Mortgage - 3 Years of Company Accounts as Deemed Self Employed??

elstimpo

Thrugelmir wrote: »

Factual not hostile. Lenders operate at a macro level not a micro level. Policies being set at board level. Underwriters have an element of discretion but not the ability to change rules as they think fit.

When people are hesitant. Natural assumption is that there's somewthing to hide. As majority of people simply get on with providing whatever information is requested. After all the aim is to borrow money.

Nothing to hide thank you very much, some people are very cautious about the level of sensitive information that want to provide. Which i would say is sensible.

Good day.

elstimpo

Deleted_User wrote: »

I just re-read this.

I assumed they were asking for 3 years of company bank accounts and you felt that this was too much information.

3 years of company accounts is very very normal thing to ask for and quite strange that you are being hesitant in providing it. Most of the info is on companies house anyway if they really wanted to go look for it.

they will be looking to see if the income in the company can support the level of income you are drawing from it.
I had a client who was draining all the cash in her company to boost the dividends. I didnt even submit anything for her but these are the reasons they sometimes request company accounts.

As before though, there are a few lenders who work on accountants certificates and ask the accountant to sign off that the numbers are sustainable. Your broker will know who these companies are

It's been a long time since i applied for a mortgage and i've never been asked for company accounts previously. My credit rating is good, my companies credit rating is good, i have my 3 year tax assesement read to go, i've had mortgages in the past and paid them off in full. I also could secure any mortgage i do take out against 3 unencumbered properties i own. I can also show how i will repay the mortgage in full within 6-12 months and was looking for a delay with no early repayment charge.

I honestly didn't think there would be an issue and it would seem i will have to provide 3 years of company accounts despite the rest.

Appreciate your replies !

Thrugelmir

elstimpo wrote: »

Nothing to hide thank you very much, some people are very cautious about the level of sensitive information that want to provide. Which i would say is sensible.

Absolutely nothing wrong in holding ones own views. Unfortunately the lender sets the rules. If you wish to conduct business with them it'll be on their terms and conditions. The information you regard as sensitive is essential in order to make an informed lending decision. No lender is going to write a cheque on the basis of trust alone. Too much fraud and deception goes on for that.

Mortgage_Adviser

OP, to clarify, the reason why the banks won'r settle with your tax returns and want the company accounts is because they want to be sure that you didn't artificially pay yourself higher wages whilst running company at the loss to make your situation look better than what it really is.

kingstreet

The terms SA302 and Tax Calculation are interchangeable. Addition of the requirement for a Tax Year Overview in each case ensures the tax is correct compared to the SA302/TC.

Lenders have different requirements. Some want accounts, some tax docs, others an accountant's certificate. As JMA said, establish what data you wish to provide and ask your broker to work from there.

haras_nosirrah

As a broker we always ask for accounts even if the lender doesn't need it. It is so we can see whether there is enough profit in the company to draw down dividends as lender do look on companies house and we don't want to be caught out.

elstimpo

haras_nosirrah wrote: »

As a broker we always ask for accounts even if the lender doesn't need it. It is so we can see whether there is enough profit in the company to draw down dividends as lender do look on companies house and we don't want to be caught out.

No one at the company has ever been paid a dividend.

amnblog

Oh dear Elstimpo, it sounds like your Broker has not been direct enough with you causing you both unnecessary stress.

As has been mentioned above, it is common for a Lender to request company accounts where a borrower owns your level of the business. It is clearly possible in your circumstance for paye to be engineered to a level that suits you as a borrower but may be unsustainable for the business longer term. As a regulated business the Lender will have told the regulator that their policy is to mitigate that risk by viewing company accounts. They do not have the freedom to ‘take a view’ as other elements of the risk on the case look minimal. If they did, they could find themselves of the end of a slapping from the FCA.

Your choice is provide the Accounts or drop the application.

[Deleted User]

Dividends/salary payments to anyone, including yourself.

If you are making a £50 net profit each year but paying £20k dividends clearly it's not sustainable and being paid from credit (and/or figures manipulated).

Generally I find the people who get most upset are those where it's absolutely 100% above board and an amazing business and they're just offended we are asking for info (understandable to some extent) OR people who have something to hide.

I'm sure you're the former - and trust me it's an absolute nightmare when we get an application where the client thinks they are employed and the "rules from above" dictate that they aren't (% shareholding etc.) as the documentation requirements just go up and up instead of just "payslip".

I've had to ask for lots of info on a very very expensive property and I think it was 5% LTV in the end. The client wasn't amused, but was understanding in the end!

haras_nosirrah

As a broker I have a list of documentation for every case that I want to see before I will entertain an application. For self employed limited company directors I want to see accounts, tax assessments and tax year overviews or I wont submit an application. It doesn't matter what the lender wants.

Anyone who is unwilling to provide one of these documents and is willing to pay a higher rate to avoid having to provide would not get far.

As a broker we have to be confident in what we are submitting as the quality of business we submit is assessed and we could be dismissed from a lenders panel. There is also our responsibility to stamp out fraud and getting the documents and checking them is how we do this.

Saying company accounts is sensitive information is crazy. It is public information. Your accounts are on companies house and lenders who don't ask for accounts are still looking at them - they just go on the companies house website and look there.

If you need to borrow the money then provide the documents. It really is that simple.