100% mortgages

[seagullsovergrimsby]

We've just finished working on the One Hyde Park project. The most expensive penthouse sold for £100 million, reputedly bought by a Saudi Prince for his son as a 21st Birthday present. I wonder what sort of mortgage he needed

No mortgage required , they would have paid in gold bullion.

 

[looney]

100% morgages are irrelevent.

Its the Income to morgage ratio thats important. Lending people money at 100 times their gross anual earnings is f***ing crazy. House price rises are not cool either, if they out strip rises in income eventually they become un affordable then the market crashes.

 

[tedebear]

I'm going to bow out of this now, but this has all the hallmarks of an internet scam.

Savings !! savings !! free money - just register first and pay a fee.

Remember, if it sounds too good to be true, it probably is.

A "friend" of ours in the trade is practicing this very thing....I nearly had a drop down drag out with him in the Sov about it....

 

[Uncle Spielberg]

Cheers, Thats my feeling as well. I guess also if the rates start going up I could jump on a new fixed rate lower than I am on now and still be better off.

tinx

The Woolwich have brought out a very good tracker rate with the option to lock into a fixed rate at anytime with no penalties.

 

[Adam Virgo's Shirt]

I dont agree with you there, self employed people's profit is the equivalent of an employed persons gross salary, both are before tax and NI. A good self empoyed person's profit should be at least what they would earn employed in the same sector.

When you work out how much to charge for your services as a self employed person you would be stupid not to take into account your overheads.

You are missing the point!

It isn't about what self employed people charge for their services, it's about what they report to HMRC as being net profit

When you file accounts, you report as much as feasibly possible as allowable expenses. So even though you might actually be able to afford to live month to month in the same way an employed person can, on paper you put as much as legally possible down as allowable expenses to reduce your net profit, and therefore your tax bill

In the future with the new self assessed mortgage rule, self employed people are going to be faced with the choice of continuing to report all their expenses for a low tax bill and subsequently low affordability basis for a mortgage, or putting their gross income through as profit to enable them to get a higher mortgage, but the government will benefit from that as the tax bills will be higher

In my cynical opinion, that is precisely the reason this ruling has been made!

 

[Uncle Spielberg]

You are missing the point!

It isn't about what self employed people charge for their services, it's about what they report to HMRC as being net profit

When you file accounts, you report as much as feasibly possible as allowable expenses. So even though you might actually be able to afford to live month to month in the same way an employed person can, on paper you put as much as legally possible down as allowable expenses to reduce your net profit, and therefore your tax bill

In the future with the new self assessed mortgage rule, self employed people are going to be faced with the choice of continuing to report all their expenses for a low tax bill and subsequently low affordability basis for a mortgage, or putting their gross income through as profit to enable them to get a higher mortgage, but the government will benefit from that as the tax bills will be higher

In my cynical opinion, that is precisely the reason this ruling has been made!

Spot on. In any case it will rule out the self employed getting a mortgage to be able to purchase and being able to re mortgage so it will exclude 4 000 000 self employed people from the market in the future.

 

[beorhthelm]

...so it will exclude 4 000 000 self employed people from the market in the future.

which is precisely why it wont come to pass in the final analysis. self assesment with out accounts will be banned but with accounts will be fine. so you might have to chose between massaging the numbers for the tax man or the bank manager, but thats really a seperate issue.

 

[The Modfather]

The Ernst & Young thinktank believe base rate will remain at 0.5% until 2014 - although this is obviously just an opinion, its hard to see rates increasing above at most 1% for a number of years.

The current base rate is a 'one-off' emergency rate due to potentially the worse recession for 60 years. This cannot stay this low if the economy is too recover.

Indeed, one member of the Monetary Policy Committee recently voted at their monthly meeting to increase the base rate now.

I would urge anyone not to presume we will have this rate for the long term.

 

[Uncle Spielberg]

which is precisely why it wont come to pass in the final analysis. self assesment with out accounts will be banned but with accounts will be fine. so you might have to chose between massaging the numbers for the tax man or the bank manager, but thats really a seperate issue.

The lender will base their lending on the self employed, net profit after allowable business expenses.