Dividends as an earning for mortgages?

AnnaLMLH

Hi
I own part of a business, but I opt to be paid any money via divdend (obviously have tax taken off them too)
can these be used as earnings towards a mortgage application and if so what proof do i need
thanks so much trying to get everything in order to apply in september

laura_louise

I own a Ltd company and am just going through the mortgage process. My dividends are being taken as income, i've been asked to provide SA302 forms from HMRC which summarise income and show your dividends as well as any earned income. In my case, my dividends make up around 75% of my income. Haven't been given my offer yet as awaiting one more piece of paperwork but the building society say all is looking good and it seems we are very close to offer.

As far as paperwork, it's been an absolute nightmare if i'm honest. Any piece of paper you can think of relating to both your personal and company accounts that they can request, they have done, in my case. I've had to provide company bank statements, dividend vouchers, wage slips, SA302's, personal bank statements, accountants reference, 3 years company accounts, and i think i'm missing out even more... so definitely get all your paperwork lined up and ready

Good luck!

lovinituk

The company should be issuing you with tax vouchers/certificates for the dividends paid. These are proof of your income and tax paid.

kingstreet

Lenders will want the latest two years' SA302s from HMRC with the letter sending them out to you.

They usually take an average of director's remuneration and dividends over the two year period.

There are some lenders who will take a contractor's daily rate, instead, if that would prove greater.

lovinituk

kingstreet wrote: »

Lenders will want the latest two years' SA302s from HMRC with the letter sending them out to you.

They usually take an average of director's remuneration and dividends over the two year period.

My wife and I who are joint directors in our company are about to embark on a house move. We currently only have 1 year of dividends paid, with the company financial year ending in June. Will we have to wait for the 2nd divi to be paid out or are there lenders who will consider with just the one year?

kingstreet

There are about three lenders who will accept one year's trading record.

AnnaLMLH

only one year here itll be nearly two nearer the time, maybe ill just leave it out and go on dh wage
as my earnings are all but irrelevent, i only keep track to make sure we arnt overpaid anywhere else

lovinituk

kingstreet wrote: »

There are about three lenders who will accept one year's trading record.

OK, thanks. Its probably worth us waiting until after June to get more choice then.

amnblog

lovinituk wrote: »

The company should be issuing you with tax vouchers/certificates for the dividends paid. These are proof of your income and tax paid.

Of no use to lenders you need the SA302s