Self Employed, first time buyer. Need advice please.

jamieuk2

I am self employed in the TV industry. I actually employ myself through my Ltd company. Does this mean I am employed or self employed in the eyes of those that might offer me a mortgage?

I pay myself a low monthly wage whilst getting the rest of my income by drawing dividends from my business account. Will a mortgage lender take these dividends into account where my total income is concerned?

Lastly, has anybody had any recent experience with lenders offering mortgages to 'self-employed' married people with a 10% deposit1?

Thanks
Jamie

Mrs_Arkwright

We are about to sell and buy, Mr A is self employed, and has been for only 8 months so we have no accounting history to speak of. Our financial advisor has found us a self-certification mortgage with The Mortgage Business, we have not had to provide any proof of income whatsoever, all we had to tell them was how much we could afford each month, and how much deposit we have (about 30%). Our deal is fixed rate for 2 years at 4.69%.

I would find an advisor and have a chat, I'm sure there would be a deal to suit you somewhere - when the mortgage guy came to see us, he bought his laptop and searched his database thingy and found over 2500 different offers for self-certs!

MortgageMamma

Hello Jamie

Much of what you ask is dependent upon the individual lender but,

1. If you have more than a 30-50% shareholding in the company you are deemed to be self employed.

2. Not all lenders will consider dividends as income as they are unreliable

3.Ihave experience, being a broker of self employed mortgages. Much of which type of mortgage is best for you is dependent upon the following factors

how many years accounts you have got
how your income is built up
the amount of savings you have
your wife's income and employment status

etc etc. If you have accounts it would be worthwhile considering not many lenders will lend on declining profit. If you don't have accounts you will need a self certification mortgage, which is where you sign a declaration stating your earnings as you are unable to/will have difficulty in proving them.

If you post some more details, such as earnings, age, amount of deposit and how much you wish to borrow, together with an indication of your credit rating (late payments, ccjs, defaults etc - need to know if there are any) I can at least let you know if your aims are achievable..

MM

jamieuk2

Thanks for the replies.

MM,

I have 3 years accounts. First 2 years as a Soletrader and most recently as as a Ltd company.

Income per annum 03/04 = 19k
Income per annum 04/05 = 36k
Income per annum 05/06 = 32k

I pay myself 660 GBP per month (after tax), the remainder of the money is made up in expenses claims and dividends.

I am married with one child. Neither my wife or I have a bad credit rating. We have no debts.

My wife is not currently working but intends to go back part time on an annual wage of roughly 11k per year (before we take out a mortgage)

We have 10k in the bank. Trying to make it up to a 10% deposit. Father in law will give a further 8k interest free, to be paid back over 3 years.

We are looking to buy a house in the region of 160k - 180k.

Any help would be appreciated.

Thanks

lostfarmer

Have you got an Accountant? We have recently moved us and our business. We're a partnership and had been going for 2 1/2 years, had year end accounts prepared by our accountants and this was enough to satisfy our lender (HSBC). We both work solely for our partnership and pay ourselves in drawings but this didn't seem to be a problem.

Good Luck!

jamieuk2

Yes, I have an accountant who has done some good work for me.

jamieuk2

So Mortgage Mamma, can you offer any advice please?

Thanks
J

MortgageMamma

Hi Jamie

You shouldn't have any problem getting a mortgage is my advice, but you would be best seeking such a mortgage through a whole of market mortgage broker. A friend of mine specialises in arranging mortgages for people who work in the media/arts - having originally come from that background - I think he would be a good option for you to speak to as he is aware of the pitfalls of your industry and the impact it can have on earnings etc. He also knows which lenders are best to approach

Would you like me to PM you his details?

Jimbo333_2

jamieuk2 wrote:

I am self employed in the TV industry. I actually employ myself through my Ltd company. Does this mean I am employed or self employed in the eyes of those that might offer me a mortgage?

I pay myself a low monthly wage whilst getting the rest of my income by drawing dividends from my business account. Will a mortgage lender take these dividends into account where my total income is concerned?

Lastly, has anybody had any recent experience with lenders offering mortgages to 'self-employed' married people with a 10% deposit1?

Thanks
Jamie

You are in EXACTLY the same position I was in 2 months ago. Actually no, you're in a better position beacuse my record keeping (i.e accounts) is dire.

Someone on here suggested https://www.ContractorFinancials.com and they advised a Halifax Mortgage. It was very easy. Worth a try.

MortgageMamma

Hi Jamie

Please do not apply direct to Halifax, they might not be the right lender for your individual circumstances.
Regards

Lisa

Jimbo333_2

MortgageMamma wrote:

Hi Jamie

Please do not apply direct to Halifax, they might not be the right lender for your individual circumstances.
Regards

Lisa

Sorry, didn't make myself clear, I meant Contractor Financials (or any other specialist in your/our situation) was worth a try, not Halifax direct.

Thanks for clarifying MM