Getting a mortgage with trading profits ?

[rjay]

Over the past few years my trading income has grown and my self-employed work has reduced. Currently, I trade using spread betting so obviously this is not counted as taxable income.

However in the next couple of years I'll need to get a new mortgage. I think I'm right in saying that its very unlikely that any lender would even look at spread betting accounts as proof of income. So I may need to look at either CFD's or trading through my limited company (whose business is already related to forex and spread betting anyway).

Does anyone have any experience of using trading profits to get a mortgage in the past 12 months or so ? A lot has changed in the two years since I last got a mortgage ....

 

[ffsear]

I tried, and struggled hugely! I ended up going back to work for a year because of this.

 

[rjay]

Yikes Did you consider the idea of trading through a limited company and paying yourself dividends &/or salary ?

 

[NVP]

not worth the Hassle dude...............keep a day job to cover any mortgages/loan needs etc etc

N

 

[ffsear]

Yikes Did you consider the idea of trading through a limited company and paying yourself dividends &/or salary ?

I don't want to pay tax

 

[rjay]

I don't want to pay tax

So you preferred going back to 9-5 rather than paying tax ? Not something I could do ...

 

[rjay]

not worth the Hassle dude...............keep a day job to cover any mortgages/loan needs etc etc

N

I don't have a salaried day job (and never have). I'm completely unemployable I think.

 

[wallstreetwarrior87]

Just a question:

If you are making consistent profits from your activities, why not increase your trading size a tad, and then not bother with a mortgage.

I know it depends on the size of the debt, but if you have been doing this long enough and have proven to yourself that you can consistently make a living, can you not just increase your size?

Its a genuine question and would honestly be interested to know why you haven't considered this (maybe you have).

If its paying tax you're worried about;

If you have a spouse that works; what about splitting your SB account into their name, and you set up yourself as a trading company (direct access). You control your trading company on smaller pot, pay your tax on that, and your spouse keeps "their" profits tax free.

I have a few colleagues whom do this, and as long as 1 of you is "working" it will be very hard for anyone to come and claim tax (on the profits), as the law is on your side (all in black and white).

Some people will tell you, you cant do this and you cant do that, but I know people who indeed do this, so until proven otherwise I would not worry about it. The worst that can happen is, the powers that be change the law and your spouse have to pay tax (if realised profits are bigger than losses of course, and that's another can of worms:cheesy

Something to consider maybe?

 

[wallstreetwarrior87]

Over the past few years my trading income has grown and my self-employed work has reduced. Currently, I trade using spread betting so obviously this is not counted as taxable income.

However in the next couple of years I'll need to get a new mortgage. I think I'm right in saying that its very unlikely that any lender would even look at spread betting accounts as proof of income. So I may need to look at either CFD's or trading through my limited company (whose business is already related to forex and spread betting anyway).

Does anyone have any experience of using trading profits to get a mortgage in the past 12 months or so ? A lot has changed in the two years since I last got a mortgage ....

Also one of the key issues with mortgage companies is consistency, If you were depositing a set amount every month as an employee for "your company" and have been doing so for a set period of time then you should not have an issue.

You could be a "sales person" for the company and get paid a "set" monthly salary, going directly into your bank account.

There are many lenders out their, all having their own risk parameters, if you are creative in the way you approach your situation, you should not have a problem.

Remember the company does not have to be under your name

 

[rjay]

Also one of the key issues with mortgage companies is consistency, If you were depositing a set amount every month as an employee for "your company" and have been doing so for a set period of time then you should not have an issue.

You could be a "sales person" for the company and get paid a "set" monthly salary, going directly into your bank account.

There are many lenders out their, all having their own risk parameters, if you are creative in the way you approach your situation, you should not have a problem.

Remember the company does not have to be under your name

When you say "company" are you suggesting trading through a limited company? Most lenders won't regard you as an employee if you own the company, and I'm pretty sure even if your spouse owned the company.

 

[rjay]

I know it depends on the size of the debt, but if you have been doing this long enough and have proven to yourself that you can consistently make a living, can you not just increase your size?

The size of the debt means I wouldn't be able to pay it down just by increasing trading size.

 

[ryandj2222]

Are your trading profits consistent or do they vary? Do you pay yourself a dividend out of your trading pot each month? Can you show this on bank statements? It might help.

I know if you are self employed, which you are, then mortgage companies want to see at least 3 years of accounts to determine how much income you make from it. Hopefully they would treat trading the same way

 

[malaguti]

When you say "company" are you suggesting trading through a limited company? Most lenders won't regard you as an employee if you own the company, and I'm pretty sure even if your spouse owned the company.

yes they will. if you "own" the company you can still be a salaried employee. Dividends is simply another taxable income.

 

[Liquid validity]

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