Source of mortgage deposit with Natwest

Mbuya

I am a first time buyer and got a DIP with natwest on 30/12/2019. So now l am about to put in a full application. Between my hubby and l we have annual gross of £140k and we want to buy a house for £385k. We are putting 5% deposit abd usibg htb. So now part of the deposit is not from my main job but from a side consultancy l have done as an individual. Monies have now been paid by rhe company l consulted for-about £3000. So since l don't have a business registered for this side thing, will this be a problem with the lenders if l dont have a registered business. I do individual consulting once in a while. For affordability l am only using details from our current employment its just the additional deposit l am getting from the consulting. Anyone who has been in a similar situation? Please help

[Deleted User]

There's no reason to think there would be a problem until there's is one.

You can show the source of the money if asked.

If however you were paid in bloodstained fifties, you may have an issue.

Mbuya

Thank you, no it was paid in the bank

[Deleted User]

I'd say it depends on the underwriter on thr day. Natwest generally are an easy lender to deal with but they might ask for paper trail of this money.

If you don't have a business for this money how do you invoice for payment? Who pays tax? If they ask for invoices and they are dated in previous tax year then they could ask for self employed docs to show it was declared as income to hmrc.

There is maybe a 10% chance of them asking for that. Natwest are usually very good, but occasionally get a fussy underwriter

Mbuya

Thanks JMA, that's helpful. I invoiced it to my personal name

BoGoF

So are you guilty of tax evasion?

The fact you didn't enter this source of income on your application suggests you know what you are doing is wrong.

Hopefully get found out at some point.

davidmcn

Bear in mind the solicitors will also check source of funds, so they may need evidence of what the payment is if it doesn't obviously look like from employment.

Retired_Mortgage_Adviser

385k purchase, 19k deposit of which 3k is from a one-off second/casual source of income.

With a combined income of 140k, you must be receiving net income of 7-8k every month, correct?

If I were in your place I'd just wait for my next pay to come in and declare the source of deposit as savings. Use the consultancy money for day to day expenditure this month, rent, paying down debt, etc.

But yes if it's come into your main bank account, an underwriter could possibly ask about the source but I'd still put it as low probability, given its just 3k as opposed to 30k.

If it does get questioned, your prior year/s SA returns should show this under "other income".

To note that the comments/advice given here are based on very limited information so the best person to speak to would be your mortgage broker.

[Deleted User]

If you invoice to your personal name then you are the business. Just cause there isn't a Ltd at the end of it doesn't mean you aren't a company.

Declare it as self emiyed income and pay any tax due before it bites you in the future

Mbuya

Retired_Mortgage_Adviser wrote: »

385k purchase, 19k deposit of which 3k is from a one-off second/casual source of income.

With a combined income of 140k, you must be receiving net income of 7-8k every month, correct?

If I were in your place I'd just wait for my next pay to come in and declare the source of deposit as savings. Use the consultancy money for day to day expenditure this month, rent, paying down debt, etc.

But yes if it's come into your main bank account, an underwriter could possibly ask about the source but I'd still put it as low probability, given its just 3k as opposed to 30k.

If it does get questioned, your prior year/s SA returns should show this under "other income".

To note that the comments/advice given here are based on very limited information so the best person to speak to would be your mortgage broker.

That's very very helpful. So since we have 6 weeks from reserving to exchange, l hope l c

Mbuya

Sorry did not complete my sentence. I wanted to say l will explain this to tje MA and see if l can include the 3k from my end of jan salary