Mortgage based on take home salary

P1ckl3s0m3

Hi All,

I was sure this question must have been asked before, but thread trawling turned up nothing exactly like what I'm after so I'm hoping the financial guys here might be able to assist.

As a company director, I pay myself in the time honoured basic pay plus dividends manner. I am looking to get a mortgage and am wondering if there is such a thing as a mortgage based on provable take home salary rather than salary and dividends.

My rationale is that if, for example, I was taking home £30k from a regular job, then my gross salary would be around £40k. As a mortgage applicant with a £40k salary, I would achieve a mortgage of around £120-150k, lender permitting. However, as a director with a documented salary £8k and then £22k dividends, I would be taking home the same amount in actual pound notes, but would only be able to achieve a mortgage figure of £90-105k.

Has anybody else been through the same quandary and have they managed to get anywhere with it?

Here's hoping, and thanks for any advice.

ACG

There are lenders who will work off Wages plus net profit of the company which is usually more attractive than wages plus dividends if you do not pull every penny profit from the company.

David_White

Clever accounting to reduce a tax bill and borrowing large amounts from a mortgage lender don't tend to coincide I'm afraid.

Malmo

David_White wrote: »

Clever accounting to reduce a tax bill and borrowing large amounts from a mortgage lender don't tend to coincide I'm afraid.

Reminds me of this thread debate from a while ago.

HappyMJ

P1ckl3s0m3 wrote: »

Hi All,

I was sure this question must have been asked before, but thread trawling turned up nothing exactly like what I'm after so I'm hoping the financial guys here might be able to assist.

As a company director, I pay myself in the time honoured basic pay plus dividends manner. I am looking to get a mortgage and am wondering if there is such a thing as a mortgage based on provable take home salary rather than salary and dividends.

My rationale is that if, for example, I was taking home £30k from a regular job, then my gross salary would be around £40k. As a mortgage applicant with a £40k salary, I would achieve a mortgage of around £120-150k, lender permitting. However, as a director with a documented salary £8k and then £22k dividends, I would be taking home the same amount in actual pound notes, but would only be able to achieve a mortgage figure of £90-105k.

Has anybody else been through the same quandary and have they managed to get anywhere with it?

Here's hoping, and thanks for any advice.

Yes...

If you really want to invest in property then you can.

Buying a house to live in is an investment.

You can get a mortgage on a BTL property with a 20% deposit then you can use the rental income to pay the mortgage and what you would have used to pay a mortgage of your own you can rent a property that you would like to live in. Once the tenants rent has paid the mortgage off after 30 years you can move into the property.

So...I own a 3 bedroom house with a BTL mortgage and I rent a 2 bedroom flat. I have very little provable income. I do not even earn enough to pay income tax. To get a BTL mortgage all you need to earn is £1 per year (i.e not make a loss), have a good deposit and the rent charged must be no less than 125% of the interest charged on the mortgage at the standard variable rate plus 1%.

There are also mortgage companies that can lend to you based on one year of company accounts.