Why won't the banks lend to me?

dunstonh

Does anyone know which parts of the fiscal jargon that are company books the banks actually look at for earnings? Operating profit? Dividends? Turnover?

Turnover is disregarded as it means little in reality. You could operate in a high turnover, low profit industry.

For you they are looking at your declared income for HMRC purposes and the consistency and profitability of the business if you own a majority share.

ozzage

Do they not also look at dividends in this calculation? Or only PAYE income?

Radsteral

go for a brooker. i had same problem as you and felt like was begging.
refused by 11 banks, the last one with broker , fast track and went through.. there are risks, but going to the bank is like ''computer says no'' every time''

property.advert

Why not just set up a company and pay yourself whatever salary you need and show the payslips ?

Chinkle

This is the downside of setting up your company in the way you do.

The mortgage companies look at your salary - as this is your regular income. They treat dividend income like that of a salaried person getting bonuses - ie its not guaranteed.

The only way you will get the mortgage you want is by paying yourself more (and yes you'll be paying more tax on that).

ItMightBeUsefulOneDay

property.advert wrote: »

Why not just set up a company and pay yourself whatever salary you need and show the payslips ?

Since I own the company I could print out my payslips to show anything I want. But then that would also appear on my tax forms which means the useless bunch in Westminster would want "their" cut (to buy more duck houses and pay their cleaners with). No thanks, I'd rather keep more of the money that I earn.

My broker seems optimistic currently so I'll let you know in due course.

luckyfool

They would use the salary plus the dividends... and some lenders would gross up the dividends to include basic rate tax.

Depending on the industry you are contracting in there are one or two lenders that might consider using the gross value of your contract as well which tends to be much higher. This is typically easier if you are an IT Contractor.

Any

ItMightBeUsefulOneDay wrote: »

Since I own the company I could print out my payslips to show anything I want. But then that would also appear on my tax forms which means the useless bunch in Westminster would want "their" cut (to buy more duck houses and pay their cleaners with). No thanks, I'd rather keep more of the money that I earn.

My broker seems optimistic currently so I'll let you know in due course.

Yep, you want the best of both worlds...
Be separate from the company in a way of earnings for tax purposes and as one when you need to show high earnings...

Unfortunately it doesn't work like that.