limited company and mortgage

lollypink

hi all,

wondered if you can offer any advice,

have recently applied for Mortage with Coventry BS, I have one myself already and looking to port the mortgage to new house and make it joint one with my partner. We are both self employed, she is a sole trader and I am sole director of limited company.

We are hoping for mortgage of £240k on house that had offer accepted at £290k we have £50k deposit.

I haven't missed a payment of my current mortgage my credit file is excellent and so is my partners. However I know the bank see self employed as a massive risk.

My partners last two years income as sole trader were around 18k and mine were 42k in 2014/2015, 34k in 2015/16 and 71k 2016/17.


However I keep all the money in my business bank account (which usually has around 40k in it ) and only pay myself a minimum, so now I'm concerned that it looks like I don't have enough in my personal account to pay the new mortgage, I literally just pay myself enough to cover my bills. I am also embarrassed to say that I went over my overdraft twice in two months, I put money in the same day to cover but I am aware that it looks really bad to mortgage companies. I have since paid my overdraft off.

We are waiting for CBS to do the valuation but aren't hopeful that we will get an offer. Is there any point to going to see whole of the market broker or should I just pull out of the house purchase and have three months of putting a salary from my business into my personal account and then try again - my bank account will obviously look healthier then

Any thoughts welcomed x

Lilla_D

Ok, your situation is not as bad as you think Coventry is actually perfect for you.

If you applied via a broker, then you will be fine based on the figures and assuming no big credit commitments and/or maintenance payments and that the new property is acceptable for Coventry BS. Don't worry about the overdraft too much.

If you applied for the porting direct, then you're at the mercy of the person who's doing it within Coventry whether they are actually using the correct income figures or not, but let's hope that they do and you'll be just fine.

amnblog

A lot will depend here on whether the figures you quote are your respective total revenues, or profits.

Lilla_D

amnblog wrote: »

A lot will depend here on whether the figures you quote are your respective total revenues, or profits.

True - I assumed it's revenue, so even if we assume £40k profit + salary (i.e. massive amount of expenses in the last year), the figures would work. I did a quick calc before replying.