Ltd Company Shareholder, PAYE & Mortgage!

Firefly1710

Hi, after some advice really.

Myself and partner are 49/51% shareholders in a Ltd Company. Incorporated Nov 2012 - movement from a sole tradership.

Profit is mainly offset by expenses claims, labour costs, wages etc. Small profit end of 1st 6 months.

So the issue comes in that we really would like to move from renting to mortgage. Due to bad credit on my part the mortgage would be in my partners name only.

The issue we have is that we have worked extracting profit from the company on the advice of our (now ex) accountant without having any regard for future mortgage suitability. We have insufficient accounts anyway but the next would unlikely be of help.

Now I am fully aware we can't have it both ways - i.e. reduce tax and expect to hit high income multiples for mortgage purposes and wondered what the feasibility of changing my partners share holding (to less that 20% say) and reduce my wage to £0 or thereabouts and pay what we would have paid me completely to my husband - give up any dividends, expenses claims etc and include these in his monthly pay for forseeable.

On this basis it seems we would meet the criteria for a mortgage based on PAYE with some though not all banks. I note some, in particular that we bank with consider you self employed if you are PAYE for a family business regardless of shareholding status....Any advise please?

I should point out that we are currently renting, paying all the bills etc and just about to settle a large car purchase agreement freeing up more spare income monthly so there is no worry about whether we would be able to afford a mortgage - just figuring our how to meet criteria without having to start again from scratch for the next 2-3 years.:(.....

Conrad

Firefly1710 wrote: »

On this basis it seems we would meet the criteria for a mortgage based on PAYE with some though not all banks. I note some, in particular that we bank with consider you self employed if you are PAYE for a family business regardless of shareholding status....Any advise please?

.....

What LTV are you planning on Firefly?

Firefly1710

Thanks for your reply. As everyone seems to use income multiples before affordability as a guide we would be looking to use the new buy scheme (we are a family of 5 so house size is an issue!) - so mortgage at 75%, we would obviously put down 5% (perhaps higher dependant on time we have to further save) and the government the rest.

We would then be looking to pay off the extra government lending whilst interest free.

kingstreet

When you say NewBuy, do you mean Help To Buy - Equity Loan, to purchase a newbuild?

Firefly1710

Yes, sorry that's correct.