Ltd company, or continue self employed

burtbot1

HI all

My partner and I are thinking of selling our flat next summer (2019) and buying a house.

I am employed, but my partner is self employed. He has been self employed for 5 years, earning steadily more year on year.
He has been advised by his accountant to move to a Ltd company - he's keen to do this as it will save him money. But we're concerned about getting a mortgage, if he's only been part of his ltd company for under a year.

How long would mortgage lenders ideally require, if someone is trying to get a mortgage with a limited company? Would we foolish to do this now, as he has such a good track record being a sole trader?

Thanks!

BoGoF

Tax planning and mortgage planning don't go hand in hand.

If he doesn't even have one years accounts by the time of application you will be seriously restricting your options and in my opinion would be better waiting until mortgage sorted before incorporating.

burtbot1

Thanks Bogof, pretty much what we suspected..

The other option we have is waiting another year to sell up (so early 2020). I'm wondering if him having a little over a years' accounts as a Ltd company is equally as limiting?

Futuristic

burtbot1 wrote: »

Thanks Bogof, pretty much what we suspected..

The other option we have is waiting another year to sell up (so early 2020). I'm wondering if him having a little over a years' accounts as a Ltd company is equally as limiting?

Most lenders will want 2 if not 3 years of accounts.

burtbot1

OK, thanks both.

So does anyone know if theres any chance of getting a mortgage with one years worth of (ltd company) accounts? Just deciding if we'll just start the selling/buying process now and get it done with!

sal_III

Alternatively some lenders will be OK with SA302 as proof of income, he should have them as both self employed and ltd. director. Speak with a broker and see if such lender will be suitable for you. If that's the case, it won't matter he has switched to ltd.