Mortgages question: I might have screwed it up...

[Martin@AS Financial]

Hi all

I've been contracting for 4 years and had accounts for all of those years, getting a mortgage in principle from a regular lender was no problem last summer. Anyway that house sale fell through and I've since wound my company up for reasons I won't bore you with, which was my mistake as I have unwittingly reset the self employed for x years back to zero.

I've just got a new contract so I am trying to find a way around this, would working under an umbrella company mean I could get a mortgage within a couple of months rather than years?

I'm looking at buy to let mortgages btw.

Any help / advice massively appreciated!

Subject to credit score and overall borrowing, there are still one or two lenders who will consider this based on the rental income and not your personal income.

[SueEllen]

I gave up on the high street after my own bank declined me as they couldnt understand the difference between company earnings and my actual salary + dividend so would only lend me 75k (i leave a warchest in the company so i can pay the mortgage if im not working) and the second declined me as my income had gone down from the previous year (becuase the year prior I had a divorce to settle and needed to pay lawyers and took dividends which put myself into the 40% bracket).

Some on the high street i.e. Halifax, Virgin Money now understand about the different forms of self employment but want 3 years accounts, while others i.e. Nationwide just don't want us.

It also doesn't matter if you bank with them or not as a lot have tightened up their lending criteria as they simply don't want to lend to certain customers.

[BolshieBastard]

Hi all

I've been contracting for 4 years and had accounts for all of those years, getting a mortgage in principle from a regular lender was no problem last summer. Anyway that house sale fell through and I've since wound my company up for reasons I won't bore you with, which was my mistake as I have unwittingly reset the self employed for x years back to zero.

I've just got a new contract so I am trying to find a way around this, would working under an umbrella company mean I could get a mortgage within a couple of months rather than years?

I'm looking at buy to let mortgages btw.

Any help / advice massively appreciated!

I did something similar about 10 years ago, closed down the company as I was going in a different business direction and started a new co. Went to my (personal) bank and explained the situation to them. They said no probs and gave me my flexi mortgage there and then.

So, although your bank may not have the best rate currently, if no other lender is prepared to give you a BTL, ask your bank.

[kingcook]

So go get a mortgage from HMRC then.

What I meant was that we're all self-employed.

I've been told in the past (by an old accountant) and many others say on here that we're all employed (by our limited companies).

I enquired about a mortgage last year at my local Halifax branch and explained that I was an employee of my limited company. "Right", said the advisor, "so we'll select self-employed from this drop-down menu option".

[IR35FanClub]

Just go to one of the contractor mortgage specialist, tell them your day rate and they give you back and obscenely high figure they can lend, then borrow a quarter of that and repay asap and bobs ya uncle.

I gave up on the high street after my own bank declined me as they couldnt understand the difference between company earnings and my actual salary + dividend so would only lend me 75k (i leave a warchest in the company so i can pay the mortgage if im not working) and the second declined me as my income had gone down from the previous year (becuase the year prior I had a divorce to settle and needed to pay lawyers and took dividends which put myself into the 40% bracket).

Computer says no came to mind, no chance to talk to anyone. Only found out why i had been declined by writing to the complaint departments, lol.

[SueEllen]

A mortgage advisor would find it odd that someone wound up a company they were a director and 100% shareholder that made a decent profit and stayed in the same sector.

At the moment while lenders will take limited company contractors with accounts their mortgage advisers still ask lots of questions.

If you are a decent googler you can find out lending criteria online i.e. who they regard as self-employed, what documentation they want from you.

One thing jmeredith123 risks is a regular lender with strict criteria doing a credit search then referring their case to their underwriters who turns around and says no, which in turn makes other lenders more likely to say no.

However if jmeredith123 goes to a broker they will know which lenders have more lax criteria so know which underwriters to ask.

[d000hg]

So go get a mortgage from HMRC then.

[kingcook]

Mortgage providers don't necessarily see it quite that way. Sort of. Ish.

HMRC see it this way...

HM Revenue & Customs: Employment status

[d000hg]

If you were contracting you were an employee not self-employed...

Mortgage providers don't necessarily see it quite that way. Sort of. Ish.

You can still request SA302 forms from HMRC for the last 3 years for free.

Depending when you wound up the company, your last 3 years' accounts might not even include winding the company up.

[stek]

Mortgages question: I might have screwed it up...

If you were contracting you were an employee not self-employed...

[northernladuk]

What has reseting the clock got to do with it? They just want you to prove your income for the last number of years which you can do. I don't think they are bothered how many years you have been self employed, just can you afford the mortgage.

Have you actually spoken to any providors to see what they say?

[jmeredith123]

Hi all

I've been contracting for 4 years and had accounts for all of those years, getting a mortgage in principle from a regular lender was no problem last summer. Anyway that house sale fell through and I've since wound my company up for reasons I won't bore you with, which was my mistake as I have unwittingly reset the self employed for x years back to zero.

I've just got a new contract so I am trying to find a way around this, would working under an umbrella company mean I could get a mortgage within a couple of months rather than years?

I'm looking at buy to let mortgages btw.

Any help / advice massively appreciated!