Getting a mortgage at 19

scythe2003

OP

Given your age and declared income, they honestly might. (caveat: I've never been involved with mortgage underwriting myself, but spent many years in credit & risk functions where the principles are the same).

My best advice would be to speak to a financial advisor about what you want to do. Be honest with them and they will steer you right. They may even know lenders that are more open to younger borrowers.

Thank you for the advice and help!

EDIT: It is possible to change the declared income. 40k was just so the bank is sure I can pay off the mortgage. If it is too much, I can ask for a demotion :tongue:

(edited 1 year ago)

Reply 21

londonmyst

19

Original post by Sabertooth

Damn I hope not!

Where I used to live, prices went up by about $150,000 on an average house in 2 years. Obviously prices will not continue to rise at such a rate but I just bought my first house in a very popular area so I'm hoping the location will be secure against any kind of property crash. :crossedf:

I'm not sure whether there will be a property crash in canada or the usa within the next 2-3 years, I'm anticipating one within the uk.

I'm told that the bank borrowing standards in the uk for loans and large credit facilities are very different than canada & the usa.
Canadian banks tend to favour the strictly prudent approach and the usa is more focused on citizenship & collateral value than borrower history.
The uk seems to primarily focus upon credit history, harsh affordability checks and at least 3+ years of full time monthly waged employment history with few/no gaps.

Reply 22

Muttley79

20

Original post by scythe2003

I know there's a lot of scrutiny, my dad buys property under the company name (I believe the rent money becomes exempt from tax this way?) and he moans a lot about it. I never knew it's as strict as you make it out to be. I'll talk to the company accountant and discuss my options.

How will you show you've been working for three years and have documents to prove it. Honestly any lender is going to run a mile; just wait until you graduate. Who is going to manage your property in London btw?

(edited 1 year ago)

Reply 23

chazwomaq

18

Original post by scythe2003

If my father starts paying me 'wages' over the next few months (let's say, 6 months?) at 40k/yr should I be fine then?

I don't think inverted commas count for much when your fraud case come up...

Reply 24

marple

15

Original post by scythe2003

I know there's a lot of scrutiny, my dad buys property under the company name (I believe the rent money becomes exempt from tax this way?) and he moans a lot about it. I never knew it's as strict as you make it out to be. I'll talk to the company accountant and discuss my options.

If the company accountant doesn't tell you it's a bad idea. your father should look for professional advice elsewhere. You are proposing to commit mortgage fraud. https://www.actionfraud.police.uk/a-z-of-fraud/mortgage-fraud

You are putting you father in a vulnerable position. Yes, he can add you to the payroll and pay you whatever salary you need to justify the mortgage multiple, but do you really think it is that simple? HMRC has no issues with businesses employing family members, but they are expected to do work to justify the salary, so you working for a few weeks a year or even hours a week at say £15/hour is one thing, but an inexperienced 19 year old at £40k a year will have HMRC rubbing their hands with glee at the next payroll inspection. You are not a full time employee, you are a full time student and it is simply a lie to pretend anything else. Are you proposing to keep the salary or somehow repay it to your father or his business? This gets you into deeper water. Ghost employees salaries reduce a businesses net profit and thus the corporation tax payable. Defrauding the Inland Revenue is a criminal offence.

Why on earth can't you wait and do things properly - graduate and work for your father full time in a real, productive roll then look to get a mortgage without all the lies. This also gives you time to research your options and find out how to run this as a business and consider the tax implications so that you can make sure you run things properly and understand how the tax system works. FYI rent money does not become exempt from tax because the property is held in a limited company...

Reply 25

-Laureliz-

14

It's great that you're thinking ahead, but there are a few potential issues with your plan. First, becoming an employee of your father's company may raise questions about your true income source. Banks often verify employment status. Second, being a full-time student while claiming full-time employment could be problematic. It's essential to be transparent with the bank to avoid complications in the mortgage approval process. Consider consulting a financial advisor for guidance.

Getting a mortgage at 19

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