Struggling to find mortgage as company director

bertiewhite

Someone24972 wrote: »

Options open up at 20% deposit which is completely unaffordable to me.

Find a cheaper house?

Someone24972

Who owns the other 60%?

My brother, co-director

That is actually quite unusual as directors normally have a low salary (to the primary threshold) and then dividends on the rest.

We moved from dividends to salary because both me and my brother spend all our time doing software development which entitles a significant % of our time for R&D tax credits. (Our MD we hired handles most of the admin now). We make significant tax savings with this new approach.

Find a cheaper house?

Unfortunately am in London, where the business is based. We'll have ~£100k cash for deposit and fees, so max ~£80k for deposit. Basically impossible to find a house in London with good travel connections for both me and my partner for £400k.

Someone24972

Toyed with the idea of giving my shares to my brother and resigning my directorship so I can simply be a full time employee, but no idea if that's going to cause problems and it may impact my entrepreneurs relief entitlement if we want to exit within 2 year period. So I don't think this is an option either way.

One thing I should also mention is am applying with my partner for a joint mortgage, her salary is ~£34k p/y. The mortgage brokers are aware of this, and still are telling us the above.

amnblog

Someone24972 wrote: »

Toyed with the idea of giving my shares to my brother and resigning my directorship so I can simply be a full time employee.

Then you are working for a family business so a lender will still be interested in the trading performance of the business.

10% deposit will be shortening your options, but be aware that pulling extra deposit from the business has it's own complications with regard to lending.

You need a Broker who specialises in helping the self employed, not one that specialises in reviewing washing machines.

Someone24972

Have phoned a lot of brokers up, and not looking good still. One is seeing if anyone will lend to me treating me as a PAYE but would require a reduction in share holding to <33% perhaps. An option which seems like it could work.

Have also emailed our bank manager Barclays to see if they can help.

amnblog

Rule 1

Don't make decisions about your business or tax affairs to 'suit' a potential mortgage application

Rule 2

Don't waste time with your Bank Manager

Rule 3

If two 'suitably experienced' brokers tell you 'no' they are probably right, if three tell you 'no' they are definately right.

ACG

Someone24972 wrote: »

Unfortunately am in London, where the business is based. We'll have ~£100k cash for deposit and fees, so max ~£80k for deposit. Basically impossible to find a house in London with good travel connections for both me and my partner for £400k.

I am not sure if this in reference to my post.

I meant £450-475k + your deposit which gets you to around £550-575k. Less than £600k but not a million miles out. Certainly more than £400k.

Although those figures are based on what you have posted here so could be well out.