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Self employed FTB

[simon]
[simon] Posts: 241 Forumite
Eighth Anniversary 100 Posts Combo Breaker
in Mortgages & endowments
Hello

I have a deposit

But the bank won't lend me very much because my accountant reduces my income to a few grand a year for tax purposes

The bank said to have a word with accountant to not reduce my income and then re apply next financial year...

Any other suggestions ?

Comments

  • ACG
    ACG Posts: 24,848 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    How much is your income on the most recent accounts and previous accounts and how much are you hoping to get from the bank?
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • [simon]
    [simon] Posts: 241 Forumite
    Eighth Anniversary 100 Posts Combo Breaker
    My accountant puts income at 12 grand per annum for passed 4 years...

    Bank offered to lend me 31 grand...

    Ideally I need to lend 80 / 90 k ....
  • ACG
    ACG Posts: 24,848 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    Are you a limited company?
    Are the net profits of the company higher?
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • somethingcorporate
    somethingcorporate Posts: 9,449 Forumite
    Then you'll need to be "visbily" earning £20-25k plus to stand any chance of securing a mortgage that large.
    Thinking critically since 1996....
  • [simon]
    [simon] Posts: 241 Forumite
    Eighth Anniversary 100 Posts Combo Breaker
    Not a limited company

    My net profit is 25k plus per year

    It shows on my bank statements the amount that gets paid in to my account (my income / wage)

    But bank will only go by what is on paper from my accountant !
  • csgohan4
    csgohan4 Posts: 10,600 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper Photogenic
    you can't have tax efficiency and earn good on paper for the lenders in our case, so you need to show on your tax return a modest income to satisfy affordability criteria
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"

    G_M/ Bowlhead99 RIP
  • ACG
    ACG Posts: 24,848 Forumite
    Part of the Furniture 10,000 Posts Name Dropper I've helped Parliament
    Your accountant can only put through legitimate business costs.
    Accountants can only be "good" to a certain extent.

    Ultimately, you can not have your cake and eat it. You can not have business expenses but then ask them to be ignored when applying for a mortgage. Your business needs those items/services in order to trade, so they will always be a cost.


    If your business is turning over £100,000 and expenses are £99,000 then you are not earning £100k, you are earning £1k.
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
  • csgohan4
    csgohan4 Posts: 10,600 Forumite
    Ninth Anniversary 10,000 Posts Name Dropper Photogenic
    some people purposes draw more salary or dividends the 2 years or so before a mortgage to have something on paper
    "It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"

    G_M/ Bowlhead99 RIP
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