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  • FIRST POST
    • brubaker
    • By brubaker 11th Oct 16, 8:45 PM
    • 3Posts
    • 0Thanks
    brubaker
    Mortgage Application
    • #1
    • 11th Oct 16, 8:45 PM
    Mortgage Application 11th Oct 16 at 8:45 PM
    Hi guys

    I recently applied for a Mortgage and the survey/valuation came back ok. My LTV is 70% and I am a sole director of a limited company.

    The advisor contacted me and stated that the underwriters will only accept the Mortgage if I increase the deposit. This is because they have calculated the two year average income to be 20% less. Instead of using the directors dividends and remuneration for one of the years, they have used the companies net profit instead. They will not take into
    consideration the dividend's as some of the funds (20%) have been taken from retained profits (from previous year) as it can jeopardise my on going affordability, despite the company having significant funds available to me.

    If they are to use the net profit for one year, then they should be consistent and use the net profit from the previous year which is 3 times more.

    The reason for my net profit being lower than the previous year, is because I had personal family issues and had to stop work for 4 months, which was a one off.

    My accountant tells me he has not encountered a situation before where by a Mortgage company have overlooked the physical money withdrawn from a company in favour of a net profit value – which is often seen as a subjective value.

    What are your thoughts?

    Thanks in advance.
Page 1
    • ACG
    • By ACG 11th Oct 16, 8:56 PM
    • 13,502 Posts
    • 6,648 Thanks
    ACG
    • #2
    • 11th Oct 16, 8:56 PM
    • #2
    • 11th Oct 16, 8:56 PM
    New lender?
    I am a Mortgage Adviser
    You should note that this site doesn't check my status as a mortgage adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • amnblog
    • By amnblog 11th Oct 16, 9:52 PM
    • 8,859 Posts
    • 3,374 Thanks
    amnblog
    • #3
    • 11th Oct 16, 9:52 PM
    • #3
    • 11th Oct 16, 9:52 PM
    I don't see anything surprising in this view being taken by the Lender.

    Cases like this are best handled by brokers with good self employed experience.

    Sounds like you either went direct or to a broker with limited experience of the self employed.

    With a case like this issues around retained profit and dropping income should have been considered before application.
    I am a Mortgage Broker

    You should note that this site doesn't check my status as a Mortgage Broker, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.
    • brubaker
    • By brubaker 11th Oct 16, 11:10 PM
    • 3 Posts
    • 0 Thanks
    brubaker
    • #4
    • 11th Oct 16, 11:10 PM
    • #4
    • 11th Oct 16, 11:10 PM
    The lender is actually my bank who I have been with for a number of years and have a business account with them for over 6 years.

    My Mortgage advisor is going to appeal as he agrees with me.

    They have not asked for an SA302, although I have requested one from HMRC.

    Am I wasting my time - It appears that once an underwriter has made a decision, they don't like to be told different.
    Last edited by brubaker; 11-10-2016 at 11:18 PM.
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