Mortgage - Director of a new ltd

JohnnyB1986

Hi forums,

I am really after some advice, the company I work for recently (September 2013) incorporated after advice from new accountants to do so (Poor advice for the past 10 years from previous accountants). In the process it was decided that I would be made a director of the new Ltd co with an ownership of 35%. I have to wait 12 months until I get my shares - I am entitled to entrepreneurs relief but am unable to claim this within the first 12 months of the incorporation.

Company had previously been trading as a partnership for 15 or so years.

My partner and I are currently looking at purchasing our first house - I currently earn a relatively depressing wage and we would be able to borrow around 180k for our first house...

My question is... would I be sensible in waiting until after I am formally made a director, where my income maybe higher, or would any lender scrutinise the company harder? ie would they only look at the period post incorporation, also how do lenders view borrowers who predominantly withdraw income via dividends? I am concerned that I would be putting myself in a worse position for obtaining a mortgage, even though my actual income would be significantly greater.

Thanks a lot in advance for your kind assistance.

amnblog

Not one that will work with most lenders Johnny.

If you need to raise funds now speak to a good broker as there may be some way to get this done - depending on overall circumstances.

JohnnyB1986

Thank you ever so much for taking the time to reply. Would time change things? Ie if I waited until such time as the LTD had 3 years accounts? The company makes a decent profit and always has done since its inception, but I appreciate they are effectively two different entities.

ACG

As a 35% shareholder you would be classed as self employed for lending purposes.

Depending on the size of your deposit you would need between 1-3 years accounts.

As an employed person you would need 3 months wage slips. As the company has been in place for 10-15 years getting accounts would not be an issue, however some lenders may have an issue with it now changing structure and you only just becoming an owner so to speak.

As amn says there could be a few ways to get ti through depending on the finer details but i would suggest a broker is the way forward (not an estate agent broker).