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My partner and I are looking to buy a house as soon as possible (i.e., the second we have the deposit in the next 3-4 months). My partner is currently in full time work but we want to focus on our own business so he's ready to quit, but with that we thought that we'd lose any chance of getting a mortgage.

However, our business is a Private Limited Company which we're both employees of (it is just us at the moment) so we're no longer just self employed. Before when we were looking into mortgages (if my partner were to quit his 9-5) we were told we'd need 3 years of accounts, but now that we'd be employed by our business, would we just need to prove we'd 'worked' there for 3 months and show proof of our income? (We don't have 3 years of accounts, the business was made a Private Limited Company this year, but we will have a stable income of around £8000 per year each (ie the lower earnings limit) and will have been working there more than 3 months.)

We're only looking to spend £40,000 on a house, with a deposit of 10% - not sure if that's important or not, so just thought I'd include it anyway.

Thanks in advance!

  • added UK tag based on "pounds" reference. Someone correct if this assumption is incorrect. – JoeTaxpayer Jun 11 '12 at 14:03
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    Most likely, the bank or mortgage company will call your employer to verify employment, and when you or your partner answer the phone, some flags will undoubtedly be raised. So, you may well have to provide "3 years of accounts" for your Private Limited Company or its predecessors to show that this enterprise has been profitable for some time. See also the answers and comments on this question. – Dilip Sarwate Jun 11 '12 at 15:51
  • In the United States, it would not be a deal-breaker, provided the company is making enough money. If anyone can find the equivalent UK tax forms for a the IRS_1065 for partnerships and IRS_K-1(1065) for shareholder earnings from said partnership, those would likely be what one would be expected to provide. usually 2 years of tax returns showing positive net profits is sufficient to continue the underwriting process as if one was "employed by others". – user6610 Jun 16 '12 at 1:39
  • Being employed by a company you own is self employment – Neuromancer Jan 14 '14 at 13:15
  • The fact you are only "earning" £8K per year each while working a job that on the open market would command a much higher salary is going to make it pretty obvious to the banks that you are working for your own buisness. – Peter Green May 27 '16 at 3:16
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When getting a mortgage it always depends on the bank and each bank may be more or less strict. With that being said there are rules and general guidelines which can help you understand how you fit in the world of mortgage approvals.

If you can provide the same paper work as an employee of your company that you would normally provide from any other company then a bank may just accept that alone.

However to me it seems like you will be looking at a new variation of what was known as a Self-certification mortgage

A self-certification mortgage is basically a mortgage for those who cannot prove their income.

As a result of the housing collapse, the rules on a traditional self-cert mortgages have changed. As someone who is self employed, it is more difficult today to get a mortgage but is still possible.

This article provides some good information:

Can the self employed still get a mortgage?

I advise doing some research on this topic and speaking with a professional mortgage broker.

Some Resources:

Compare Self Cert Mortgages

How to beat the mortgage famine in 2012

Can the self employed still get a mortgage?

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