Mortgage in principal application: Company director

metso

Hi,
i'm about to ask for a mortgage in principal and as a company director, need to know what figures I need from my yearly financial statement to apply:

gross turnover

net profit

directors renumeration

dividend

thank you

ACG

Depends on the lender and loan to value.

Most will want to see 3 years accounts and possibly 3 years SA302's and 3 months personal bank statements and possibly (but unlikely) 3 months business bank statements.

amnblog

You need SA302s in most cases. (3 years if you have them) and possibly 3 years accounts.

Turnover is not of major interest, key figures are PAYE, dividends, and net profit (after expenses but before tax)

amnblog

This is a tricky area and you may well need to use a broker to get the lending you require.

Swoosh84

I got a Decision in Principle from HSBC on Friday just passed. Was massively lower than what I was hoping for.

We provided them with two years accounts and a third year projection.

They took into account the salary and then done some strange calculation based on Net Profit and Dividends to work out my 'Actual' Salary over an average of 3 years. This was a lot lower than expected!

They did not request any further information than this.

S

kingstreet

I'd typically expect director's remuneration and dividends to be added together and averaged over three years and evidenced by SA302s for that period.

74hotspur

I am ltd co director, 2 years accounts and 2 years sa302's. my broker managed to get me sorted based on my current contract rates rather than the hassle of getting hmrc stuff and accounts. Do you have a contract with anyone? If so might be worth pursuing.

ghosti

just hand over the 2/3 years of accounts if you have nothing to hide, they'll just take the numbers they need and work it all out with a calculator if theyre any good at their job

74hotspur

It all depends on the situation that he is in, an average over 3 years might not reflect his true income potential and therefor his lending amount, ie his 1st year may have been poor 2nd year ok and 3rd year excellent but due to averages 1st brings it down, it's good to see that co directors are not penalised by some lenders for being such.