Hi All.
Myself and my husband are looking to get a mortgage towards the end of the year. I am a day rate contractor and he has a permanent position. I have been contracting (self-employed) for 1.5 years and help permanent positions before then for several years.
One thing we can't seem to get an answer on, without submitting all our documentation to actually apply for the mortgage, is how the 3.5 cap is calculated for self employed people. Some of my colleagues have said it's based on the gross rate received per day and others have said it's based on the salary amount @ year end on your balance sheet.
We are looking to maximize the 3.5 cap as much as possible so I'm keen to understand am I better taking a reduced salary to my personal account and keep more in the business account or should I be taking as much net salary from the business as possible to maximize that salary at year end? Which option would give us the maximum lending amount possible?
Any advice at all would be extremely helpful and greatly appreciated.
Myself and my husband are looking to get a mortgage towards the end of the year. I am a day rate contractor and he has a permanent position. I have been contracting (self-employed) for 1.5 years and help permanent positions before then for several years.
One thing we can't seem to get an answer on, without submitting all our documentation to actually apply for the mortgage, is how the 3.5 cap is calculated for self employed people. Some of my colleagues have said it's based on the gross rate received per day and others have said it's based on the salary amount @ year end on your balance sheet.
We are looking to maximize the 3.5 cap as much as possible so I'm keen to understand am I better taking a reduced salary to my personal account and keep more in the business account or should I be taking as much net salary from the business as possible to maximize that salary at year end? Which option would give us the maximum lending amount possible?
Any advice at all would be extremely helpful and greatly appreciated.