Mortgage for a Contractor?

[JMR]

I would be grateful if anybody could give opinions on the following,
I am a proprietary company director (Engineering Contractor) with a stable contract on a customers site.
The company has taken in approx €110K p/a for the last 3 years which gets divvied up roughly as follows:
€60K salary,
€10K declared as salary to my wife,
€12K pension,
€25K declared as expenses.

My wife also works part time and earns about €18K
We have approx €150K - €200K equity built up in our current house which we bought as first time buyers 7 years ago. We also have savings of approx €25K and no other loans.

We are now thinking of making a move to a bigger house but haven’t got a clue about what level of borrowings we could hope to achieve. Also, I had a staff job 7 years ago so am not sure of the implications of being a contractor when it comes to looking for a mortgage.
We are looking at houses around the €600K mark, is this achievable based on the above?
Am I limited by being a contractor in any way? Will all lenders deal with contractors?
All help / opinions / ideas greatly appreciated

 

[LDFerguson]

As you evidently have three years' accounts available for your business, there should be no issue with your contractor status, provided the income is reasonably constant.

Assuming you're young enough to qualify for a 25 year mortgage, (age 35 or under), I'd say you could get a loan of €430,000 or more which would sort you out to buy at €600,000.

Liam D. Ferguson
www.ferga.com

 

[JMR]

Assuming you're young enough to qualify for a 25 year mortgage, (age 35 or under), I'd say you could get a loan of €430,000 or more which would sort you out to buy at €600,000.

Thanks for that Liam, what calculations are you using to arrive at the figure of €430,000 and typically what repayments could I expect on this amount?

Sorry for the basic nature of the questions but I just want as much info as possible before approcahing lenders

Myself and my wife are 32 and 35 respectively

 

[LDFerguson]

€430,000 x 25 years at 4.75% (tracker variable rate) = €2,452 per month.

Rough calculations indicate that your household income is around €6,100 per month after tax. Mortgage repayment ideally shouldn't exceed 40% of net income.

Just spotted an error - at your ages, you could actually go up to a 34 year mortgage, which would bring down the monthly repayments and up the maximum mortgage. Mortgage of >€480,000 possible if you really wanted to push the boat out.