Mortgage as majority shareholder of ltd company

blakeyboy72

Can anyone give me any guidance.  I'm looking to have enough savings to buy a property next year. 
My wife and I are shareholders of a ltd company.  Its been trading for 11 years.  We are both 50% shareholders and im the sole director.   
My company has a negative shareholders funds from losses sustained due to issues with an ex business partner.   However during the past 3 years we have made relatively small profits.  I currently pay myself through PAYE as can't take dividends.  My wife also works elsewhere so is paid via that company and our company via PAYE. 
I want to know if 1) mortgage lenders would look at the last 3 profit years or look at the combined loss total when considering applications?
2)  ANd if would be prudent to reduce my shareholding amount to less than 25% so i don't have to declare myself as "self employed" or if lenders would look at this.

csgohan4

lenders will look at affordability and not just at company accounts but also your salary/ dividends.

you can generally borrow x4.5 of your gross personal income not including debts

You are technically not self employed as a director of  a limited company but that wouldn't impact on your mortgage app whether you are or not. You need at least 1 year, preferably 2 years SA302 as well. 

[Deleted User]

1. Most look at the average of last 2 years personal tax returns.  Very few wouod look at overall business performance but some would historically be more in depth than others.    Have also had a lender come back saying they have checked companies House and have a few questions.  
In the current climate I would expect more lenders to go in to overall business performance and wouldn't expect an easy ride if they have any concerns over coronavirus impacting the business. 

2.  Some lenders use 25%, some 15%.  Could do this to go through as pate but they might do a companies house check and see you reduced shareholding and question why.   If it was to hide business performance then expect an instant decline and possibly and industry black mark for misrepresentation.

Honesty is the best policy and see a broker who can place with a sympathetic lender

blakeyboy72

thanks for the answers. 
Ill have at least one more set of accounts to submit before i've got a suitable deposit which should show net profit again - not enough to clear the historic losses but enough to show continued profitablility 
@Deleted_User thanks for the insight re #2.  I suppose if I act like i've got something to hide then it raises suspicion so won't do that,