be very tempted to buy a damn house in cash. I think we're agreed that AP will get you capital, then it's worth getting a job to have an income. Or get OH to get a job with a sensible wage and take out a mortgage in her name. Bottom line is that either AP needs to go really well or a job needs to be in the equation! lol

Maybe it's a "newer" exam thing - but a question would give a statement and then simply say "Discuss".

[dark_knight]

Yeah, I think Hippyer thought you meant discuss with others in the exam hall

[U4EA]

BUT the person you speak to at the bank probably would not. Even if you could explain the relatively low risk nature of it (bank employees are the last people to ask about risk) it would still be hard to get them to even submit the application. If they did it is stil not them that decides it is sent to back office staff who almost certainly would decline it.

Bit of a brainfart this one but Duncan Bannatyne talks about this a lot in his 'Anyone Can Do It' book. He basically said that there is no point in trying to convince anybody who works for a bank because they all work off conventional models. First time he encountered this was when he gave up his ice-cream van buiness to start an old folks home. He saw that they was new governmental regulation coming in to pay X amount of the resident's living costs (i.e. their rent). He went into his local bank, who knew of his previous success with his first business, and showed them the plan to create this home within the government regulation required to get the government contribution, effectively meaning the government would be paying a fair amount of the rent/income for the business.

He wrote up a business plan explaining the demand within the area of this type of home, the demographics etc etc etc. The bank agreed on everything except for 1 thing - what would happen to the business if people defaulted on the rent? That, explained Duncan, was not a problem... the beauty of it was that the Government would be paying it as a result of their own laws and, therefore, could not default.

"Yes, but we can't lend you the money in case they default."

"But it's the actual Government that will be paying for this. They can't default!"

"But if they do, the bank loses a lot of money."

"You're not listening to me... they HAVE to pay it. They are the GOVERNMENT. They are not going to default. That's why it's such a secure business."

"But we have to look at if the paying the rent do default... we will lose money."

"Look, you're not listening to me... "

And so on. They wouldn't budge. He ended up going to credit card companies and financing the whole thing himself. He got Government approval, and that is how he made his first £1M. He makes a point in the book of saying that you should avoid dealing with banks because they don't understand good business ideas - they just put anything through generic models... "Computer says no!"

[TonyMarc]

"Cheap property" - is there such a thing?
Forget banks or mutuals, they are virtually bankrupt and there are more problems ahead when they have to pay back the BoE special liquidity scheme and other government freebies.
Save your money and buy a house outright for cash (or with the smallest of mortgages) when the housing market sinks to sustainable levels in one to five years time.

[EvilMickey]

"Cheap property" - is there such a thing?

In relative terms, yes. 3 bed semis available locally for £100,000ish. One bed flat in Brighton could set you back double that (or so I'm told)

Save your money and buy a house outright for cash (or with the smallest of mortgages) when the housing market sinks to sustainable levels in one to five years time.

I think both those points tie in with one another - by the time I've (hopefully) got the cash investment, some suggest prices will have dropped. A brighter side to the thread!

[TonyMarc]

£100K is a huge amount of money. It will take most people a life time to earn this amount (in conventional jobs) and then most people will also be lucky to be in safe jobs and meet constantly higher bills over the years. I wouldn't borrow anything from banks or BS at this moment in time because the good times are well and truly gone and they will screw people to make themselves solvent again. People will/have become cash-cows.

Just keep saving mate and don't loose sight that you'll be in a wonderful position in a few years time. Mugs borrow money at high interest rates so that they can join the rat race - they become debt slaves and constantly looking over their shoulder hoping they keep their job and can meet all their bills. Cash is king.