Self certification mortgage

[chonok]

I am looking to buy a piece of land to carry out a self build project.

I know I can easily afford the monthly repayments for the value of the land on top of my existing mortgage, but unfortunately as our mortgage is already about 4 x our income, I am struggling to get it.

The main problem being that I pay myself a low wage from our limited company.

I think the only way that I will get it is self certification - are these still offered by any of the high street banks. I can't seem to find any?

I have enough savings for about a 30% deposit.

Thanks

[Sarnie]

Self-cert mortgage dissappeared about 6 years ago............

Do you pay yourself dividends as well as a low salary?

[chonok]

I have never paid myself a dividend in 6 years of trading!

I know i probably should do though.

[Sarnie]

chonok said:

I have never paid myself a dividend in 6 years of trading!

I know i probably should do though.

Ok, if you take the amount you want to borrow and divide it by five, if that number is less than what you pay yourself annually then it can be done.

If it's more then it can't, to put it simply.

[Salterns]

I'm not sure you can get a mortgage for land?

[chonok]

Sarnie said:

Ok, if you take the amount you want to borrow and divide it by five, if that number is less than what you pay yourself annually then it can be done.

If it's more then it can't, to put it simply.

It is less than 5 x the amount I pay myself. Trouble is I have a mortgage on the house I live in that takes it over...

Looks like it cam't be done then, unless I beg, steal, or borrow.

What if I suddenly give myself a pay rise this month (say double my normal pay?) How long would I normally have to do this for before the banks will class it as my 'income'?

[Sarnie]

chonok said:

It is less than 5 x the amount I pay myself. Trouble is I have a mortgage on the house I live in that takes it over...

Looks like it cam't be done then, unless I beg, steal, or borrow.

What if I suddenly give myself a pay rise this month (say double my normal pay?) How long would I normally have to do this for before the banks will class it as my 'income'?

Two years.

A lender will ask you for two years income figure if you are self employed. A couple of lenders may take one and a projection other lenders might want three years figures.

[chonok]

I've just contacted freedom finance about this...

http://www.barclays.co.uk/Yourloanoptions/Personal...


Maybe another option

[Sarnie]

chonok said:

I've just contacted freedom finance about this...

http://www.barclays.co.uk/Yourloanoptions/Personal...


Maybe another option

From the link;

"You're looking to consolidate your debts and improve your home"

You're not doing that are you?

[Sharted]

Alternatively:

Sell your house and buy a caravan and live on site while you build.

bet that'll encourage you to speed the build up.

[WEHGuy]

There is some mortgage companies out there that will take your company profit as your income if you own a high % of the company. I am doing the same at the moment. I don't know about land though.

[chonok]

Sharted said:

Alternatively:

Sell your house and buy a caravan and live on site while you build.

bet that'll encourage you to speed the build up.

Happily do that. That is not the issue. The issue is selling my house before the deadline for the tender in February.

[red_slr]

WEHGuy said:

There is some mortgage companies out there that will take your company profit as your income if you own a high % of the company. I am doing the same at the moment. I don't know about land though.

Which bank OOI?

[WEHGuy]

red_slr said:

WEHGuy said:

There is some mortgage companies out there that will take your company profit as your income if you own a high % of the company. I am doing the same at the moment. I don't know about land though.

Which bank OOI?

Give these guys a call

http://www.mov8financial.com/

Ask for Robin Purdie.

[westberks]

Some lenders accept trading profit of a ltd company rather than salary and dividends, but they aren't self cert, just take a different view of what they define as income. Not many lenders do self build and they tend to be quite strict in what they will accept, so might be an issue for the land.

On another point, does it already have planning permission as that is the clincher for mortgages on land. No pp, no chance.

[michael gould]

I had the same problem....I took an income that was relatively low in the form of dividend split between my wife and myself but the company is making 6 figure annual retained profits. The building society took the company profit into account as we own 100% of the company

[Sharted]

chonok said:

Sharted said:

Alternatively:

Sell your house and buy a caravan and live on site while you build.

bet that'll encourage you to speed the build up.

Happily do that. That is not the issue. The issue is selling my house before the deadline for the tender in February.

Maybe rent out your existing, not sure if 'let to buy' is still available?

[Ossiantoad]

michael gould said:

I had the same problem....I took an income that was relatively low in the form of dividend split between my wife and myself but the company is making 6 figure annual retained profits. The building society took the company profit into account as we own 100% of the company

So how did that work? Did they just look at the profit and treat it in same way as they would a salary?

How many years figures did they want to see?

Do you think this would work in circumstances where I own 50% of a business?

[FredClogs]

chonok said:

I have never paid myself a dividend in 6 years of trading!

I know i probably should do though.

So you you say you can afford this second mortgage, but you take a low salary and no dividends, so there is either a mountain of money retained in your company or you simply don't have the income necessary to service two mortgages (in their opinion).

[michael gould]

Ossiantoad said:

michael gould said:

I had the same problem....I took an income that was relatively low in the form of dividend split between my wife and myself but the company is making 6 figure annual retained profits. The building society took the company profit into account as we own 100% of the company

So how did that work? Did they just look at the profit and treat it in same way as they would a salary?

How many years figures did they want to see?

Do you think this would work in circumstances where I own 50% of a business?

I had to submit SA302 for 3 years and 2 years company accounts .....The company has been going since 1988 ....im sure a 50% share holding would be taken into account even though it's considered a minority shareholding