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Ask an Expert Will Banks accept dividends and low salary for mortgage purposes?

Will Banks accept dividends and low salary for mortgage purposes?

Q: Myself and husband are sole owners of my company. Me 75% share holder. I take the minimum dividends to keep personal tax low. I have a property which I am selling at £800,000 and I wish to buy another at £1,1950,00. I have a mortgage at £315,000. The co

A:

From the information you provided it appears that although the company makes a net profit of £120,000 per annum you are not taking all of this and are leaving most of the profit in the company. If this is the case there are lenders that will recognise this and be able to help you, if you are majority shareholders, which you clearly are. However some Banks will only use salary and dividends for mortgage purposes which by the sounds of things may not work for you, so I suggest we arrange a convenient time to talk and we can work out the best solution for you. If your accounts consistently show a net profit of £120,000 I should be able to get you the £400,000 you require.

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