IO & minimum income query
ChasingButterflies
Posts: 945 Forumite
We are currently exploring options to raise funds, one of which is against our home.
In the past we have had interest only mortgages but the criteria around these seem to be ever changing so I wondered if anyone could offer up to date knowledge on this scenario?
Also since our last mortgage DH has become a shareholder (30%) of a Ltd company which changes the scenario from him being employed to self employed - correct me if I am wrong.
His income is all PAYE and is made up of salary @ £50k, and a bonus which for the last tax year was £100k and the year prior £90k.
I was looking at Barclay’s as we seem to fit the criteria. Basically, can you confirm if they will accept his self assessment details and so view his income as for the past 2 years as £150k & £140k, as opposed to £50k?
I know we need to seek independent advice but just wanted to see if generally speaking interest only would be an option for us.
Thanks in advance to anyone who can work their way through my muddled question!
In the past we have had interest only mortgages but the criteria around these seem to be ever changing so I wondered if anyone could offer up to date knowledge on this scenario?
Also since our last mortgage DH has become a shareholder (30%) of a Ltd company which changes the scenario from him being employed to self employed - correct me if I am wrong.
His income is all PAYE and is made up of salary @ £50k, and a bonus which for the last tax year was £100k and the year prior £90k.
I was looking at Barclay’s as we seem to fit the criteria. Basically, can you confirm if they will accept his self assessment details and so view his income as for the past 2 years as £150k & £140k, as opposed to £50k?
I know we need to seek independent advice but just wanted to see if generally speaking interest only would be an option for us.
Thanks in advance to anyone who can work their way through my muddled question!
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Comments
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Barclays need 2 years self employment evidence, so if he has only recently become self employed, it does not fit criteria, unless their criteria has changed, we try to avoid barclays so I am not that up on their current criteria.I am a Mortgage AdviserYou should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0
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Barclays need 2 years self employment evidence, so if he has only recently become self employed, it does not fit criteria, unless their criteria has changed, we try to avoid barclays so I am not that up on their current criteria.
He has been employed by the same company since he was 18. He became a shareholder 6 years ago. Apologies I was trying to give enough information without an unnecessary wall of text!
I appreciate the reply, many thanks.0 -
I use barclays quite a lot and recently did an interest only with them.
Income requirement was 75k
As long as you have 2 yrs with him being self employed and tye average of the 2 yrs salary and dividends being more than 75k then it should fitI am a Mortgage Adviser
You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
The purpose of the funds being released may have a bearing on the decision.0
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Thrugelmir wrote: »The purpose of the funds being released may have a bearing on the decision.
IHT bill. A solicitor is one of the executors and won’t allow us to pay by instalments (which they had agreed with HMRC)0 -
ChasingButterflies wrote: »IHT bill. A solicitor is one of the executors and won’t allow us to pay by instalments (which they had agreed with HMRC)
Luckily Barclays are one of the few tht allow lending to repay a tax bill.0 -
I just checked on this as Barclays website doesnt exclude capital raising for a tax bill but another site that collates lender criteria says they wont do it.
I called the broker support and the girl initially said they would do it and then went off to check with an underwriter who confirmed that Barclays will not lend for purposes of paying a tax bill.
Bit of a shame as the website is a bit misleading0 -
Deleted_User wrote: »I just checked on this as Barclays website doesnt exclude capital raising for a tax bill but another site that collates lender criteria says they wont do it.
I called the broker support and the girl initially said they would do it and then went off to check with an underwriter who confirmed that Barclays will not lend for purposes of paying a tax bill.
Bit of a shame as the website is a bit misleading
Thank you - it was really kind of you to check.
Looks like another plan is needed!0 -
Hang on.
Who is paying this inheritance tax bill? Presumably the estate has insufficient cash resources?
Usually in such circumstances, the beneficiaries purchase the asset from the estate (eg property) so the mortgage is being used to purchase equity (assuming the beneficiary will inherit a share) then the cash in the estate can be used to settle the tax bill?I am a mortgage broker. You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice. Please do not send PMs asking for one-to-one-advice, or representation.0 -
kingstreet wrote: »
Presumably the estate has insufficient cash resources?
That is exactly the case. It is complex, I was perhaps trying to over simplify things. There were 2 related deaths close together. We had been given IHT figures which we had sufficient funds to add to estate funds to clear the bill. Then the bill increased, and other bills appeared. I think the property has already been transferred (or at least we have been charged for it) I can get DH to look into that on Monday.
I really appreciate you taking the time to throw ideas into the mix.0
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