Employed or self-employed?

smartmove07

As a company directory and 50% shareholder in a ltd company what employment status am I classed as with regards to a mortgage application, employed or self-employed?

Thanks

herbiesjp

Self employed

dunstonh

I dont do mortgages so will bow to consensus from the mortgage advisers as to how it is on mortgage applications.

However, company directors are not self employed. They have limited liability and its not their own money at risk. Plus, they do not pay class 2 NI. So, from a legislation point of view, they are employed.

Debt_Free_Chick

Agree with Dunstonh. As you are being paid by the company with tax deducted via PAYE, you are an employee.

However, the fact that you own 50% of the company as well (which is quite separate from being a director) might mean that some lenders will underwrite the mortgage as self-employed. The main reason being that you have some control over the company and it's future etc. You might also control what you're paid whether by salary or dividends.

nick_hill

Sorry to hijack

If you own 100% of shares in your company and pay yourself paye etc.

how is taht classed.

Isit better to be a secondary applicant rather than primary?

cheers

Nick

Debt_Free_Chick

nick_hill wrote: »

Sorry to hijack

If you own 100% of shares in your company and pay yourself paye etc.

how is taht classed.

Same principle - but probably self-employed.

Isit better to be a secondary applicant rather than primary?

cheers

Nick

Depends on what you're paid and what the accounts are like. Three years' accounts showing robust trading and a decent profit would probably put you in the same position as an employee. But remember that different lenders have different criteria and view different situations individually. No "one size fits all"

nick_hill

Only been set-up less than a year as a consultant but plenty of income and no overheads.

looking to get an offset mortgage so don't want to be too "different" from a lenders point of view.

cheers

nick

Debt_Free_Chick

nick_hill wrote: »

Only been set-up less than a year as a consultant but plenty of income and no overheads.

looking to get an offset mortgage so don't want to be too "different" from a lenders point of view.

cheers

nick

You'll probably need to self-certify your income or get an accountant's letter to verify your income.

What LTV do you need (percentage of mortgage to value of property)?

nick_hill

Only 40% and my better halves income would easily cover the payments

I just seems on search engines like charcoal etc. if you enter self-employed it drastically reduces your options

cheers

Nick

Debt_Free_Chick

nick_hill wrote: »

Only 40% and my better halves income would easily cover the payments

I just seems on search engines like charcoal etc. if you enter self-employed it drastically reduces your options

Definitely put your better half in as the primary applicant - it makes absolutely no difference to the final legalities of the mortgage. But you're right - you'll get access to a whole load of other deals and the whole process should be easier. They probably won't even check your income.