Part PAYE, part self employed mortgage - is it even possible?!

buzzyzoe

Hi all,

I work in TV and have always been in contract based employment. Until October last year, I was PAYE employed by a variety of companies, normally for between 3 and 6 months per contract. In October last year, I was promoted to a better job title and changed to self employed (what used to be called Schedule D) I’m essentially doing the same job and am working on the same contract basis.

I have payslips until October and my tax return for 2017-2018 which shows both my PAYE and self employment earnings. In total for the year, I earned £41,000. I’m looking to borrow around £120,000 on a £450,000 property, so affordability shouldn’t be an issue. My current take home pay per month before tax is around £5000.

I’ve spoken to London and country and they’ve said there isn’t anyone that would lend on this basis as I don’t have a full year’s accounts. Does anyone know of any lenders that would lend on this basis?

Thanks in advance for any advice!

ACG

I think there might be a way, although it is based on limited information.
Find a broker (not a call centre/estate agent broker) to investigate it for you. It will probably need to be a small lender who will do everything on a manual basis.

buzzyzoe

ACG wrote: »

I think there might be a way, although it is based on limited information.
Find a broker (not a call centre/estate agent broker) to investigate it for you. It will probably need to be a small lender who will do everything on a manual basis.

Thank you! I’ll have a look for a local broker

poddle911

Yep, do speak to a broker who specialises in self-employed mortgages. How long is your current contract? We found (through our broker) that we could get a mortgage based on my husband's day rate rather than three years' worth of accounts...
Broker suggested affordability is roughly day rate plus three zeroes. We've just had our application approved for quite a bit more than that with Halifax, sub 2% fix for 5 years.
Anecdotal I know, but hope that's helpful!

buzzyzoe

poddle911 wrote: »

Yep, do speak to a broker who specialises in self-employed mortgages. How long is your current contract? We found (through our broker) that we could get a mortgage based on my husband's day rate rather than three years' worth of accounts...
Broker suggested affordability is roughly day rate plus three zeroes. We've just had our application approved for quite a bit more than that with Halifax, sub 2% fix for 5 years.
Anecdotal I know, but hope that's helpful!

That’s good to hear! Thank you! My current contract is until November so around 6 months. I don’t want to borrow anywhere near my day rate plus three zeroes, I’d be looking for around half of that!

wlouth

poddle911 wrote: »

Yep, do speak to a broker who specialises in self-employed mortgages. How long is your current contract? We found (through our broker) that we could get a mortgage based on my husband's day rate rather than three years' worth of accounts...
Broker suggested affordability is roughly day rate plus three zeroes. We've just had our application approved for quite a bit more than that with Halifax, sub 2% fix for 5 years.
Anecdotal I know, but hope that's helpful!

Hi Poddle911, please can you PM me your broker info or the company? I'm in a similar situation.

kingstreet

Most brokers can deal with contractor cases without the need for you to pay through the nose for a specialist.

wlouth

kingstreet wrote: »

Most brokers can deal with contractor cases without the need for you to pay through the nose for a specialist.

My case is slightly different to a contractor as I understand it.
I'm a lighting technician in Film and TV production. Some of my income is PAYE, certain companies such as the BBC insist on paying PAYE when you're a sole trader, even if it's a week or 2 days. Sometimes when I have a 1 to 2 day engagement I'll just invoice which will come under as self employment income.

My previous mortgage broker failed to even look at my SA302 and explain that most lenders wont take into account the PAYE income, if it's not a current employment. I can't be the first person who's freelance and does multiple PAYE engagements throughout the year who tries to get a mortgage. Our broker didn't disclose this till the mortgage got to the underwriting process and denied, oops! Thus I'm hesitant to use any old broker and would prefer one at the recommendation of someone in similar circumstances as me.

kingstreet

That's understandable but poddle is talking about "day rates" and that indicates a contractor specialist which isn't necessarily what you need.

Are you applying alone, or with a partner?

There are options out there. We recently placed a case where one applicant was a sound-man with pretty much all casual employment for the last couple of years and we had some umming and ahhing over the nature of the employment.