Mortgage Lenders - Please help!

[ratewhore]

I recently got a mortgage with First Direct, who I bank with. I just showed them 2 years accounts, as my current Ltd has only been running 2 years. No dramas at all, they weren't interested in the accounts from my previous Ltd at all.

To the OP, I wouldn't be overly concerned re the HMRC check, I would be more concerned in getting a mortgage based on contract rate. If you need the extra money that 4 x rate instead of 4 x income gets you, then you may be stretching yourself. Could you manage if you were canned next week?

[Peter Loew]

I recently got a mortgage with First Direct, who I bank with. I just showed them 2 years accounts, as my current Ltd has only been running 2 years. No dramas at all, they weren't interested in the accounts from my previous Ltd at all.

To the OP, I wouldn't be overly concerned re the HMRC check, I would be more concerned in getting a mortgage based on contract rate. If you need the extra money that 4 x rate instead of 4 x income gets you, then you may be stretching yourself. Could you manage if you were canned next week?

If you got a mortgage based on your accounts income, then you must either be inside IR35 and paying yourself 75% salary on your gross income, or paying yourself a higher income / dividend payment than (most?) contractors outside of IR35. All depending on how much you are borrowing of course.

Of course I can afford it. I'm on a good rate and can survive for at least 6 - 8 months (based on the Halifax offer) if I was terminated tomorrow. The only thing I might change is my salary; I may well increase it to a more comfortable amount.

Seriously though, how do you take out a mortgage based on your personal income? Could understand if you're paying yourself a high salary / dividend but I try to optimise my earnings the traditional Ltd way..

P

[ratewhore]

If you got a mortgage based on your accounts income, then you must either be inside IR35 and paying yourself 75% salary on your gross income, or paying yourself a higher income / dividend payment than (most?) contractors outside of IR35. All depending on how much you are borrowing of course.

Of course I can afford it. I'm on a good rate and can survive for at least 6 - 8 months (based on the Halifax offer) if I was terminated tomorrow. The only thing I might change is my salary; I may well increase it to a more comfortable amount.

Seriously though, how do you take out a mortgage based on your personal income? Could understand if you're paying yourself a high salary / dividend but I try to optimise my earnings the traditional Ltd way..

P

Not having a go at you PL, it was a general point.

In terms of proving income, if I remember, they looked at net profit. So I guess they could assume your max possible gross personal income = your net profit, regardless of how you split it.

My last mortgage was on personal income, which they worked out from the accounts. Doesn't matter if it's salary or divvy, it's all income.

I got an offset too, which I would recommend to any contractor...

[kanulondon]

FYI - Got an approval from the Halifax via Contractor Financial today. They apparently spot checked my accounts too and this presented no issues.

[Bumfluff]

I recently got a mortgage with First Direct, who I bank with. I just showed them 2 years accounts, as my current Ltd has only been running 2 years. No dramas at all, they weren't interested in the accounts from my previous Ltd at all.

To the OP, I wouldn't be overly concerned re the HMRC check, I would be more concerned in getting a mortgage based on contract rate. If you need the extra money that 4 x rate instead of 4 x income gets you, then you may be stretching yourself. Could you manage if you were canned next week?

I went first direct as well what they would loan me was based on contract daily rate / company profit they weren't bothered with what my actual personal income was, I actually thought most contractor friendly lenders did it on daily rate rather than actual personal income, may be rules have changed, I remortgaged to first direct in May last year.

[Scrag Meister]

Not sure if things have loosened up now following the lending restrictions over the last couple of years, but Abbey (now Santander) wouldn't touch me without 2 years accounts, and the rates on the couple that I did find via a broker were stupid. After 2 years got 0.49% above base for the term.

Loyalty means nothing either, I had been with them for 22 years and never missed a payment, just paid off one mortgage and looking to buy a place in London.

All the lenders are just more careful. They finally decided that checking a borrowers income was not such a stupid thing after all.

[Peter Loew]

FYI - Got an approval from the Halifax via Contractor Financial today. They apparently spot checked my accounts too and this presented no issues.

Well done. I should know by next week. I've done a bit of digging and I don't suspect there should be any problems. They apparently check details around your tax payments to ensure you're paying tax / filling out your tax forms etc.

[Peter Loew]

I went first direct as well what they would loan me was based on contract daily rate / company profit they weren't bothered with what my actual personal income was, I actually thought most contractor friendly lenders did it on daily rate rather than actual personal income, may be rules have changed, I remortgaged to first direct in May last year.

Well this is interesting. This is different to ratewhore who says that he needed to produce accounts for First Direct - rules as you say, have probably changed since May last year.

Did you use a broker?

[Jet Setter]

I've used Contractor Mortgages Made Easy. I think they deal with 4 or 5 banks and as long as you've been a contractor for more than 12 months there are not too many hassles. Even being an Aussie on Tier One didn't exclude me.

[Epiphone]

Have also used CMME and had no such hassles.

I'd be looking for another broker to be honest. anyway, you should have nother broker to make sure you're getting whole of market.