Self Employed/ Company Director Mortgage Options?

Okydoky25

My Husband started up in Business last year he has a 50% share of this company and then has his own ltd company for which I own half.

The company he has a 50% share of started only in Sept 12 however has a large predicted turnover this year of £2 million with 2 6 year contracts already successfully running so this should increase yearly.

From this company he pulls a salary through our company this at present is only £20k per year.

I'm not sure how all this works tbh this is just how it's explained in simple terms to me!

Anyway my question is how is the best way to get a mortgage. I'm under the impression we will need to wait until we have 2/3 years accounts. Is this correct? Also will the amount we can borrow be focused on what we take as a salary or will Turnover be taken into account?

I'm being told we can't take more than we need to live on as it needs to be put into the business at least for now.

Wh05apk

Most lenders will need 2 years trading history there are some who will accept one year.

Most will use salary and dividends, again some will accept retained profits.

This sounds like a broker case, as the right lender will need to be identified, otherwise you will just be applying at random, and getting turned down

amnblog

Wh05apk is 100% on this.

You must use a broker, and one that deals with the self-employed every day.

Thrugelmir

Okydoky25 wrote: »

I'm being told we can't take more than we need to live on as it needs to be put into the business at least for now.

There's an old saying. Turnover is vanity, Profit is sanity , but Cash is king.

Until the business generates cash, then the amount you can withdraw in any form of remuneration is limited.

So you may need to wait a while longer before buying that dream house.

Okydoky25

Do you need a larger deposit when it's a S/E mortgage?

Will this deposit need to be shown to come from salary or could it come as a lump sum Dividends payment if that's even possible?

Okydoky25

Thrugelmir wrote: »

So you may need to wait a while longer before buying that dream house.

I'm waiting...just a little impatiently maybe..

amnblog

Larger deposit, not necessarily.

Deposit from dividends can make lenders more nervous.

ACG

If you only have 1 years accounts i would say your going to be looking at a minimum 25% deposit.

3 years accounts you would get away with 10%.

Thrugelmir

Okydoky25 wrote: »

I'm waiting...just a little impatiently maybe..

Cashflow is a more common reason for the downfall of a business than profitability. Profitability being a number on a piece of paper not cash in the bank.

From this company he pulls a salary through our company this at present is only £20k per year.

This suggests the business is still in its infancy.