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UK mortgage advice
 

So, I may be in a position to buy a house at the end of 2019 or 2020 and I wanted to know as per the AML, the estate agent has to verify where the funds have come from..etc.

I have 7 years of wage slips, but in the last 4 years i've been unemployed as I was made redundant. In those 4 years i've just been living off my savings and making the odd stealth sale here and there.

I am just wondering how the estate agents go about this.

I don't keep invoices on things I've sold, i've heard horror stories of the agents customers unable to verify deposits and they've been reported to the NCA.

Also horror stories of customers being forced to check 7 years of bank statements. This is going to be difficult for me as I've changed bank twice.

Has anyone experienced this and the process that they could shed more light on?

Re: UK mortgage advice
 

Sounds like you're buying a house outright as a cash buyer?

Without a job you won't be able to get a mortgage.

You will need to prove where the funds have come from. No way around it as far as I know. (I don't know too much admittedly)

Re: UK mortgage advice
 

It’s not the estate agent that you need to really worry about. They don’t have anything to do with mortgages they just show you the homes

No one would report you to the NCA though.

You should look at starting a limited company, employing yourself through it. Take the maximum you can as tax free allowence and then £20,000 or so per year on top of that as dividends (means you don’t have to pay NI that way)

Your going to struggle to get a mortgage without any employment history for the last few years though. Or are you buying for cash?

Re: UK mortgage advice
 

Wow. Even if you've got the cash in hand they want you to prove where it came from when you're buying a home in UK? No wonder all the Saudis come to USA to hide cash in "investment properties". No questions asked over here.

(Sorry I don't have more to contribute - thought the thread was an interesting topic)

Re: UK mortgage advice
 

Sorry, I should mention, I plan to place 20k as a deposit. And I do plan to work for 5 to 6 months prior to taking out a mortgage.

Re: UK mortgage advice
 

The Saudis come here too, and the Russians. London is a safe haven for their dirty money. If you have enough money you can get away with anything. It's the little guy that suffers.

Re: UK mortgage advice
 

London during the summer is the hotspot for Saudi and UAE kids. They all come here and the streets are covered in super cars. With that comes a lot of property purchasing. So long as you have enough money they don’t care

@J4G3D - Your going to really want 2/3 years employment history

You maybe able to get away with 5/6 months but you would be very lucky.

I would recommend looking at part buy part rent in your position

Re: UK mortgage advice
 

Just a copy of you bank statement showing the 20k will do it then. When they ask where its from you just tell them your savings.

Re: UK mortgage advice
 

The thing is, the 20k was earned 7 years + ago. Reading up online, some people have been asked to provide bank statements for the last 6 months, they've submitted them and they've come back asking for 12 months..and so on until they requested 7 years of statements (or to show where the deposit came from).

I have a box full of wage slips totaling 100k. Would this be sufficient or would they still want a statement from 8 years ago to prove it?

Re: UK mortgage advice
 

You maybe best going to take to a bank mortgage advise or broker

It’s pretty common for them to want to see 4/5 years at least

If you don’t have any employment for the last 2/3 years though you really are going to struggle

Re: UK mortgage advice
 

I think that depends on the soliciter.

You could always ask someone to 'gift' you the deposit. Then pay them back once all is done.

Your biggest issue will be getting the actual mortgage. As James says you need 1-2 years wage slips typically.

Re: UK mortgage advice
 

According to here: https://www.moneysupermarket.com/mor.../top-ten-tips/

It says you should be in the same job for 3 to 6 months. Which is what I read everywhere giving advice online. Has things changed?

My last employment was for 7 years. So Its not as if I jump ship often. I was made redundant in that job and due to stress and issues I've not got another job since. Instead opted to live off my savings and try to make the odd quid or two on ebay..etc.

Re: UK mortgage advice
 

That is why it’s best to go and talk to a mortgage advise or broker about it.

When they say 3 to 6 months that’s usually based on you having come straight from another job usually

A mortgage broker or advise will be able to give you much better information though

Re: UK mortgage advice
 

Thanks, I guess I will do that nearer the time.

