100% Mortgage

[meridian]

100% Mortgage

So after looking around a bit I got the following responses:

1 - I cant get a 100% mortgage as a contractor from a contractor specialist mortgage broker (were they look at your day rate/contract rather than SA302). It is not open/available to them
2 - If I do go for a 100% mortgage they will look at SA302 in which case the mortgage I can get is tulip

Workaround (suggested by 2 friends who work at a bank and building society)

If you own more than 20% of a business you are classed as self employed/contractor/director.
Give away 82% of your business to a spouse (or someone you trust). Keep myself on as an employee and then set my salary to whatever I want (e.g. £90K). Run this like for 3 months and then all mortgages are open to me. I dont need to provide SA302, just 3 months payslips and I get can a decent mortgage. It not illegal, just grey.

Not that I am going down this route, but interesting that this was suggested by 2 different people.
At this point its going to be renting for another year to raise up the deposit again.

Grey? If you’re intentionally doing it to gain a mortgage and are then planning to take the company back and reduce your salary it could be construed as fraud.

Stick with the renting and saving plan.

[WTFH]

So after looking around a bit I got the following responses:

1 - I cant get a 100% mortgage as a contractor from a contractor specialist mortgage broker (were they look at your day rate/contract rather than SA302). It is not open/available to them
2 - If I do go for a 100% mortgage they will look at SA302 in which case the mortgage I can get is tulip

Workaround (suggested by 2 friends who work at a bank and building society)

If you own more than 20% of a business you are classed as self employed/contractor/director.
Give away 82% of your business to a spouse (or someone you trust). Keep myself on as an employee and then set my salary to whatever I want (e.g. £90K). Run this like for 3 months and then all mortgages are open to me. I dont need to provide SA302, just 3 months payslips and I get can a decent mortgage. It not illegal, just grey.

...and you get screwed on tax, you still have no money, you'll not be able to take much in dividends, you won't own your LTD, if you choose to take over control of the LTD again then alarm bells will be ringing with HMRC.

Save and wait until you can put a deposit down. Remember the figures I showed you above? You will spend a fortune in extra interest if you go 100% compared with going 80-90%.

[northernladuk]

Well at least there are some positive lessons out of this thread. Don't listen to friends that work in banks or building societies

[MonkeysUncle]

Well at least there are some positive lessons out of this thread. Don't listen to friends that work in banks or building societies

Well its something they have both done with other people who have come in and it has gone through fine.

As for what happened after (i.e. taking back the LTD, if it flagged up with HMRC) I (and I assume them) dont know.

Agreed the best way forward is just to rent and save, unless you are happy for someone else to own your business for the foreseeable future.

[pr1]

Save and wait until you can put a deposit down. Remember the figures I showed you above? You will spend a fortune in extra interest if you go 100% compared with going 80-90%.

Re-do your numbers with 12 months rent going down the drain trying to save up the deposit, meanwhile the house you would have bought goes up another 3-6%

Repeat for every year you haven't managed to save enough for the deposit for the 90% -

The "extra cost" of a 100% mortgage starts to look more appealing...

[doconline]

Have you also considered the help to buy scheme? I don't know too much about it, but isn't it a 75% mortgage and a 20% government backed loan with a 5% deposit? If you can't quickly get 5% together as a contractor maybe look at a smaller property or a cheaper area? Whilst you are saving there is the Help to Buy ISA too, that the government kicks in 25% towards. Not sure if these can be combined though, so have a read first.

[northernladuk]

Have you also considered the help to buy scheme? I don't know too much about it, but isn't it a 75% mortgage and a 20% government backed loan with a 5% deposit? If you can't quickly get 5% together as a contractor maybe look at a smaller property or a cheaper area? Whilst you are saving there is the Help to Buy ISA too, that the government kicks in 25% towards. Not sure if these can be combined though, so have a read first.

Some links to back this up...

https://www.freelancerfinancials.uk....s/help-to-buy/

https://www.helptobuy.gov.uk/

[WTFH]

The "extra cost" of a 100% mortgage starts to look more appealing...

Not if you are a contractor with zero savings who can't get a 100% mortgage.

[pr1]

Not if you are a contractor with zero savings who can't get a 100% mortgage.

Ah the standard CUK "you have made a good point but I will ignore it and reply with a completely unrelated one" response

[WTFH]

Ah the standard CUK "you have made a good point but I will ignore it and reply with a completely unrelated one" response

You have made a very good point if the person has a permanent job and is able to get an offer of a 100% mortgage and has some savings.

...or, your reply is not something that matches the requirements of the OP, based on what they have told us. (A standard trait on CUK "You have asked a question I can't answer so I will ignore it and reply with a completely unrelated response")