Help/Advice please - Small Business Owner

Vortex1

Guys I am need of some help. My partner (not married) and I are separating after 17 years. The mortgage has always been in her name as our long term plan was for myself to buy another house but this never materialised.

We have agreed a 50/50 equity split. The plan is that I take over the house to give the children a little stability and that my partner buys a new one. I can not take over the existing mortgage because my name was never on it.

I run a small business with a turnover circa £2m. I approached a IFA via my accountant who suggested we approach Santander. The approach was made and agreed in principal. I am looking for a LTV of 29% of the house value and my salary and dividend easily covers the mortgage request. Santander then had a set of the last 2 years audited accounts. After 3 weeks they came back refusing the mortgage on two grounds. The first was that the profit had decreased over the two years (the company still made a profit) and secondly that my father has a preference share in the company still that pays £90.00 PA.

Subsequently my IFA informed me last night he has apparently approached Woolwich, Barclay's & Natwest with a similar response from each.

I could wait another 6 weeks for this years audited accounts which show a slight increase in profits on last and remove the preference share but this would mean my partner losing the house she is proceeding on and quite frankly another 3 Months of purgatory.

Is there a different route or lender I should be pursuing?

Any help or advice would be greatly appreciated.

Vortex1

Anyone please?

Vortex1

One last try

Dave_Ham

Sorry - cannot believe we all missed this and you had to ask 3 times - apologies.

Ok, so I do not want to give false hope, but given the loan to value I would expect this is achieveable.

I hate it when brokers go to multiple lenders, rather than understand the issue and solve the problem.

The preference share part should not be an issue, what we need to ascertain is what you have personally withdrawn (and paid tax on) for the last 3 years.

Many lenders now use SA302 figures, which your accountant should know and be able to get the actual reports in a matter of hours/days.

Banks historically do not like declining profits, but some will accept and just use the last figure rather than an average of the last 2/3

When you say LTV of 29%, is that actually 29% or 71% - how much are you putting down and what is the value?

I assume your credit file is ok ?(aside from potential multiple applications from current broker)

Vortex1

Thanks Dave,
House value agreed @ £540k and looking for a Mortgage of £155k. House has been valued @ between 540-595k by local agents.

My credit history is fine. To be fair to my broker he has only approached the other lenders in principal (except Santander), not with all my details so hopefully history not too scarred.

My broker has literally just told me that he has applied to the Nationwide as their treatment towards company owners with over a 20% share holding is different to other lenders. Hopefully this is correct as I have just paid £949 in fees via debit card for the application and survey.

Dave_Ham

Nationwide do not really understand fully the self employed, but given they appreciate and manage risk.

Given the low loan to value (you were correct) I think Nationwide may well accept it.

To be safe, it will cost you nothing to order your SA302's from HMRC and you have them to hand if you need to move quickly further down the line.

Best of luck

Thrugelmir

Vortex1 wrote: »

House value agreed @ £540k and looking for a Mortgage of £155k. House has been valued @ between 540-595k by local agents.

Have you made provision for stamp duty?

Vortex1

Thrugelmir wrote: »

Have you made provision for stamp duty?

Yes thanks have that covered.

Vortex1

Just an update guys, have today received my Mortgage offer from Nationwide, so if anybody is in a similar boat this will hopefully help.

Vortex1

Final update on this guys, everything went through OK with Nationwide. Hopefully this may help someone in the future.