Self employed mortgage question
Discussion
I'm an IT contractor working through my own Ltd company. I've got 3 years of personal and company tax accounts
For a mortgage, the mortgage company will no doubt want to see my personal tax accounts (and HMRC returns) as produced by my accountant. Will they also want to see my Ltd company accounts or is that irrelevant?
For a mortgage, the mortgage company will no doubt want to see my personal tax accounts (and HMRC returns) as produced by my accountant. Will they also want to see my Ltd company accounts or is that irrelevant?
"Technically" you're not self employed. You're employed by the company you own. I'm in the same boat. I applied for our mortgage giving the company I work for (mine) as my employer.
Once they have the company details, they can then ask for the accounts details if they want - they're in the public domain at a small cost.
Once they have the company details, they can then ask for the accounts details if they want - they're in the public domain at a small cost.
Edited by fatboy b on Tuesday 16th February 07:28
You own a limited company, you are NOT self-employed. Stop declaring yourself as such to anyone - insurance / mortgage / vicar, the works, and you'll find a lot of your bills come crashing down.
2-3yrs accounts is fairly normal, and if you go with a decent provider, they'll "understand" that your company may or may not have "shown" profit. They just want to see a decent through-flow of monies.
2-3yrs accounts is fairly normal, and if you go with a decent provider, they'll "understand" that your company may or may not have "shown" profit. They just want to see a decent through-flow of monies.
PistonReg said:
I'm an IT contractor working through my own Ltd company. I've got 3 years of personal and company tax accounts
For a mortgage, the mortgage company will no doubt want to see my personal tax accounts (and HMRC returns) as produced by my accountant. Will they also want to see my Ltd company accounts or is that irrelevant?
Great - thanks for the advice folks. I know I'm technically employe, but the mortgage broker I spoke to said for the purposes of a mortgage, the mortgage company would class me as self employed. I've now spoken to a second mortgage broker who seems a lot more competant and knowledgeable and I'm going to go with him. I'm looking for a 3.5 times income with a 25% deposit, but it's scarey to be told as long as I could get 25% deposit, quite a few companies will still lend 5 times income happily to someone whose company has made no profit for 14 months :-O Still, I guess they're banking on the 25% equity removing their risk.For a mortgage, the mortgage company will no doubt want to see my personal tax accounts (and HMRC returns) as produced by my accountant. Will they also want to see my Ltd company accounts or is that irrelevant?
As has already been mentioned, talk to a broker who understands IT contracting. Even in the current economic climate you can still get a mortgage where your current contract and day rate is sufficient to borrow against.
The trouble with company accounts is that, unless you have a very poor accountant, they're going to be running really lean for tax purposes and may not give a true impression of your actual earning (and hence borrowing) potential.
The trouble with company accounts is that, unless you have a very poor accountant, they're going to be running really lean for tax purposes and may not give a true impression of your actual earning (and hence borrowing) potential.
PistonReg said:
Great - thanks for the advice folks. I know I'm technically employe, but the mortgage broker I spoke to said for the purposes of a mortgage, the mortgage company would class me as self employed. I've now spoken to a second mortgage broker who seems a lot more competant and knowledgeable and I'm going to go with him. I'm looking for a 3.5 times income with a 25% deposit, but it's scarey to be told as long as I could get 25% deposit, quite a few companies will still lend 5 times income happily to someone whose company has made no profit for 14 months :-O Still, I guess they're banking on the 25% equity removing their risk.
Your broker is right. If you own more than 25% of the company then you are classed as self employed for the purposes of a mortgage. A LTV of 25% is probably a minimum for a decent rate, anything less and I think I would have struggled.
The other thing I have found is the more numbers the broker (and therefore mortgage company) sees, the better.
LivingTheDream said:
As already said - speak to Contractor Money - They've got me fantastic deals (twice).
But also look around at deals yourself and then point them out- I once dealt with them, gave my requirements and they came back with recommendation, In the meantime had looked around and found the one I wanted which turned out better than hers and so told her to look into that one for meso do your own research too.
RedLeicester said:
You own a limited company, you are NOT self-employed. Stop declaring yourself as such to anyone - insurance / mortgage / vicar, the works, and you'll find a lot of your bills come crashing down.
2-3yrs accounts is fairly normal, and if you go with a decent provider, they'll "understand" that your company may or may not have "shown" profit. They just want to see a decent through-flow of monies.
As above. It's not a big deal nowadays. Every man and his dog runs his own company.2-3yrs accounts is fairly normal, and if you go with a decent provider, they'll "understand" that your company may or may not have "shown" profit. They just want to see a decent through-flow of monies.
pp
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