Lazy broker?

Dadklp

Hi,

Can anyone help us? (No debt as in literally zero), perfect credit 999 out of 999 with experian) Our problem is limited company, two years accounts, 1st year loss (16,000) (16-17) 2nd year net profit (102,000). (17-18), next year projected net (148,000) (18-19).

We have accessible savings over £600,000. Initially made an application with Halifax (we bank with them, although only have a small portion of our savings with them - after lots of back and forth underwriter said no.

We want £248,000 over 30 years, 310,000 purchase price.

We spoke to a broker 'One77' who seems to be quite lazy and has suggested Aldermore is our only hope - i'm sure they will lend to us but they are pricey.

Thanks - an apologies if this post is inappropriate, wife has found the house of her dreams and i'll explore every angle to buy it.

Advice welcome.

dibblersan

you've got £600k and want to buy a house for £310k and are 'exploring all avenues'

would that include buying the house for cash? once you own the house outright I'm sure you could find a bank to give you a loan against it if there was some reason you wanted to keep the cash assets

bigstevex

600K in savings, I assume you're getting a high return on this hence wanting the mortgage?

dunstonh

, perfect credit 999 out of 999 with experian)

Well done on getting the maximum meaningless score on Experian. Marketing has done its job well on you.

Our problem is limited company, two years accounts, 1st year loss (16,000) (16-17) 2nd year net profit (102,000). (17-18), next year projected net (148,000) (18-19).

Now that is proper information the lenders care about.

We spoke to a broker 'One77' who seems to be quite lazy and has suggested Aldermore is our only hope - i'm sure they will lend to us but they are pricey.

How much did you speak to them? Was this just a general initial chat or was this after a supply of full facts and information and research carried out?

We have accessible savings over £600,000.

So, why not use that to fulfil your wife's dreams?
You can always raise capital next year when you have two years accounts showing better income.

kingstreet

One77? Is this a newbuild?

What reason did Halifax give for the decline. With latest year and projection shown I'd expect them to lend.

Dadklp

Appreciate the quick responses. The cash savings facilitates other projects. The business we have builds affordable homes (irony?) so, we can't commit all of those funds to purchase a house as this may limit the projects we can undertake in the future. Put more simply, i may want to invest our savings into the business in the future, can't do that if I've spent it buying a house.

Also, having money shouldn't prevent me from choosing to borrow money.

It was a full fact find with One77.

Dadklp

Lack of experience in the area the business operates was the reason given for decline.

Dadklp

Looking to hold on to those funds to invest in the business if the right project presents itself. No, there isn't a particularity high return. All high street, easy access.

Dadklp

Thanks for the reply. We didn't actually 'do' anything proactive to get our meaningless scores up to 999 - that's just what they were when i used the free membership to check prior to making the application with Halifax.

That data is what i expected that lenders would use and accept - it's accurate and filed properly at companies house. Accountant has also confirmed they will provide letters if needed confirming projections for next year.

There is a project in the pipeline, that will need a significant investment (circa £300,000) in order to see its potential materialise, therefore i can't simply spend the savings to buy the house as this may actually leave us cash poor (asset rich) or even prevent that opportunity from being taken.

Surely we present as good customers?!

dunstonh

Thanks for the reply. We didn't actually 'do' anything proactive to get our meaningless scores up to 999 - that's just what they were when i used the free membership to check prior to making the application with Halifax.

The score is a marketing thing. it is meaningless to lenders. It is only used by the credit agencies to try and sell their services to you. Lenders have lent to people with scores of 300 and rejected those with 999. It is the data and lending criteria that matters.

There is a project in the pipeline, that will need a significant investment (circa £300,000) in order to see its potential materialise, therefore i can't simply spend the savings to buy the house as this may actually leave us cash poor (asset rich) or even prevent that opportunity from being taken.

So, in reality, this £600k doesnt actually exist if it has already been earmarked to be spent (or at least £300k of it). Is this money in the company or is it in personal savings?

Surely we present as good customers?!

The issue is affordability.
1st year loss (16,000) (16-17) 2nd year net profit (102,000). (17-18),

So, your track record is half your years you have been profitable and half you have made losses. Around £43,000 net profit average.

Different lenders have different ways of looking at income. Salary and dividends with some. Salary and dividends plus retained profits with others. Some will look at recent business trends. Some look purely on figures. Some will look at the business overall and your history.

I can't see why you wouldn't get a mortgage but your selection of lenders is going to be restricted.

Thrugelmir

Dadklp wrote: »

There is a project in the pipeline, that will need a significant investment (circa £300,000) in order to see its potential materialise, therefore i can't simply spend the savings to buy the house as this may actually leave us cash poor (asset rich) or even prevent that opportunity from being taken.

The asset would provide security for the borrowing requirement though.

While the business has made a profit since it's incorporation. What assets and liabilities does the balance sheet disclose. To generate a £148k profit building affordable housing. There must a considerable sum of capital tied up. Likewise the profit and cash generation are dependent on selling units, which must be a lumpy unpredictable affair on a small scale building operation.