Am i facing mortgage problems?

[malvolio]

How so? She works in the same business area as when she was PAYE - not necessarily for the same business. Unless I'm misreading things.

While working for your ex-employer makes an IR35 defence difficult, it is not a given that you will be caught if the new role is significantly different from the old one and you meet the usual IR35 escape clauses in the contract and in reality. The hard part is working as a contractor, not as an ex-employee that everyone knows.

Don't forget, IR35 remains primarily concerned with Friday-to-Monday, according to that nice Me Osborne: if he didn't need that defence mechanism it would have died a couple of years ago.

[Crossroads]

While working for your ex-employer makes an IR35 defence difficult

But she didn't say that... said same "business area"... i.e. she was a permie BA, and is now a contract BA. I didn't read that as "my former employer is now my client"

[malvolio]

But she didn't say that... said same "business area"... i.e. she was a permie BA, and is now a contract BA. I didn't read that as "my former employer is now my client"

I did. How do you deduce that it isn't? She's still a BA working for her ex-employee. Hector won't be too fussed about the precise details.

[GazCol]

But she didn't say that... said same "business area"... i.e. she was a permie BA, and is now a contract BA. I didn't read that as "my former employer is now my client"

That's how I interpreted it too.

[Freelancer Financials]

Hi,

First time poster here, and looking for some advice.
Basically, I have been contracting as a Business Analyst for two years now, and before that I was a full time PAYE employee in the same business area. I had to take some personal time off though between April and August and have just started a new contract (initial term is 3 months.)

However, myself and my husband would like to move house. We currently have a mortgage which we took out when we were both PAYE, and my husband is still PAYE. We both earn more now than we did when we took out the mortgage, but when we spoke to a mortgage adviser at a high street bank the other day the amount she reckoned she would be able to offer was very surprising...in a very low sort of way, given my daily rate.
Obviously the mortgage market has changed radically in the past few years, but I'm not convinced she knew much about contractor mortgages either.

Does anyone know if we are likely to come up against major issues when applying for a mortgage because of the 5 months I've had off? During this time, I have still been drawing a salary from my Ltd company.

Thanks for any help

Just wondering how you're getting on with your mortgage endeavours? Did you manage to sort something out?

As Martin@AS fiancial pointed out you can go down the self- employed status route (assessed on your accounts) or apply for a contractor mortgage (assessed on your contract rate alone).

If you take the self employed status route, you have a wider choice of lenders that you can apply to but each lender assesses affordability in a different way. There is no universal standard I'm afraid. The majority of lenders will take the average drawings (salary plus dividends) and then apply their affordability calculator based on your credit score and any commitments in the background. More flexible lenders will consider share of net profits and directors salary. These tend to be Virgin, Coventry, NatWest, Woolwich and Clydesdale. In the the majority of cases this allows you to borrow substantially more.

If you want to go direct, then you need to do your own research to find out which lender would give you the most favourable solution.

If your accounts don't stack up, then you can resort to using your contract rate. However, because of the 5 month break, you can only really go to one lender, Halifax. Unless you can get an exception from one of the other contractor mortgage lenders, which is going to be tight. The rates at Halifax are quite competitive at the moment.

There are also a few mortgage specialist like ourselves on this forum, like Martin@AS Financial, Power Mortgages and Contractor Money that can also help if you need a mortgage broker.

I'd love to hear how you got on.