How are you going to get a mortgage if you have a limited company?
You’ve seen this great house that you absolutely love and it’s perfect for you. The kids love it and the garden is perfect for the dog!
Can you afford it? That’s when you go along to see your mortgage adviser who says, “can I have the last three payslips please so that I can tell you how much you can afford to borrow?”
Hmmmm, this is where it starts to unravel a bit because it’s not as easy as that is it?
If you are an owner of a limited company and you pay yourself a small amount of salary and a larger amount of dividends, your last three payslips aren’t going to give you a very big mortgage.
So lenders will want to have a certificate from your accountant which tells them about the company, the profitability over the past three years and your drawings by way of salary and dividends.
They will also want to see your last two or three tax returns and that these have been filed with HMRC.
This is where the fun starts! You had meant to get the information to your accountant to get last year’s tax return done but somehow you hadn’t quite managed to get round to it – there are more important things to think about after all.
Or are there? If you are thinking about moving house, changing mortgage providers or even just re-mortgaging with the same lender, you will need to have up to date tax returns or it just won’t happen for you.
So, if you have a mortgage of any kind on your radar in the next twelve months, perhaps you need to push the tax return information higher up the list of priorities – you don’t want to lose out on that dream new home do you?
If you would like to have more information about this or chat to us about anything else why not get in touch?