Another company director trying to get a mortgage!

barryls69

Apologies for the cut and paste from an earlier post but it's kids dinner time!

- 2 x Company directors of small company founded ~10 years ago, 100% shareholders
- £20k in company reserves
- Pay ourselves £10k salary each
- Have always paid myself about the same
- Company is debt free
- Not First time buyer, excellent credit rating
- Buying with partner
- Have £500k cash to put deposit down on property ~£700k

The last 3 years of numbers, roughly were:

Net profit after tax
2016: £10k (£20k dividends)
2017: £5k loss (No dividends)
2018: £12k profit (5K total dividends)

Using a small local broker at the moment but he says we can only get a £140k mortgage. Does this sound about right?

We also have a holiday flat in England which is let out (income approx 15k per year).

Any advice much appreciated!

csgohan4

generally only borrow x4.5 of your income, paying yourself that little plus reduced dividends is going to reduce what you can borrow.


Being tax efficient and boosting your income for the multiplier are two difference things. You can't have it both ways I'm afraid.


Consider reducing your budget for the house?

Thrugelmir

barryls69 wrote: »

Net profit after tax
2016: £10k
2017: £5k loss
2018: £12k profit

Fluctuating profitability doesn't help your cause. Ideally annual profits would be on a progressively growing incline. Or at least at a higher base level.

amnblog

You are trying to raise £200,000 on what is effectively £32K income.

You might get about £140K but nowhere close to £200K

haras_nosirrah

Any equity in the holiday home you can release to make up the difference?

barryls69

There's about 70k equity in the holiday let, might be worth asking about.

Yes we had a slowish year last year so that's reduced our income, normally it would be about 70k combined.

foxy-stoat

If you have half a million in cash - you should be able to raise the additional capital should you not?.....or speak to your accountant about directors loan and increasing the amount you pay yourself to get your numbers up.

Or buy a property with the cash you have = no mortgage.