Family Employment - Getting a Mortgage?

stevie22

Hi,

This is all very much in the future but here goes. I am currently in the process of going self employed and setting up my own buisness. I am married and my plan is to employ my husband to keep it in the family.

Now my question is would it be possible for my husband to get a mortgage in the future if employed by myself? I believe the standard requirement is 6 months payslips.

Thanks,

L x

GMS

If employed by a family business there would most likely be a request for confirmation from the accountant of the employment. Dont be surprised if 6 months bank statements are requested too

stevie22

We intend to do our own accounts would this cause a problem?

Thanks for the reply.

Wh05apk

If you are "currently in the process of going self employed and setting up my own buisness" then I don't think you would stand a chance of getting a mortgage until you have some accounts, even though you will be employing your husband, lenders will treat it as a family business and want accounts.

Sorry but best to get your mortgage in place before changing everything, although then you have to consider long term affordability.

stevie22

As I say this is longterm thinking.

How many months/years accounts do you think they would want to see? The standard two years for self employed people?

kingstreet

I agree with the others.

Employing your partner would be an "excellent" way of circumventing the requirement for accounts if lenders simply accept payslips alone.

You should expect to be asked for two (to three) years accounts, plus even an accountant's projection when you apply for a mortgage, with a similar requirement if your husband was to apply alone.

If you don't employ an accountant, you'll be expected to obtain confirmation of income from HMRC.

kingstreet

... and don't forget to register as self-employed with HMRC within the first few months. If you don't, you get fined!

WellKnownSid

stevie22 wrote: »

As I say this is longterm thinking.

How many months/years accounts do you think they would want to see? The standard two years for self employed people?

As soon as they see it's a family firm, by virtue of you owning more than x% of the business, you won't get away with a few payslips.

When I set up our business 8 years ago, I was told it wouldn't be a problem getting a mortgage, all you had to do was "self certify"... and basically get whatever mortgage you wanted... Those were the days :rotfl:

I was therefore expecting a nightmare getting a post-credit-crunch mortgage at the back end of 2010, but apart from paperwork delays, postal strikes, weather, and underwriter slowness the bank only needed two years of accounts with a covering letter from my accountant.

It was actually quite painless - just try not to be too clever on the tax front (some people do try to hide their "earnings" which then makes it hard to justify a mortgage in the first place!)

stevie22

A bleated thanks to all the replies.

We made it all official in May and decided to go self employed as a partnership and just wait until we have two years accounts and a suitable deposit.