I have a CCJ coming off my credit file in July, so I will wait till my credit has improved once thats dropped off and then go to a mortgage adviser.

I understand whoever does give a mortgage wants to see 3 - 6 months of statements to make sure you've had a regular income and to see your outgoings..etc. But what about the deposit? if I was throwing in 20k deposit, they'll want to see where its come from. What if some deposits throw a red flag? like, for example, i've always had cash laying around, once I bought a car with that cash for 4.5k and sold it on for 5k, the 5k was a bank transfer into my bank. How does one go about proving all this?

Then theres the stealth income from paypal.. What if that gives a red flag.

I like to plan ahead to make sure im ok. Mortgage adviser is good advice though, I will definitely go down that route nearer the time.

Re: UK mortgage advice
 

You should have proof of the car sale, so that one should be pretty easy to prove

So long as they can see the funds slowly building up then they dont need that much proof. 20k is a relatively small amount in the grand scheme of things.

Best thing you can do though is go and talk to a adviser before hand, they can then give you goals that you can aim towards.

Re: UK mortgage advice
 

No proof, I keep nothing like that. Thats the thing I worry about.

The 5k cash I had never went through a bank..etc. Its cash built up over time that I kept at home.
Then used it on a car, then sold the car and receive a bank transfer...

I think a big fat red flag there :(

Re: UK mortgage advice
 

Go and talk to a mortgage adviser about it....

If its from the sale of a car then really that is fine. It would be better if you have proof though, hopefully you at least have the reg number still

But talking to a mortgage adviser is by far your best next move.

Re: UK mortgage advice
 

the little and bigger domestic guy is always asked for money laundering proof.
the foreigners if bigger guys (if they have dirty money) have special brokers or do it via family. that filter it so it looks legit eg. via a company. Plus when it is from abroad it is a lot harder to check up on.

Re: UK mortgage advice
 

this is interesting topic for me

Re: UK mortgage advice
 

Just to add...

You'll need to speak to a broker. They will guide you through things and tell you straight up what your odds are of getting a mortgage, and if not, what you should do in the interim.

£20k is insignificant. I doubt they'll ask anything about that.

As for statements, this is just to show proof of income / salaries over the course of the last few months, just to make sure it adds up with your declared salary.

That is because the mortgage you'll be offered will be around 4x your salary. If its £25k for example, the max. mortgage you can expect is £100k from a bank.

Then you'll have your £20k deposit. Which means the value of the home you're purchasing can be a maximum of £120k (given your salary is £25k/yr).

Of course you wont get a decent home for £120k, that's just an example, so you get the gist.

That's the simple stuff. Buying a home is very simple and straightforward when things add up.

In your case, and the broker will reiterate this, your lack of employment will immediately kill all hopes of getting a mortgage.

You need to show them you're employed (be it working for someone else, or you running your own company).

I think you're a long way away from getting a home. But its good you've started to get things into place now.

Re: UK mortgage advice
 

Plus as has been mentioned a few times, NO mortgage company will give you a job when you can't show a P60 showing some earnings for the previous tax year. You can't just get a job 3 months before.

Best option go self employed legit, sell some more stealth stuff, make 25k year profit you'll pay 4k max in tax 1.5ni (or has been said go limited and pay dividents to avoid ni) you'll need 2 years SA302 to get a mortgage

Re: UK mortgage advice
 

Yes, that's another thing. If you go the self employed route now, you need to have been self employed for at least 2 years to get a mortgage. Some companies accept 1 year, but very few, and with very stringent requirements.

If you go the employed route, you may not make as much as you could being self employed, so that would restrain how much mortgage you'll get. But, you'll get the mortgage with less of a fuss, and about last 3 months worth of payslips (contingent upon you having worked a while).

Re: UK mortgage advice
 

Typo? :p

If you are the sole shareholder of a limited company, some banks will look at your companies finances, as oppose to the salary/dividends you take out from it. That's neat, because they understand people are trying to be tax efficient.

Re: UK mortgage advice
 

With regards to the last few comments.

