Employment status for mortgage

Shak1905

Hi everyone

I’m hoping i can get some help and advice. My wife and I are planning to purchase a house in the near future and I wanted to ask how my employment status may affect our mortgage application.

I currently am a company director and own 50% of it. I’m currently paid via salary and dividends for tax purposes. We’ve been trading for under 2 years so I understand I may have issues with lenders as self employed. So I have a few questions below:

- Is it possible for me to change my status from self employed to employed under the company and pay myself a salary. Obviously I’d pay all taxes.
- would I need to disclose that I own 50% of the company? Or can I say my job title is x and that I’m an employee?

Many thanks in advance for your advice.

ACG

How far under 2 years are you?

Typically a lender will treat you as self employed if you own more than 25% of the business. By not disclosing it or misrepresenting your situation you are committing mortgage fraud.

The only potential way around it would be to reduce your shareholding, but then to do that purely for mortgage purposes is probably also skating on thin ice. You are also risking yourself and whoever takes up your shares being liable for things like CGT and possibly other tax implications.

Do it properly and then you have no concerns about it all unravelling at the last minute. Can you imagine exchanging contracts and then just before the funds are released the lender does a quick companies house check? (not unheard of) you would be in breach of contract if you could not complete on time.

Mortgage_Adviser

There is a number of lenders who will consider some one with just one year worth of company accounts

Shak1905

Thank you. We’re currently 19 months trading. Do you know if self employed people end up getting interest rates higher than employed?

Wishing I just got myself a full time job now!

Thanks.

Shak1905

Do those lenders offer higher interest mortgages?

amnblog

Self Employment is not a factor in rate pricing.

Rick_Albright

This is the plan we took out to obtain a mortgage:

https://forums.moneysavingexpert.com/discussion/comment/74487668#Comment_74487668

We are self employed.

You can thank me later