Mortgage based on Salary/Dividend

tp023

Applying for a joint mortgage. I have the larger salary based fully on PAYE however my wife owns 12.5% of her family's business and is paid approx £16k PAYE & average £9k dividends per year (over last 3 years). How do the mortgage company view this? Is it acceptable? Typically what kind of multiplier would they apply when deciding the amount to lend?

Thanks in advance.

tp023

Any thoughts?

Thanks

amnblog

Lenders can consider the paye and the dividend.

By the end of this month lenders will not longer be working on income multipliers, they will work on affordability calculations.

You should engage a mortgage broker to assist you.

amdowney

I'm in a similar boat, working for myself have got 2 years accounts sorted but am told I need PAYE/dividends figures now (awaiting report next week).

Between us we then earn £45kish a year and was told that would mean multiplying this by 5 would give us up to £220k to borrow perhaps.

With this new affordability system and us having no other commitments at all any idea how this figure could change?

ACG

To sit on the fence it could change up or down.

Self employed if your a ltd co, lenders may request SA302s and/or accounts. They will then base your lending capacity on their calculations taking into account your spending.

5.5x income is a ball park figure and i would say towards the top end. however it may change from lender to lender going forward.

Thrugelmir

tp023 wrote: »

12.5% of her family's business and is paid approx £16k PAYE & average £9k dividends per year (over last 3 years).

Minority shareholders have no say in the running of the business. Dividends are dependent upon profits earnt by the Company. So very much at an underwriters decision depending upon the circumstances of the application.

How much are you looking to borrow is perhaps the way to address the issue, not what you could be lent.