Mortgages for company directors with retained profits.

Wigglybeezer_2

We have had an offer accepted on the flat below ours with a view to converting back to one house, it's a one time only opportunity. Unfortunately we have been naive when it comes to mortgages, we gave a rough guide of our income to our broker and he said we would be able to get us a 75% mortgage, HOWEVER... We are directors of a limited company and pay our selves a small salary and take out a small amount in dividends ( don't need a big income as we paid off our previous mortgage early, thrifty types).
We were conflating gross company profits with income completely different things from a mortgage point of view. It doesn't look as though we can get a mortgage anything like big enough even though the amount we want is very affordable for us.
I wish we had taken out more dividends and stuck the money into ISAs now, ironically we have not sorted this all out because we have been so busy recently, in fact by this time next year we may have almost enough to purchase the property for cash ( would be daft to have no savings for emergencies though) but it will be sold by then.
The only thing I can think to do is to take out as big a dividend as we can when we get paid for our recent contracts ( realistically, the new year) leaving enough to pay tax etc. and have a huge deposit. Anyone have a better idea.

ACG

Have you spoken to your broker?

There may be a couple of ways to get this to work, one would be looking for a lender who will accept retained profits (and there are 1 or 2), another would be to take a short term bridging loan until xmas time when you can look at other mortgage options.

Either way a broker is the best bet for you to be able to obtain what your after.

Wigglybeezer_2

We have a broker, will have to check if he has tried those avenues.

ACG

Dont hold me to them, im just throwing potential ideas out there.

But as things currently stand i would say there are a few options to atleast look into.

holly_hobby

There are a couple of lenders, that for controlling directors, will look at your share of net profits & renumeration.

I would expect your broker to know whom they are.

Whether they would be happy with the planned merger of their security with another unit and the impact it will have on various issues surrounding their charge etc, is another matter though (if this is revealled to them during the course of the application of course).

Given the probs lenders can have, exercises such as this are usually on unencumbered mge free) properties, which are later sold on or remortgaged (repaying incurred debt etc,) by the owner/developer, once it is a single residential dwelling (under 1 title deed).

Again, I would expect your broker to be aware of and have discussed the issues surrouding this with you.

Hope this helps

Holly