Self Employed Mortgage Advice

GreenGirl123

Hi, wondering if anyone can advise me. My husband and I run our own business. We are looking at getting a mortgage in the next few months and am just trying to get what we need in place. We're quite lucky in that as we run our own business we can decide how we get paid, i.e. one of us takes for example £40k salary and the other person gets paid nil, or we each get for example £20k. I'm trying to work it out so that we can do it in the way to enable us to borrow the most amount of mortgage. Most individual banks websites that I have searched on seem to give the impression that they will lend more on a mortgage with one person earning a higher salary and the other person earning nothing than they would to two people with a combined salary of the same total amount. Does anyone have any knowledge of experience of this please?

Thanks

2scompany3sfamily

I'm afraid I don't know the answer but my advice would be to find a highly recommended broker in your local area that is well versed in self employment applications.

An excellent broker will carry you and your paperwork through, and hold your hands in a much more streamlined fashion that if you go it alone - of that I am sure.

Myself and my husband are self employed though separately, and we have just received an offer from Natwest via a broker and found it a positive experience. Wishing you the best of luck!

ACG

This could be a little more complicated than you are maybe thinking...

As most lenders average out the last 2 years, if you have someone taking a drop in income, they may take the lower figure for that person.

If you are looking to use latest figures only, it should not be an issue.

I do not know the answer to your question, it is not something I have had to research, but I wonder how much difference you have found it makes? (Just for my benefit as I quite like learning new things about this industry).

kingstreet

I've just run a two app Halifax affordability calculation.

80% LTV, 30 year term, no credit, no dependents, not SO/HTB.

One earner £30k, output was £118,370.

Two £15k earners, output was £142,500.

You must enter both as applicants though so both are party to the mortgage and the ownership. If you are doing a sole applicant calculation, the results will be skewed.

GreenGirl123

Thanks very much everyone.

I have since spoken to a mortgage broker who has advised me to use two salaries.

I think I was going wrong before by using just the one applicant rather than two applicants with one salary. If I had actually filled in the forms as I should have done as a person on an application without a salary would be considered a dependent and therefore mean that you could borrow less.

Thanks for your advice.

MortgageMamma

You also need to consider this

If you are a limited company you can do this

Salary + dividends

or

Share of net profits

MortgageMamma

There are also some lenders who can take certain expenses into account for self employed people to boost income/affordability