Mortgages for contractors/self employed
Discussion
Bristol spark said:
Sarnie, if you don't mind quick question roughly within context of this thread.
Last couple of years ive only taken around £12K/year salary + director loan repayment, whilst building up my business.
I have now very recently started taking some dividends, to bring to a normal income.
How long would i need to wait before im likely to be considered for a mortgage.
Ie, how many months/years income proof would normally be required?
Cheers
From what you've said, you can lend straight away.Last couple of years ive only taken around £12K/year salary + director loan repayment, whilst building up my business.
I have now very recently started taking some dividends, to bring to a normal income.
How long would i need to wait before im likely to be considered for a mortgage.
Ie, how many months/years income proof would normally be required?
Cheers
The issue will be the figures and how much you want to lend.
The problem is that lenders average out your figures across two years but some will be an average of the last three years. But then also, there will be lenders who will lend against the latest years figures thus not penalising for the lower previous years..........it all depends on what you need, when you need it and what you have to show at that point in time.
There is also the option to lend against your companies net profit plus the salary you've taken.........I have lots of clients where the net profit of the business is huge but it makes no sense for them to draw all of that profit out of the business and taking a huge tax hit on the salary and dividends, just to secure a mortgage...............
A decent broker will be able to navigate through your circumstances and find the best way to secure what need
Sarnie said:
From what you've said, you can lend straight away.
The issue will be the figures and how much you want to lend.
The problem is that lenders average out your figures across two years but some will be an average of the last three years. But then also, there will be lenders who will lend against the latest years figures thus not penalising for the lower previous years..........it all depends on what you need, when you need it and what you have to show at that point in time.
There is also the option to lend against your companies net profit plus the salary you've taken.........I have lots of clients where the net profit of the business is huge but it makes no sense for them to draw all of that profit out of the business and taking a huge tax hit on the salary and dividends, just to secure a mortgage...............
A decent broker will be able to navigate through your circumstances and find the best way to secure what need
I had this. Company making good money but I draw little. My broker who doesn't charge a fee (but obviously gets commission from the lender) got me a good mortgage with Virgin Money. Deposit 31%The issue will be the figures and how much you want to lend.
The problem is that lenders average out your figures across two years but some will be an average of the last three years. But then also, there will be lenders who will lend against the latest years figures thus not penalising for the lower previous years..........it all depends on what you need, when you need it and what you have to show at that point in time.
There is also the option to lend against your companies net profit plus the salary you've taken.........I have lots of clients where the net profit of the business is huge but it makes no sense for them to draw all of that profit out of the business and taking a huge tax hit on the salary and dividends, just to secure a mortgage...............
A decent broker will be able to navigate through your circumstances and find the best way to secure what need
Many brokers baulked at the prospect of me getting a mortgage. Many said you need to draw the money down in your name. Many are s
t. One knob sent me some stupid proposal the details of which I've forgotten. But it was so expensive it was laughable and he told me it was the very best I could hope for in my position. I used mortgage solutions in Hitchin. Ask for Colin. Guy definitely knows his stuff
Just in the process of remortgaging and the numpties I've spoken to at Barclays and L&C are forcing me to consider my options as they just don't get it
My LTV is low and i've been contracting for nearly a decade
I don't really fancy paying a specialist to speed things up but i'm keen to take advantage of rates whilst they are low
My patience is running low... should i just be responding to their silly questions or are there better options
My LTV is low and i've been contracting for nearly a decade
I don't really fancy paying a specialist to speed things up but i'm keen to take advantage of rates whilst they are low
My patience is running low... should i just be responding to their silly questions or are there better options
martt said:
Just in the process of remortgaging and the numpties I've spoken to at Barclays and L&C are forcing me to consider my options as they just don't get it
My LTV is low and i've been contracting for nearly a decade
I don't really fancy paying a specialist to speed things up but i'm keen to take advantage of rates whilst they are low
My patience is running low... should i just be responding to their silly questions or are there better options
I have dozens of Contractor clients.........I've never placed one with Barclays!My LTV is low and i've been contracting for nearly a decade
I don't really fancy paying a specialist to speed things up but i'm keen to take advantage of rates whilst they are low
My patience is running low... should i just be responding to their silly questions or are there better options
What are they asking?
RacerMDR said:
Contractor Mortgages Made Easy - CMME
From their site;"Mortgages
CMME charge a success fee of up to £895 per obtained mortgage offer"
Wowser...................£895!..................I'll admit, I have a severe dislike of these firms and not sure why people pay them fees like this.......they know nothing more than any other knowledgeable broker, have access to no different rates or lenders.........they effectively prey on Contractors thinking that their circumstances are so complicated they need to seek out "specialists" like these and pay fees like these.
Or perhaps I'm looking at this all wrong and we should be charging Contractors £895!?!?
Rant over.....too early for wine??
Sarnie said:
I have dozens of Contractor clients.........I've never placed one with Barclays!
What are they asking?
Barclays i spoke with directly but it took an age for them to grasp how i pay myself with my salary and the dividend split between me and my wifeWhat are they asking?
I've been asked to have my annual accounts to be audited (they had already been signed by my ICAEW accountant) as they were entitled 'unaudited'. Most of the conversations seem to be me trying to understand what it is they're asking for.. it's been very painful as they get themselves confused between company accounts and personal returns!
martt said:
Barclays i spoke with directly but it took an age for them to grasp how i pay myself with my salary and the dividend split between me and my wife
I've been asked to have my annual accounts to be audited (they had already been signed by my ICAEW accountant) as they were entitled 'unaudited'. Most of the conversations seem to be me trying to understand what it is they're asking for.. it's been very painful as they get themselves confused between company accounts and personal returns!
Ok, so even though you are a Contractor L&C have submitted this as a straight forward Ltd Company director application.....thats why Barclays are asking for company account and details of your drawings from the company........can be painful........a Contractor friendly lender would be happy with a copy of your current signed contract usually....I've been asked to have my annual accounts to be audited (they had already been signed by my ICAEW accountant) as they were entitled 'unaudited'. Most of the conversations seem to be me trying to understand what it is they're asking for.. it's been very painful as they get themselves confused between company accounts and personal returns!
Good luck!
Gassing Station | Finance | Top of Page | What's New | My Stuff