IT Contractor/Ltd company mortgage question

Annisele

Chris_Wright wrote: »

My company net profit (averaged over a few years) is about 2x my own personal income from same company (the rest is left in the company). I want to borrow 5 or 6 times this net profit.

Sorry, but I'm with Kingstreet. I think 6 times net profit - or apparently about 12 times your actual declared personal income - is too much, no matter how many of your income streams are taken into account.

GMS

Chris_Wright wrote: »

I've spoken to several. Either they will quote based on my salary and divs (which is not very much) or my day rate. No one will quote based on all the income streams into my company.

There are lots of brokers dealing with IT contractors, but not ones who 'IT contract' and have additional streams. These streams are just ignored, which is holding back my lending power.

Are these income streams all going through the company?

Why not post figures for income(s), required borrowings and deposit.

You have mentioned average figures in your posts. Is the latest year higher than previous?

Without figures you will not get a proper answer as to whether it may be possible but at 6 x income you are aiming too high.

Post some figures and see what can be done.

Chris_Wright_3

I don't think I want 6x actually, sorry posting late at night was confusing me! Let me explain.

(NB: I have a deposit of £150k, maybe as much as £175k)

As an IT contractor my day rate is £500. There are specialist IT contractor mortgage brokers that say they can get me £600k (though have not yet done a DIP to prove this). This is based on

Day rate x 48 weeks of the year x multiplyer of 5

But as I have said this does't take into account my other contracts. These vary but my accounts show between 30-50k a year revenue.

I can get a mortgage of £625k based on my LTD company accounts (showing avg revenue over 2 years of £125k a year).

My issue is if I go down the contractor mortgage route I cannot take into account my other revenue streams.

Wh05apk

................but how much do you actually want?

Chris_Wright_3

Wh05apk wrote: »

................but how much do you actually want?

850k, or there abouts.

GMS

How much deposit do you have?

Even if you could raise enough, which I seriously doubt then you may find the Loan to Value restricted to 80%.

Wh05apk

Most lenders now will consider contractors, you may find they will also accept a second income provided they can see it is sustainable - i.e you are not having to work 100 hours a week.

You need a good broker for this, who understands contractors and self employed accounts, but may just be do-able based on your figures.

Chris_Wright_3

Wh05apk wrote: »

Most lenders now will consider contractors, you may find they will also accept a second income provided they can see it is sustainable - i.e you are not having to work 100 hours a week.

You need a good broker for this, who understands contractors and self employed accounts, but may just be do-able based on your figures.

Great. Any idea how to find such a broker? The ones I've found, who deal with contractors, just can't understand secondary income.

Wh05apk

Forget about the "contractor specialists" it is not a big thing, most brokers should be able to help with this, word of mouth/personal recommendation is best, for a potentially complex case like this, you should see someone face to face, they will need to then spend some time calling lenders and chatting the case through.

Where about are you located, some-one may be able to help.

Chris_Wright_3

Wh05apk wrote: »

Forget about the "contractor specialists" it is not a big thing, most brokers should be able to help with this, word of mouth/personal recommendation is best, for a potentially complex case like this, you should see someone face to face, they will need to then spend some time calling lenders and chatting the case through.

Where about are you located, some-one may be able to help.

London.

The thing is 'contractor' mortgage brokers take my day rate (which is pretax). Everyone else wants to treat me as a company, and consider my profile (which is obv post tax). So you say ignore, but they are the only ones who seem to offer this option.

But I want them to consider my day rate.. plus my extra contracts! But I think it is impossible!