Help needed fast for Company Director

Meerkat47

My partner & I are buying a new build house and should be exchanging contracts in 2 days. My partner had a mortgage offer in writing from Halifax Building Society. However they have now retracted their offer after sending details to their underwriter.
The situation is this - my partner was a Company Director and shareholder in one company for the past 3 years. 18 months ago he also became a Company Director and majority shareholder in another company. Whilst the second company was starting up the first company paid his salary up until April this year. He then resigned from the first company in May (sorry, a lot of detail I know)
The problem we have getting the mortgage is that Halifax say as he is a Company Director he is classed as self employed and therefore will not consider his salary that he was paid from 1st Company. They say they will review the mortgage appllication in April when his salary has been paid out of company no 2 for 12 months. Obviously that is too late as we are due to move into our new house beginning of February! Is there any chance of him getting a mortgage before then? Time is of the essence as if not we will lose our deposit from builder and also the money we have paid towards our options and solicitors fees etc. In total around £7k!

ACG

I would forgte company 1 for the time being as it no longer relevant (there may be exceptions to that but I would worry about that if we are desperate).

If he has been a director for company 2 for 18 months, how much did he take in PAYE and dividends up until April 2018 and in the latest financial year.

How much is your income?
How much is the mortgage you want?

Meerkat47

Hi ACG - His salary is more than sufficient for the mortgage. The problems is only to do with the fact that his salary has been paid out of company no 2 since May and therefore Halifax won't consider it until his salary has been paid out of company no 2 for 12 months - hence them saying they will re-consider in April. So frustrating as they were aware of this from the outset and yet have left it until 2 days before we are due to exchange!

gsmyth123

Hello, we are currently trying to get a mortgage and the only way so far was through a broker that told us 'themortgagelender' are willing to give us one based on our company accounts, not the April to April HMRC SA302s. We have one years accounts (Aug 17 -July 18) so if you have that you may have the same "luck"with these guys.

Our broker is Create Finance, they are charging us £799. We may get a referral if you do use them, worth asking.

Good luck!

ACG

I dont think any lender will take just his PAYE if he owns more than 20% of the company.

As gsmyth says there are lenders (not just TML) who will work on the financial year but if he literally took nothing until May, then even if the tax year end is November he is only going to be able to evidence maybe 6-7 months income. If that is not enough then I think you are in a difficult position.

I think you need to speak to a broker as there are a lot of questions and follow up questions that will determine if this is possible or not. I would be leaning towards no.

If Halifax have pulled the offer and you have been completely open and honest then they are probably liable for your costs.

Meerkat47

Thank you - will give them a go!

MortgageMamma

gsmyth123 wrote: »

Hello, we are currently trying to get a mortgage and the only way so far was through a broker that told us 'themortgagelender' are willing to give us one based on our company accounts, not the April to April HMRC SA302s. We have one years accounts (Aug 17 -July 18) so if you have that you may have the same "luck"with these guys.

Our broker is Create Finance, they are charging us £799. We may get a referral if you do use them, worth asking.

Good luck!

I think the majority of brokers can use these guys, I work for a small firm of Directly Authorised brokers and we use them quite a lot. They are a very flexible lender but there are others who work faster if the case is presented properly. Currently TML are taking four days even to review an uploaded document. Its driving me mad.

MortgageMamma

ACG wrote: »

I dont think any lender will take just his PAYE if he owns more than 20% of the company.

As gsmyth says there are lenders (not just TML) who will work on the financial year but if he literally took nothing until May, then even if the tax year end is November he is only going to be able to evidence maybe 6-7 months income. If that is not enough then I think you are in a difficult position.

I think you need to speak to a broker as there are a lot of questions and follow up questions that will determine if this is possible or not. I would be leaning towards no.

If Halifax have pulled the offer and you have been completely open and honest then they are probably liable for your costs.

There is a lender whose name has something to do with a certain condiment that will do 1 year and takes PAYE under 25%. I wouldn't have known this myself but I've just done a CPD webinar via Brightstar with them this morning. If I get the video/slideshow through I will send it to you. But you are absolutely right this is a no-no for most lenders.

To the OP. Take some advice from a whole of market broker and hopefully they can rescue the situation for you. It may be a difficult case to place but its best to consider all options before you write off your plans.

Rick_Albright

Hi there,

I think you need my plan:

https://forums.moneysavingexpert.com/discussion/comment/74487668#Comment_74487668

MortgageMamma

Rick_Albright wrote: »

Hi there,

I think you need my plan:

https://forums.moneysavingexpert.com/discussion/comment/74487668#Comment_74487668

OP please do not take the advice of a layman and embark on this plan, particularly as your company is showing a profit.

In my view, it is morally wrong and you could potentially be charged with mortgage fraud if you attempted this. It is blatant playing of the system. Changing ones circumstances temporarily to achieve a mortgage and then reverting back to the previous circumstances is a planned and pre meditated action. In a mortgage application you are asked if you are aware of any circumstances in future which involve a change in income and status. That question is in there to prevent situations like this.

I have been an adviser a very long time and if a client came to me and asked me to do this for them they would be shown the door. I don't believe the OP when he states HSBC knew what he was doing. I cannot believe he is actually bragging about this and inciting others to do the same it is irresponsible and I am reporting the post.

I hope you complete your transaction honestly and can see where I am coming from with this. You will be fine with your salaries and legitimate self employed earnings.

Meerkat47

MortgageMamma wrote: »

I think the majority of brokers can use these guys, I work for a small firm of Directly Authorised brokers and we use them quite a lot. They are a very flexible lender but there are others who work faster if the case is presented properly. Currently TML are taking four days even to review an uploaded document. Its driving me mad.

Thank you - can you please let me have the names of the other companies?