Self employed mortgage advice

[LarJammer]

I have spoken to my accountant who suggests I take the minimum wage this year with the balance paid in dividends. But my understanding is that a mortgage lender will not take dividends into account. Can anyone clarify the dividend situation for me?

[Magic919]

They normally can take them into account. Try Sarnie on here for proper advice.

[Eric Mc]

Are you actually "Self Employed" or the director in a small limited company?

[essayer]

Do you have 2-3 years accounts behind you, showing growth or steady figures?

[AMST09]

Didn't cause a problem for me but have a chat with a mortgage advisor

Also to the comment about being properly "self employed" as soon as they found out I had more than a 25% share in the business I went from being employed to self employed

[mickytruelove]

Recently got a mortgage with the Cumberland and they used dividend payments to come to a total income. The advisor had to send all the accounts to someone else to get an answer but didnt seem a problem. I am the only director with 100% share if that makes a difference.

[Jockman]

AMST09 said:

Didn't cause a problem for me but have a chat with a mortgage advisor

Also to the comment about being properly "self employed" as soon as they found out I had more than a 25% share in the business I went from being employed to self employed

My experience too.

If Dividends are being paid in lieu of salary it tends not to be a problem.

They will take an average of the last 3 years total income then apply a multiplier.

Sarnie's a good shout too if you need a broker's input.

[48k]

LarJammer said:

I have spoken to my accountant who suggests I take the minimum wage this year with the balance paid in dividends. But my understanding is that a mortgage lender will not take dividends into account. Can anyone clarify the dividend situation for me?

I've had several mortgages/remortgages over the years (and just completing on another one on Monday) and they have all taken dividends in to account.

Make sure you have to hand up to date company accounts going back three years.

You will probably also be asked for SA302's for three years but since October last year the lender has been able to obtain these directly from HMRC online. It speeds things up if your lender realises this

Eric Mc said:

Are you actually "Self Employed" or the director in a small limited company?

This means exactly the same thing as far as mortgage lenders are concerned.

[Eric Mc]

Yes, mortgage lenders aren't bothered about the legal differences between a proper self employed individual and an individual operating through a limited company..

I was just asking which way the OP was actually operating.

[FredClogs]

There are plenty of ways to get a mortgage as self employed / contractor. 3 years accounts helps.

A broker will be able to help, there's charges involved obviously. Last time I remortgaged they just wanted proof of my hourly rate, so my latest contract was all they needed. If you want to try to cut the broker out try The Clydesdale, that's who I'm with, but a good broker will be worth the outlay most likely.

[LarJammer]

Thanks for the info. Just to clarify i am a director, this is the first year of trading but, as an existing customer, my mortgage company have said 1 years accounts will suffice.