First Time Buyer Advice 30 November 2013 at 7:52PM in Mortgages & endowments 3 replies 588 views

Pingwhite

I am a first time buyer with a 20% deposit and interested in a mortgage of around £170,000, I have no debts.

I have two incomes one which is PAYE £26,000 for a company that I have been employed by for the last 6 years and the other is through dividends from a company that I own.

The last tax year the dividend payments from my company worked out to £27,000 but this tax year should be £60,000.

The problem is that I started the company in August 2012 so because I have been receiving dividends for under two years Barclays is unwilling to accept this as an income.

They told me they could only consider borrowing me 4.5 times my employed salary 4.5 x £26,000 = £117,000

Is this common practise with banks?

Would it be worth contacting another bank? I was think of speaking to Natwest as my business account is with them.

ACG

Dealing with a bank because you have a relationship with them is rarely the best option - there is no such thing as a relationship with a bank anymore. They have their criteria and you either fit it or you dont.

You will probably be best speaking to a broker as there are not many lenders who will accept one years accounts - there are a couple but theyre not really high street lenders.

Pingwhite

Would these other lenders have higher interest rates?

Do you think a larger deposit would help in my situation?

ACG

They are unlikely to be top of any best buy tables but at the same time your not going to be looking at anything above 5%.
If you can get a 25% deposit then something under 4% would be achievable.