Mortgage Lenders - Please help!

[Peter Loew]

Hi All,

I'm in a bloody mess and I hope someone can point me in a new direction / give me more options.

Through my broker at Alexander Hall, we applied for a mortgage with Halifax. Halifax approved and sent me the offer and I signed the deed. However what's now happened is that my application has been picked for a spot check, (Apparently it's now 1 in 5 applicants who are picked on a monthly basis). This means Halifax will go to the HMRC to confirm my income and tax details (they will not say what information they actually look for and how it affects their lending criteria, if at all).

Halifax's lending criteria is purely based on contract value and mostly only for IT contractors - hence they were the logical choice. However my broker (who covers whole of market) says that they're the ONLY lenders to evaluate on contract value, and that other lenders will lend based on my PERSONAL salary and dividend income. Since I am a contractor optimising my tax my paying myself minimal salary and capped dividend, going to one of these other lenders will be utterly useless due to the amount I need to borrow.

I am really concerned about two things, I hope you can help me out on:

1) Are there other lenders you know who consider contract value as their lending criteria, or have any criteria that can work to my favour, rather than the personal income and dividend payments I make to myself?

2) Halifax are checking with HMRC - will this mean I will be next in line for IR35 checks etc. since HMRC's spotlight will be on me / my company?

I am more concerned about number 1 and will deal with number 2 if, or when it happens.

Cheers!



P

[kanulondon]

Hi All,

I'm in a bloody mess and I hope someone can point me in a new direction / give me more options.

Through my broker at Alexander Hall, we applied for a mortgage with Halifax. Halifax approved and sent me the offer and I signed the deed. However what's now happened is that my application has been picked for a spot check, (Apparently it's now 1 in 5 applicants who are picked on a monthly basis). This means Halifax will go to the HMRC to confirm my income and tax details (they will not say what information they actually look for and how it affects their lending criteria, if at all).

Halifax's lending criteria is purely based on contract value and mostly only for IT contractors - hence they were the logical choice. However my broker (who covers whole of market) says that they're the ONLY lenders to evaluate on contract value, and that other lenders will lend based on my PERSONAL salary and dividend income. Since I am a contractor optimising my tax my paying myself minimal salary and capped dividend, going to one of these other lenders will be utterly useless due to the amount I need to borrow.

I am really concerned about two things, I hope you can help me out on:

1) Are there other lenders you know who consider contract value as their lending criteria, or have any criteria that can work to my favour, rather than the personal income and dividend payments I make to myself?

2) Halifax are checking with HMRC - will this mean I will be next in line for IR35 checks etc. since HMRC's spotlight will be on me / my company?

I am more concerned about number 1 and will deal with number 2 if, or when it happens.

Cheers!



P

I am doing something similar currently, Halifax as far as I am aware are the only lenders who offer a mortgage against your contract value.

However, the only reason I've gone with Halifax is due to the fact that I don't as yet have 2 years of complete business accounts and no one will touch me with a barge pole

Have a look around, as long as you have 2 years (some ask for 3 years) of accounts you should have some choice. First Direct and HSBC are supposed to be good lenders.

KL

[Moscow Mule]

I'm getting my new mortgage through contractor money with the Woolwich.

No dramas at all.

[northernladuk]

2) Halifax are checking with HMRC - will this mean I will be next in line for IR35 checks etc. since HMRC's spotlight will be on me / my company?

If what you are saying is correct and 1 in 5 are looked at that has to be a hell of a lot of requests from HMRC. Firstly I cannot believe that a standard request in to your details would spark of an IR35 investigation. Thats like saying the police checking you on ANPR will spark off a house search. Its a standard request and is dealt with.

Second is the sheer volume of requests. They can't do an IR35 for everyone that has been picked.

I really don't think you should worry about this one at all...

and all said and done you have nothing to fear from an IR35 investigation........ have you???

[Peter Loew]

I am doing something similar currently, Halifax as far as I am aware are the only lenders who offer a mortgage against your contract value.

However, the only reason I've gone with Halifax is due to the fact that I don't as yet have 2 years of complete business accounts and no one will touch me with a barge pole

Have a look around, as long as you have 2 years (some ask for 3 years) of accounts you should have some choice. First Direct and HSBC are supposed to be good lenders.

KL

Let me tell you something about HSBC. I am a Premier customer, have been with them since Midland Bank and use them as my Business Bank too. I have a spotless credit history etc, no debts, etc.

I applied for a mortgage with them as first point of call, their underwriters rejected my application because like most lenders, they do not recognise you are a 100% shareholder in your company, and only count the income and dividends payments you pay yourself annually into your personal bank account. So, using them depends on how much you want to borrow and how much salary / dividend you pay yourself.

[Peter Loew]

I'm getting my new mortgage through contractor money with the Woolwich.

No dramas at all.

What is their lending criteria; did you have to produce your accounts?

[Peter Loew]

If what you are saying is correct and 1 in 5 are looked at that has to be a hell of a lot of requests from HMRC. Firstly I cannot believe that a standard request in to your details would spark of an IR35 investigation. Thats like saying the police checking you on ANPR will spark off a house search. Its a standard request and is dealt with.

Second is the sheer volume of requests. They can't do an IR35 for everyone that has been picked.

I really don't think you should worry about this one at all...

and all said and done you have nothing to fear from an IR35 investigation........ have you???

I am saying what I've been told by my broker. I am not too worried about this as I have nothing to hide, but it does spark a natural concern.

[Peter Loew]

Has anybody else got any advice / gone through similar experiences to this?

P

[Moscow Mule]

What is their lending criteria; did you have to produce your accounts?

Affordability based on contract rate. Had to supply current contract and a few months business & personal bank statements.

I don't think I had to send accounts, but wouldn't have been a problem anyway as I have 3 years now.

[Peter Loew]

Affordability based on contract rate. Had to supply current contract and a few months business & personal bank statements.

I don't think I had to send accounts, but wouldn't have been a problem anyway as I have 3 years now.

Interesting, I will give Contractor Money a call and quiz them - cheers.

FYI providing 3 yrs worth of accounts is not a problem, but it is not a true reflection on your earnings and many lenders can't see beyond your personal income, as opposed to your business income.

P