Dividends / Re-Mortgaging

jibwauly

Hi

Im looking for some advice or if someone has been through a similar experience.

I am about to become a shareholder (as of 1st April) in my employers company (only a small share of 1%) and paid a small salary and the rest will be paid in dividends.

Would this effect a remortgage when removing an ex partner and adding a new one to the mortgage? Im not sure of the implications this might have - or if I am making a big mistake and should just remain salaried on a higher pay! As its a remortgage with my current provider Intelligent Finance Im wondering if they will need to recheck me or just my partner?!

Thanks

Thrugelmir

Dividends are not a source of guaranteed income. They are dependent on the financial performance of the Company. So you well struggle to have this income accepted.

holly_hobby

There are many lenders that will use dividends & salary drawdown - historical of course, and verified by SA302s, accounts, accountants letter/projection -you'd be looking at a min of 12 mth receipt.

Given that your situ doesn't change until 1 April, and with only a 1% share you are not a controlling director, and as you are yet to benefit from any divs, and if you wanted to apply in the next 12 mths for a mge, I wouldn't complicate matters, and at least for the moment have your "share" refleceted as a higher salary (if this is possible). Which of course can easily be supported for any mge app with simple payslips/bank statements (generally 3 mths).

Hope this helps.

Holly

mr-bob_2

My bank would accept my dividends even though I only had like 6 months record of them being paid.

They could clearly see the deposit was from my savings, that I've been employed by said company for 5 years, the company also used the same bank and they could see it was profitable.

Mortgage brokers said I'd be unlikely to get a mortgage elsewhere though.

So go see your bank first and explain the situation to them - they'll see tell you yay or nay.

ACG

Would you need the 1% worth of dividends to meet affordability?
Your income alone may still be enough to get you the mortgage, in which case the dividends (in terms of the mortgage) wouldnt make any real difference.