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Mortgage Query - Paye income with side SE Earnings

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  • 02-08-2018 11:41am
    #1
    lisa_celtic
    Registered Users Posts: 682 ✭✭✭


    Hi All,

    Quick questions and really hope some one here has experience or advice.

    My husband and I are both PAYE workers, on the side of this we both do freelance work declared to revenue. This only started this year.

    We hope to apply for a mortgage next summer (2019) we will have all loans cleared and a 10% deposit in place.

    I am just wondering how thus works are we treated as PAYE or Self Employed.

    If Self Employed we wont have a couple of years accounts only year 1.

    Does anyone have experience?


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    #2
    dennyk
    Registered Users Posts: 1,701 ✭✭✭dennyk


    Are you looking for a loan amount that would require taking your SE income into account? If most of your income is PAYE and you'd be looking for less than 3.5x your annual PAYE earnings, I wouldn't think they'd care about your SE income at all.


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    #3
    steamsey
    Registered Users Posts: 686 ✭✭✭steamsey


    I think you stay PAYE but (from revenue.ie) If your taxable non-PAYE income exceeds €5,000, or your gross non-PAYE income exceeds €30,000, you must register for self-assessment. I don't think this constitutes a move away from PAYE, but adds self assessment to your tax requirements.

    From a mortgage perspective, non paye income of course can be considered. I know of cases where rental income was considered by a bank.

    I think they look for how guaranteed the income is, is there a contract / lease etc and can you show regular receipts of money from this income stream. In the case I mentioned above, the bank only considered 80% of the rental income as income for the purposes of a mortgage application - it could be the same for your income.

    Best advice - get a good mortgage broker.


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    #4
    lisa_celtic
    Registered Users Posts: 682 ✭✭✭lisa_celtic


    steamsey wrote: »
    I think you stay PAYE but (from revenue.ie) If your taxable non-PAYE income exceeds €5,000, or your gross non-PAYE income exceeds €30,000, you must register for self-assessment. I don't think this constitutes a move away from PAYE, but adds self assessment to your tax requirements.

    From a mortgage perspective, non paye income of course can be considered. I know of cases where rental income was considered by a bank.

    I think they look for how guaranteed the income is, is there a contract / lease etc and can you show regular receipts of money from this income stream. In the case I mentioned above, the bank only considered 80% of the rental income as income for the purposes of a mortgage application - it could be the same for your income.

    Best advice - get a good mortgage broker.

    We're good on the revenue wide, I made sure to do all that above board from the start.

    We just don't want the banks saying no as we don't have two/three years of SE accounts.

    Would rather it based on our PAYE guaranteed income, but a little top up from the SE would prob get us to our dream house faster!


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    #5
    lisa_celtic
    Registered Users Posts: 682 ✭✭✭lisa_celtic


    dennyk wrote: »
    Are you looking for a loan amount that would require taking your SE income into account? If most of your income is PAYE and you'd be looking for less than 3.5x your annual PAYE earnings, I wouldn't think they'd care about your SE income at all.

    At the moment any houses we have been thinking about are within 3.5 times our income....


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    #6
    awec
    Administrators Posts: 53,829 Admin ✭✭✭✭✭awec


    lisa_celtic wrote: »
    At the moment any houses we have been thinking about are within 3.5 times our income....
    Yea but what income?

    3.5 times your PAYE income or 3.5 times your PAYE + freelance income?

    If its the second I would imagine the bank to insist on seeing accounts.


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    #7
    lisa_celtic
    Registered Users Posts: 682 ✭✭✭lisa_celtic


    awec wrote: »
    Yea but what income?

    3.5 times your PAYE income or 3.5 times your PAYE + freelance income?

    If its the second I would imagine the bank to insist on seeing accounts.

    Sorry 3.5 PAYE income.

    So by next summer basicly we will be good to go based on our PAYE income but my fear was this new SE income would affect our borrowing


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    #8
    awec
    Administrators Posts: 53,829 Admin ✭✭✭✭✭awec


    lisa_celtic wrote: »
    Sorry 3.5 PAYE income.

    So by next summer basicly we will be good to go based on our PAYE income but my fear was this new SE income would affect our borrowing
    In that case it'll help and won't hinder.

    Once you aren't reliant on the freelance income you're good I think.


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    #9
    polydactyl
    Registered Users Posts: 853 ✭✭✭polydactyl


    I had paye plus Additional earnings of one year (most forms say 3 years acc) we went to KBC and they just did the calculations with and without the extra earnings and it didn’t matter that I didn’t have 3 years acc. They just wanted whatever accounts I had and in the end I didn’t need them factored in


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    #10
    utmbuilder
    Registered Users Posts: 471 ✭✭utmbuilder


    The bank to a credit check after that they only have access to what you give them

    They won't look at your self employed incomes if your doing it as paye so no it won't stop you getting a mortgage as a paye worker ,

    If you do it with your own bank less paperwork may be required such as p60, and maybe just pay slips and salary cert will be asked for


    Just pay your rent and save for 6 months In your current account before you apply, don't dip into savings

    Don't move house don't change jobs, if your getting a new build it could take a year to build and the builder won't tell you this so mortgage gets checked again after 6 months

    After you get your house consider business insurance or going ltd as you have a assett now, your customers could sue if your soletraders


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