My client wants to increase her pay temporarily

She is applying for a mortgage and wants to improve her prospects

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Client is one of 2 directors in a husband and wife company and has asked me if she can award herself "a short-term payrise for the purposes of increasing my borrowing potential". While obviously she is free to award herself whatever salary the directors wish I would not wish to be implicated in a possible mortgage fraud and would be interested to hear what the community feels about this position as it strikes me this situation must arise quite frequently

Replies (11)

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By carnmores
16th Oct 2020 12:46

The mortgage company will look at the accounts and affordability. We dont have enough info anyway such as what is the arrangement with the husband

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Slim
By Slim
16th Oct 2020 12:57

In my experience the mortgage companies will look beyond salary, they arent silly enough to base it on 3 months wage slips or a letter.

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By Justin Bryant
16th Oct 2020 13:06

Mortgage fraud smorgasbord. Even better to do a BBL and get a pay rise from that

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By SXGuy
16th Oct 2020 13:07

Ltd Co. The lender will look at the accounts and retained profit as well so in theory increasing wage does nothing. If available funds are there any way they will probably still take that in to account.

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Replying to SXGuy:
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By I'msorryIhaven'taclue
16th Oct 2020 13:20

So picking up on that, a dividend might be a safer route OP (safer, that is, for you). I'm assuming there are still lenders out there who will regard an "annual" dividend as income for affordability purposes.

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Replying to I'msorryIhaven'taclue:
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By SXGuy
16th Oct 2020 15:26

Possibly yes. I know my lender natwest were happy to see dividends but only after looking at the accounts to see whether there's enough retained earnings each year to issue those dividends.

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By Paul Crowley
16th Oct 2020 13:19

Not really your problem
She controls the company and can do what she likes
But lender likely to ask for 6m personal bank statements

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Replying to Paul Crowley:
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By carnmores
16th Oct 2020 13:22

Very droll but true so much paper needed

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By JD
16th Oct 2020 14:07

Lender asking for Accounts/Accountants certificate - We are assuming that she has actually disclosed she is a company director/business owner.

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Replying to JD:
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By Paul Crowley
16th Oct 2020 15:36

Lenders tend to treat them as self employed
Based only on recent requests

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By sebo
17th Oct 2020 10:58

Thank you all for your contributions. I will dissuade her from going down this route

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