Mortgage Question, First Time Buyer!

[meggy96]

Hi,
I have my own business which is a ltd company and I am director of this and pay myself a salary out of the business's profits. My partner is employed and we are both first time buyers. We are looking to buy our first property and can put down 40% deposit.

I am wondering, am I classed as 'self employed' or am I 'employed' - as I do not have 2 years of accounts yet I am hoping I could be classed as 'employed' and just have to provide 3-6 months of bank statements. Please can anyone shed light? Thank you!

I am in the same boat and have applied for several mortgages over the past 10 years, you will not be able to get away with claiming ‘employed’ and provide some bank statements. They will want to see your business accounts.

i suggest you get a good broker who is experienced in dealing with this situation, they are out there.

You are definitely self-employed and they will want see accounts. I agree you need a good broker.

Ahhh I expected this to be the case! Thank you. Will look into specialist brokers. Happy for them to look at business bank account but it’s only been trading just over 1 year…is that likely to be a problem?

You don't need specialist brokers, just a good one!

It will definitely narrow down your options on lenders yes, but might not be impossible

@meggy96 London and Country are whole of the market and I believe still recommended by MoneySavingExpert. We have used them when employed and with a limited company too. Usually the interest rate is slightly higher than what is offered to those who are employed but it isn't a no. They are best to advise on the bank statement stuff and proving your income.

So the only accounts you have filed are for 2022-2023 (ending March this year)? Sorry if silly question but just checking that it's not the case that you simply haven't filed yet before the end of year deadline. In which case you would have two years of accounts.

Your accountant can provide a forecast of your expected turnover and profit.

Get a good broker. I used a local firm who were fantastic. Everyone raves about L&C too, though.

I think you'll be ok. From Halifax, as an example:

• Self Employed - 2 years history requested however, where the business has been trading for less than 2 years eg 1 year self employed and so self employed income is not available for 2 years, we will still consider these applications. You must record all full relevant years' income accurately on the mortgage application.

(Name change confusion, OP?)

@meggy96

I work in mortgage brokers and from experience either L&C or John Charcol are pretty good in these areas.

You do limit the amount of lenders that will lend but they don't increase their rates because of your situation.

Just FYI on PP's, the brokerages "recommended" on MSE site pay to be there, unfortunately the many smaller wonderful local firms (yeah i work for one!) can't afford this. We hear a lot "Martin recommends L&C" no, he doesn't, in interviews, on programs etc he recommends using a broker.

Agree with @Outnumbered99

I got a mortgage with Halifax (buying on my own) with only 1 years accounts. I had a deposit and money in the company (paid myself a salary).

Agree with @Outnumbered99, I didn’t think London and Country were good at all. If you’ve got a local Facebook group I would ask on that for recommendations.