My relative had his own business, turned over 1m pounds (pocketed 40k) he was unable to get a mortgage. Had his business for many years. He had to go on the booked on another relatives business, to obtain wage slips and only then could he get a mortgage.

So those saying go self employed.. How do I prove salary without wage slips?

Also, my friend got a mortgage 1 month after getting married. He had no job, just selling cars on the side (not paying tax, not a declared business). He managed to get it no problem.

Just confusing, no doubt I will struggle.

Re: UK mortgage advice
 

First instance - chances are he was turned down to to not having a high enough income

Second friend - if it was joint then likely the wife was earning enough. He would not have been able to get one by himself without a proveable income

Re: UK mortgage advice
 

He was pocketing 40k and wanted to buy a 340k house. He said it doesn't matter how much you earn, if you're self employed they'll reject you regardless.

Second friends partner was working. But as he's got a joint mortgage, how did they accept him if he's not worked?

Re: UK mortgage advice
 

He doesn’t earn enough to get a mortgage for a house that expansive unless he has a £180,000 deposit

You get a mortgage for 4 times yours annual earnings usually. He would need to have a £34,000 deposit and earn £80,000 a year.

It’s nothing to do with being self employed he simply doesn’t quality

Joint mortgages are done on joint earnings. If the partner is earning enough than that is all that matters.

Re: UK mortgage advice
 

If you're self employed it's easier to get a broker to find you a mortgage. They will help you find lenders and tell you exactly what the lender needs to see from you.

You would need to explain your entire situation to to them.

Theres too many variables to consider regarding your friends situation to jump to any conclusions.

Re: UK mortgage advice
 

Exactly this.

Re: UK mortgage advice
 

According to the gov website, to get a SA302 form, you need to work for 4 years?

https://www.gov.uk/sa302-tax-calculation

Re: UK mortgage advice
 

Why you have not already gone to talk to a mortgage brokers I don’t know.... they are who you need to talk to

Re: UK mortgage advice
 

You cannot compare friends and family to yourself when you're asking why a lender did lend to Person A but not Person B.

Forget the fact that no two people will be treated the same due to an array of variables, but no two lenders will treat the same person in the same way.

One lender may deem a person risky, reject mortgage application, but another lender may wish to accept.

Look, you've been told all the basics here, and there's nothing more anyone here can add, all you can do now is speak to a broker and see what best can be done.

Re: UK mortgage advice
 

Because I still have a CCJ, so Im waiting for that to come off first.

No point going to a mortgage broker with a CCJ and no job is there? it is the wrong time to go. Hence why Im asking questions in advance.

Re: UK mortgage advice
 

That is understandable, but you've/others mentioned that you wont get a mortgage unless you've worked solid for 2 years. Why say that if no two people are the same when applying for a mortgage? seen as my friend didn't work for 2 years prior and got a mortgage with his partner.

I have a partner who's currently working as well.

Upon googling, I can't seem to find this 2 year working preference. All I see is that you should be working for a minimum 6 months and that you should ideally be out of your probation period.

Thanks for the info, but I guess I will need to do a bit more research before my CCJ drops off.

A mortgage broker/adviser is on the cards when the time comes.

Re: UK mortgage advice
 

Need to wait for that CCJ to drop off (which takes 6 years) before applying for anything but you can ask for advise before that to make sure your in the best position when the CCJ drops off.

You really should go speak to a broker.... otherwise you will get to the point when you are ready to apply only to find out that you should have done this or that 6 months ago.

Re: UK mortgage advice
 

Hi James, so the maximum tax free allowance as of 2020 is £732.00. With the dividends do I take it out as a lump sum at the end of the year or can this be spread?

Re: UK mortgage advice
 

The Saudi's have bought up half of London.

When you got money you can buy what you need to "prove" where it's come from.

What the OP needs to do is go find the equivalent of Saul Goodman in his town and ask for advice 1 to 1. Not on a public forum.

Re: UK mortgage advice
 

^^^ this is a two year old thread only bumped by a serial spammer.

Re: UK mortgage advice
 

Never the less an interesting read as I missed it the first time round.

Re: UK mortgage advice
 

Too true :) props