Limited company director trying to get a mortgage please help!

jimjames

vlevans wrote: »

We have this for my husbands father but not for my husband as it has only been since Jan that he has been managing director. Would this still be acceptable?

I am currently completing a mortgage application and it asks for 3 months worth of payslips. Have they given a reason why they need 3 years of pay history if he asks to be treated as an employee not shareholder?

kingstreet

vlevans wrote: »

We have this for my husbands father but not for my husband as it has only been since Jan that he has been managing director. Would this still be acceptable?

You'd have your husband's pay record as an employee, you'd have the accounts for the business, the only thing you'd be short of is a dividend record for your husband but the accounts of the business would show the dividends it has sustained over the three year period the accounts show.

If you also have an accountants letter and certificate and projection which you used with Abbey, you should have more than enough.

Any chance of getting that deposit up a bit? That would really stand you in good stead!

Halifax criteria on self-employed and directors;-

If client has a shareholding of 25% or greater share in the company through which their income is derived, we treat them as self employed.

If client’s shareholding is not 100%, need to establish if declared net profit is the full 100% or client’s share of profit. We require verification of 3 years income by way of SA302s, accountants reference or accounts. For Limited companies we use the combined figures of dividends plus drawn salary and if income verification required these must be confirmed by the accountant. If accounts received do not clearly confirm income we will require SA302s or accountants reference.

I'm not convinced Halifax is the right lender, I just wanted to show the reasoning appears to be a little less restrictive than Abbey. I'm with SPM. A broker should be able to place this fairly quickly.

kingstreet

vlevans wrote: »

we've had a broker dealing with it for us from the begining, the mistake I think we've made though is going with the estate agents mortgage advisor which on reflection we should not have done.

Is he independent/whole market?

If he is, you should be fine. If not, his restricted panel means he'll be floundering around trying to place it with the likes of Nationwide, Northern Rock etc and they aren't the logical first port of call for a case like this.

You should have been given an Initial Disclosure Document at the outset which shows if you are getting whole market, panel, or single-lender advice and information.

vlevans

kingstreet wrote: »

You'd have your husband's pay record as an employee, you'd have the accounts for the business, the only thing you'd be short of is a dividend record for your husband but the accounts of the business would show the dividends it has sustained over the three year period the accounts show.

If you also have an accountants letter and certificate and projection which you used with Abbey, you should have more than enough.

Any chance of getting that deposit up a bit? That would really stand you in good stead!

Halifax criteria on self-employed and directors;-


I'm not convinced Halifax is the right lender, I just wanted to show the reasoning appears to be a little less restrictive than Abbey. I'm with SPM. A broker should be able to place this fairly quickly.

Unfortunately the deposit is every last penny we can scrape together so 15% really is the limit. Will my husbands previous P60's be ok to use even though his salary has doubled since he took over in Jan? We also have copies of all the documents the accountant has sent to Santander
I'm assuming the broker we are using is not whole of market as we were never given or shown any documentation, but she does seem to be trying all the High street lenders which makes us think she isn't who we should be speaking to.

kingstreet

vlevans wrote: »

Unfortunately the deposit is every last penny we can scrape together so 15% really is the limit. Will my husbands previous P60's be ok to use even though his salary has doubled since he took over in Jan? We also have copies of all the documents the accountant has sent to Santander
I'm assuming the broker we are using is not whole of market as we were never given or shown any documentation, but she does seem to be trying all the High street lenders which makes us think she isn't who we should be speaking to.

You're building up an overall picture of your husband's stable earnings with the same firm over the last three years. I'm not suggesting they are going to base all the lending decision on them, that's why all the other pieces in the jigsaw are important. If you do get another broker, they may be able to suggest other things which might support the overall quality of your application and convince an underwriter to sign their name to your offer.

Who's the agent/chain the "adviser" works for? It should be easy to establish what service you are actually getting.

vlevans

kingstreet wrote: »

You're building up an overall picture of your husband's stable earnings with the same firm over the last three years. I'm not suggesting they are going to base all the lending decision on them, that's why all the other pieces in the jigsaw are important. If you do get another broker, they may be able to suggest other things which might support the overall quality of your application and convince an underwriter to sign their name to your offer.

Who's the agent/chain the "adviser" works for? It should be easy to establish what service you are actually getting.

the Mortgage advice Bureau

kingstreet

vlevans wrote: »

The estate agents she is based in is Robinson Michael and Jackson and works for the Mortgage advice Bureau

They describe themselves as offering independent advice, but their website reads;-

Mortgages are provided through a number of FSA authorised companies to which we act as introducers

There are loads of Mortgage Advice Bureau entries too. Without a FSA number I'm not sure I can find the right one.

It might be worth a call to establish who she can introduce business to.

holly_hobby

kingstreet wrote: »

You're building up an overall picture of your husband's stable earnings with the same firm over the last three years.

The problem is he has changed his position from one of employee to one of employer - and can't prove his annual salary at this point - as he hasn't b been in the position or on his new drawn salary for a year.

His position as a previous employee is important, not for proving what his previous salary was (as its irrelevant he is no longer in the position), but to prove to the lender that the business has been active for 20 yrs, he has worked there for 11 of those years, so is familiar with the workings of the co, and further more since his father has owned the co for the last 2-3 yrs.

Meaning that with your hubby's obvious experience and knowledge of the business gained from the bottom up, only strengthens his position as co director, and that there should not be any negative impact on the business as a whole since the transition.

This may help a lender take the view that the previous gross net profit (dictating available funds for salaries and dividends) will be unaffected from the change, and that the income/divs your father recd (if he was also 50% shareholder), which is now in essence being paid to your Hubby, will remain unaffected due to the management changes.

From my experience, when there has been a change at the top in a business, the lender is looking to establish that the change will not have a negative impact on the business and its income - i.e a possible negative impact would be a new director with no knowledge of the business or market within which it operates (which may affect any decisions he makes with regards to the development of the business etc) you get the idea.

My approach if I was placing this would be to spin the attention on this, and that although hubby's title and position is quite new - his knowledge of the business and its operation will ensure that the business and its income remains constant.

You may find, that a est agt mge adviser may not have had the experience or exposure to know how to present or place this.

I would definately take myself to an experienced whole of market broker ... time is of the essence I would imagine.

Although a Ltd Co is its own entity if you will, under which employess and controlling directors are paid. Controlling Directors are classed as self employed as they dictate the level of salaries, including the level of their own salary and dividend drawings.

As a ps - I know I asked earlier, but have you tried your existing lender, they already know you and may be more flexible due to your relationship with them.

Hope this helps

Holly

kingstreet

Spot on, H.

You put across what I was trying to say so much more succinctly.

Thrugelmir

Who owns the other 50% of the business?