Will we be able to get a mortgage?

Dummie_2

Hello There

I've posted this question on another forum but I think maybe it's better suited to this one.

Here goes.

DH and I own the least to a fish & chip shop. We are in the process of selling which if all goes smoothly should be finalised within 6-8weeks. Once we've sold the shop and pay off our debts (we will then be TOTALLY debt free) we will have 50-60,000 left.

We would like to buy a property but am unsure whether we will be able to get a mortgage.

DH is joint director of a trading company that has been up and running for 1yr. At the moment he is not drawing a salary as everything is being invested back in the company.

After we have sold the shop we will both draw the minimum wage (or DH may draw 2x the minimum wage and I will draw the minimum wage). We will then take dividend payments once or twice a year.

Before we know the amount we can take as dividend payments, we will be entitled to just over 6,000 in tax credits. Any dividend payments will only be drawn if it's at least 6,000.

This means that our joint income will be either 15,776 (both draw min wage) or 20,664 (DH draw 2x and I draw 1x min wage). These figures include the tax credits we will be receiving.

Divided into 12mths this leaves us with (a) 1,314.66 or (b) 1,722. We figured that with both options we should be able to afford to pay 600-700 in monthly mortgage payments.

I know most mortgage lenders will only lend around 3.5x (or now Abbey 5x) your income. If this was the case, the money loaned to us will not get us very far!!

How do we go about this?

Thanks in advance for your time/help/advice (even if it is a "get real" kick up the bottom!):rotfl:

MortgageMamma

So basically, you are both going to be employees of your own company, whic means if you and hubby have more than 30% shares each the majority of lenders would class you as self employed. As you will not have 2/3 years company accounts it is quite likely that you will need a self certification mortgage, but again as you have not been trading very long this will narrow down your selection of lenders. As well as your incomes there are lenders that will also accept tax credits as income, so this could work in your favour. There's not very much I can tell you apart from this, except to ensure you have at least a 10-15% deposit put by for the property you intend to buy. If you have any adverse credit, e.g. missed payments, ccjs,defaults, with regard to your debts over the past six years this will also impact on your mortgage.

Your best option of course is to speak with an experienced whole of market mortgage broker when the time comes for you to buy.

HTH

MM

Dummie_2

I called London & Country today. I was told that it's unlikely we'll be able to get a mortgage and even if we do manage to get one it'll only be for about 80,000.

They also said that I should wait until I know how much dividends we will be getting so it seems nothing can be done until a few years time maybe.

Mortgage Mamma - FYI my hubby owns 50% of the company. He has a business partner who owns the other 50%. Our credit history is excellent (the money we owe belongs to my dad) and with the 50-60,000 we'll have at least 25% to put down.

UK007BullDog

You can get a mortgage. There are lenders out there willing to do a self cert without asking for your income. However are you prepared to go with an interest rate of 6.5% - 8.99% ? Depending on lender, income, credit status etc.

Talk to a Whole of Market Broker like MortgageMamma advised.