Director of ltd by guarantee company & mortgage

hohum

Thrugelmir wrote: »

Any moron would question the business model and it's sustainability.

I can certainly see you are.

It's particularly impressive that you feel able to comment on sustainability without knowledge of the sector, looking at my accounts or our business plan.

Toddle on, son.

saverbuyer

Mortgage_Mark wrote: »

Just seen this - cannot understand why a broker would suggest you apply as self-employed with 1yr of company accounts, when the company made a loss!!!

Guaranteed fail, unfortunately!

I don't think anyone will do this on self-employed criteria whatsoever, and you'd only be able to use PAYE if you own less than 20/25% of the company....

No share in a company limited by guarantee. You can't own 20/25%. You are either a director or not.

Mortgage_Mark_2

saverbuyer wrote: »

No share in a company limited by guarantee. You can't own 20/25%. You are either a director or not.

...which is why nobody will take PAYE income in this instance.

hohum

Mortgage_Mark wrote: »

...which is why nobody will take PAYE income in this instance.

I was thinking about this last night. I have no share of the company as there are no shares to earn. The company is a legal entity, which I and two other have guaranteed (to a low sum). Any profit should be reinvested in the company.

Could you explain why no-one will take PAYE income if I have no share of the company?

ETA would one not enter me as director, and share of company as 0%? As this is less than 25%, that would mean payslips are acceptable?

Mortgage_Mark_2

hohum wrote: »

I was thinking about this last night. I have no share of the company as there are no shares to earn. The company is a legal entity, which I and two other have guaranteed (to a low sum). Any profit should be reinvested in the company.

Could you explain why no-one will take PAYE income if I have no share of the company?

ETA would one not enter me as director, and share of company as 0%? As this is less than 25%, that would mean payslips are acceptable?

Not necessarily no - I'd ask your broker to do a little more digging as he has made a bit of an error in the first place, I reckon.

(We aren't allowed to give any information that is seen as 'leading' on the forum, but your situation is far more complex than being able to answer online anyway, I would suggest)

hohum

Mortgage_Mark wrote: »

Not necessarily no - I'd ask your broker to do a little more digging as he has made a bit of an error in the first place, I reckon.

(We aren't allowed to give any information that is seen as 'leading' on the forum, but your situation is far more complex than being able to answer online anyway, I would suggest)

Missed this reply! Thanks Mark. I'm not totally confident he quite has his head round the ins and outs of the situation. Hm. Well I shall have a chat with him and see whether i think we should proceed. I think I'm trying to work out whether my situation is just not viable - had not anticipated that company set up would cause banks to brain melt quite as much as they have - or that my broker is not up to handling this. Is difficult to tell when it's first time engaging with mortgage process!

in other news, the lender still has my damn valuation fee and has not returned it :mad: I am assuming as the valuation was never carried out, the fee would be returned. Being refused on grounds of sustainability/ affordability when they have had £465 of my money for almost a month is somewhat galling.

hohum

An update to this thread.

After checking mem & arts of my company, I resigned as director. I fully intend to resume my position as director of the company in our new financial year (we don't run April to April).

We then submitted an app to Accord using my PAYE income once I was off as director. After all the palaver with accounts etc, it does make me smile that all they wanted were my bank statements and a payslip. Risk to my income is the same, same job, same liability if the company folds (as we are ltd by guarantee and we have no business debts) but didn't even quibble.

They also offered us the original requested amount of £72k over 15 years, as opposed to original app insisting it was over 30 years. After inwardly smirking, I suggested we go to 20 years as the monthly repayments on variable rate would be too much over 15 years.

It's taken a while but just got offer of mortgage this AM on a two year fix with Accord. Yes, I know, their rates for existing customers are not great once fix ends. However with easily achievable overpayments (at fixed rate, repayment is £100 less a month than our rent) we can put ourselves in the next bracket of loan to value in 2 years, even at the reduced purchase price base value. With needed improvements on the house - which we will use remaining gifted cash available to us to do - I expect we should be in a good position to remortgage.

So thanks to the person who suggested looking at submitting as PAYE/ stepping down. My broker did not cover himself in glory, but he did the legwork so I don't resent the fee as I'm sure he's barely at minimum wage with the time this has taken! It's just unfortunate we were the people he got to learn about this with, as I'm sure there's other ways to handle applications like ours. However, if there's anyone who happens to have similar circumstances am updating to note this was an option that worked for us.

saverbuyer

hohum wrote: »

An update to this thread.

After checking mem & arts of my company, I resigned as director. I fully intend to resume my position as director of the company in our new financial year (we don't run April to April).

We then submitted an app to Accord using my PAYE income once I was off as director. After all the palaver with accounts etc, it does make me smile that all they wanted were my bank statements and a payslip. Risk to my income is the same, same job, same liability if the company folds (as we are ltd by guarantee and we have no business debts) but didn't even quibble.

They also offered us the original requested amount of £72k over 15 years, as opposed to original app insisting it was over 30 years. After inwardly smirking, I suggested we go to 20 years as the monthly repayments on variable rate would be too much over 15 years.

It's taken a while but just got offer of mortgage this AM on a two year fix with Accord. Yes, I know, their rates for existing customers are not great once fix ends. However with easily achievable overpayments (at fixed rate, repayment is £100 less a month than our rent) we can put ourselves in the next bracket of loan to value in 2 years, even at the reduced purchase price base value. With needed improvements on the house - which we will use remaining gifted cash available to us to do - I expect we should be in a good position to remortgage.

So thanks to the person who suggested looking at submitting as PAYE/ stepping down. My broker did not cover himself in glory, but he did the legwork so I don't resent the fee as I'm sure he's barely at minimum wage with the time this has taken! It's just unfortunate we were the people he got to learn about this with, as I'm sure there's other ways to handle applications like ours. However, if there's anyone who happens to have similar circumstances am updating to note this was an option that worked for us.

That was me. Best of luck, glad it worked out for you.