How much will I be able to get?

chriz1000

Before I ring around can anyone estimate how much of a mortgage I will be able to get?

I’m currently earning £2000 a month after tax (almost all from a company dividends). I’m also earning between £300-£600 a month on top of this through various web development projects, so a total income of £2300-£2600 after tax.
I don’t have any debt, but all my savings are reinvested into my business. The business however has a very healthy positive balance, but I don’t want to use this money as I’m currently going through legals on a second venue which will require most of this money.

Cheers
Chris

silvercar

I have an income that is made up mainly of dividends. I saw a broker who had a table of equivalent gross salaries for dividend income ie the annual PAYE salary that would give you the same net income as you gain from your dividends. This helped in securing a standard mortgage.

The retained profits of your business (provided they are shown as such on your accounts) can be used as business assets figure to include on the mortgage application - you don't use this money you are just quoting it to prove your case. You will need at least two years of accounts.

chriz1000

Ok cheers silvercar, I’ll get in touch with a broker. Looks like I will have to wait until September, the company bank account was opened in June 2004, but didn’t begin trading until September 2004.
I will see what a broker says.

silvercar

It could take a lot longer than 2 years trading to have 2 years accounts. I won't have my 2005 calander year accounts before July!

I would see a broker now, you may find you only need one year or that a self-cert mortgage will be available - where you are stating your true income without having the paperwork to prove it.

MortgageMamma

Hi Chris

How much do you want to borrow and what sort of a deposit have you got? whats your credit rating like?

chriz1000

Cheers silvercar, I will give a broker a call and ask what the best way forwards is.

MortgageMamma, I’ll explain the full situation so you can get a better picture:
I currently live with my parents, but I’m just starting up a second venue on a Leisure Park in-between Bath and Bristol.
I have two choices, rent for 6 months to a year then buy, or buy straight away. Obviously I would prefer to buy right away as I’m not losing any money through renting.
I currently have no debt or savings, my company currently has £65,000 in the bank, but most of this along with a bank loan is going towards the new centre.
I do however have a car which is worth around £18,000 if I sold it privately.
I will be moving with my girlfriend, we would preferably like a house/flat with a garage because of our cars. I’m not really sure how much I want to borrow, as I haven’t really started looking at any properties. I’m guessing properties will be between £120,000-£150,000 in this area?

Edit - Forgot to say about my credit rating, I’ve successfully been granted large insecure loans in the past for my businesses, this time for more. They have always been paid off early.
I have a potential of £70,000 borrowing on credit cards, I know this will probably go against me as it’s a lot of potential borrowing, so planning on asking the card lenders to reduce the limits. I’m also 23, not sure if age comes into it when lenders make there decision but have a feeling it might.