Mortgage Help - Dayjob PAYE & evening contracting Dividend.

[Bullet-Proof_Biscuit]

Hello, first of all apologies, these topic keywords throw up lots of results, but as usual my particular situation does not seem to be covered..

I've got my eye on my first buy, a 2-up 2-down 2 bed terrace for about 230k in the south of England, it's 1870s red brick, ripe for mods including loft conversion, modernisation, and a PH build thread or two..

I'll have about £15K deposit, and will probably get a 5% first time buyer mortgage. (Presently assume selling the 997 is out of the question)

My situation is 45k PAYE basic, maybe £1-2k Xmas bonus, as a project manager in construction.

I also do evening and weekend work, also PM in construction, and this nets me 5/800 a week into my limited co, so my take home is £3/500 per week dividend,
I take no PAYE from my company at present, as I wanted to ensure no turbo tax from dual PAYE.

My question is this; how can I make this additional income improve my lending affordability? The side income fluctuates therefore with online calculators it not count as 'regular' income? I could dividend myself the exact same amount if that helps?

the income has been steady for 3 months and it will have been about 6 months when it's time to buy (property owned by a friend emigrating so time scale is fine).

The mortgage people basically only want to give me just under 200k and I need just over, surely I can be economical with my truth to meet the affordability?

And yes I know my affordability is fine, I typically save £500-1000 for my various exploits (race cars).

I just need to figure out the best way to structure my dividend income to be considered as additional to my PAYE,

Thanks in advance, I'm looking forward to a proper (house) project!

HH

[MOBB]

Sarnie is your man for this

[Fonzey]

Most of my income is dividend from a Limited Co and most mortgage lenders/brokers wouldn't touch me without 2 years of accounts being available, the highstreet banks wanting 3 years.

I eventually found a specialist broker who could do it on a single year of accounts (as I'd only been a director for 12months at that time) but it needed heavily reinforcing with details about my previous PAYE situation to make sure I'd not taken a big dip/rise in lifestyle.

With just 6 months and (I guess) no accounts you may struggle to leverage your LTD co income but there are specialist brokers out there that should be able to advise properly, I understand Sarnie is a good place to start

[Bullet-Proof_Biscuit]

Thanks for replies already! just to add I've been a director of the Ltd for 8 months now, previously full time contracting through it on a reasonable day rate, so I'll have 12 months of directorship and company revenue of about 50k by then.

Funny situation as I need a PAYE mortgage broker and a contract mortgage broker at the same time...

Look forward to a Sarnie..

Beers!

Edited by Bullet-Proof_Biscuit on Tuesday 5th November 14:43

[Sarnie]

"the income has been steady for 3 months and it will have been about 6 months when it's time to buy (property owned by a friend emigrating so time scale is fine)."

If you've only been carrying out this self-employed work for three months then you won't be able to use it until you have two years worth of HRMC returns and documentation......one or two may consider a single years HMRC return but this is few and far between.

Depending on your circumstances as a whole, with the right lender, there shouldn't be any reason why you can't get over £200k with a £45k income......

Edited by Sarnie on Tuesday 5th November 14:49

[Sarnie]

MOBB said:

Sarnie is your man for this

Thanks Mark

[n3il123]

Can't you save the dividends to create a bigger deposit so you have a smaller mortgage requirement?

[Bullet-Proof_Biscuit]

n3il123 said:

Can't you save the dividends to create a bigger deposit so you have a smaller mortgage requirement?

I plan to live off the dividend and save all paye income, the problem is I'd like to 'swindle' dividend income to contribute to affordability, should have 12 months of Ltd books by then so I guess I'll have to find a contractor friendly mortgage broker,

[Caddyshack]

Bullet-Proof_Biscuit said:

n3il123 said:

Can't you save the dividends to create a bigger deposit so you have a smaller mortgage requirement?

I plan to live off the dividend and save all paye income, the problem is I'd like to 'swindle' dividend income to contribute to affordability, should have 12 months of Ltd books by then so I guess I'll have to find a contractor friendly mortgage broker,

What Sarnie said is correct. A couple of lenders will do 1 yrs limited if submitted and a full 12 months but with just 5% deposit the underwriter will want to say no to that as it is not worth their mandate to risk it.

"Contractor friendly" is just a marketing hook, good brokers have the whole market to use.

[Sarnie]

Caddyshack said:

"Contractor friendly" is just a marketing hook, good brokers have the whole market to use.

^^This.

It's simply a license for "Contractor Friendly Brokers" to charge you excessive fees, when the reality is that they don't have access to anything I don't, or any other broker.............all they "know" is who will lend to Day Rate Contractors........nothing too taxing for a competent Broker.......

[Fonzey]

In fairness I couldn't find a broker that would touch me until I found one "specialising" in recently established ltd company directors. Yes I probably paid a premium but it got me a mortgage!

Needed 15% deposit mind.

[Sarnie]

Fonzey said:

In fairness I couldn't find a broker that would touch me until I found one "specialising" in recently established ltd company directors. Yes I probably paid a premium but it got me a mortgage!

Needed 15% deposit mind.

The initial brokers just weren't very good at their job