Advice on getting a mortgage as limited company director

dale15

Hi everyone... a lot of helpful people here lending their time and expertise for free. Any assistance with my situation would be gratefully received.

I'm self-employed as the sole director of a limited company with records for almost 3 years and I'm getting a mortgage with my brother. We're booked in for a mortgage application with HSBC but I'm only now discovering it might be tricky... which is my fault.

Business has been good but I've tended to leave my money in the business account as a buffer for potential lean times (none so far). I've only taken about 1/2 the profits out in dividends and salary and if that's all HSBC look at we might struggle to meet the price of the house we've agreed a figure for (we got a mortgage in principle by quoting my business' annual turnover... again my own fault).

If anyone is in a similar situation or has any advice to help us try and get this through it would be very very much appreciated.
— I'm assuming not, but is there anything we can say to HSBC to get them to take the company's profits/turnover/account balance into consideration? Both my personal and business accounts are with HSBC.
— Would a bigger deposit help? Might be able to go from 75% LTV to 65% if I clear out the company's coffers this week.
— Is a broker/specialised lender going to be the best way forward?

Thanks everyone!

amnblog

HSBC should consider the average of your last three years profit plus your annual PAYE (regardless of whether you take in in dividend or spend it).


If your profit drops they will look at only the recent poorer years figures.


If your business does not Bank with them, take 3 months business bank statements along.


That, said, they are tricky - but if you do run into problems, any sensible Broker with decent self employed experience should be able to assist you.

dale15

amnblog wrote: »

HSBC should consider the average of your last three years profit plus your annual PAYE (regardless of whether you take in in dividend or spend it).


If your profit drops they will look at only the recent poorer years figures.


If your business does not Bank with them, take 3 months business bank statements along.


That, said, they are tricky - but if you do run into problems, any sensible Broker with decent self employed experience should be able to assist you.

Thanks for the input amnblog, profits have been on the up, though since September I only have statements to prove it rather than audited yearly accounts.

Business acc is with HSBC so I'm hoping they are able to take it into consideration.

frazell

If you don't have audited accounts for the year then some lenders (maybe all) will accept a letter from your accountant detailing your earnings.

When I requested a loan advance from Santander they had a form which my accountant filled out and signed to show my Limited company profit, turnover etc.

In my case, I could ask my accountant to produce my yearly accounts early if I really need it and they do this as part of their normal fee structure, so I don't incur additional cost.

dale15

frazell wrote: »

If you don't have audited accounts for the year then some lenders (maybe all) will accept a letter from your accountant detailing your earnings.

When I requested a loan advance from Santander they had a form which my accountant filled out and signed to show my Limited company profit, turnover etc.

In my case, I could ask my accountant to produce my yearly accounts early if I really need it and they do this as part of their normal fee structure, so I don't incur additional cost.

Thanks Frazell good to know.

squirrel99

I am a limited company director as well, mortgage application proved to be tricky. I am contracting for less than 12 months, so don't even have full year accounts.

Finally went through contractor broker who got me sorted in less than 2 weeks! My recommendation is Freelancer Financials (I dealt with Nudim). Check out their Google reviews, most customers seem to be really satisfied.

dale15

squirrel99 wrote: »

I am a limited company director as well, mortgage application proved to be tricky. I am contracting for less than 12 months, so don't even have full year accounts.

Finally went through contractor broker who got me sorted in less than 2 weeks! My recommendation is Freelancer Financials (I dealt with Nudim). Check out their Google reviews, most customers seem to be really satisfied.

Thanks for the input squirrel, going to get a broker lined up in case this falls through. Hoping the fact that it's a joint application with someone with a 'proper' job, and a large deposit, and having all my accounts with HSBC will push us over the line... but we shall see!