Calculating Mortgage - Business Dividends?

jaype

Hello - my partner and I are going to buy a house once we get more of a feel of how the market is panning out (are currently renting and I can't see the landlord selling up as it's their family home and they are posted somewhere for at least another year). Anyway, I was wondering how our mortgage calculation would pan out? We currently each earn about 27k each (him from PAYE, I'm self employed but will have 3 years' accounts by early 2009) But we also run a successful business - this year and next we will each take out dividend bringing us up to the top of the lower rate tax band (39.5k or thereabouts). So, how would a lender calculate our income? Just on the 27k each? Would we have to self-cert? Thanks in advance for your thoughts.:beer:

homer_j_3

With 3 yrs certified accounts and confirmation from your accountant that you receive your income in a way which means you take the majority of it via dividends then you should be accepted at full status and there should not be a need fot self cert.

You could probably get away with 2 yrs and a projection on the 3rd year if you decided to make your move sooner.

jaype

Cheers for clearing that up - first year was partly maternity leave so the amount of earnings were lower. Unfortunately the market is such a mess at the moment it looks like dithering will be the order of our day for a while...

herbiesjp

Your own bank may also be able to agree a mortgage deal based on the funds it can see going through your accounts, without the need for accounts etc.

May be another option for you.