Company Director Mortgage

arrows123

Currently going through application with Virgin Money through a mortgage advisor for a mortgage. I'm a sole director of a company. I was one of the lucky ones in that last year the accounts for the business were substantially higher than the year before and the business was unaffected by Covid. The lenders have just come back to ask if the company received any grants last year. Back when everything kicked off in March the government made available grants for businesses who receive small business rate relief where they rent premises. My business took the £10,000 grant and it was paid on 8th April 2020. This was back in the time when everything was shutting down and it seemed to make sense to accept it as the future was unknown. no other grants or government assistance were claimed as it soon became clear it wasn't needed and we were able to successfully continue on trading. Is this likely to adversely effect my mortgage application? The money is still in the business account and could be paid back if needed. 

K_S

arrows123 said:

Currently going through application with Virgin Money through a mortgage advisor for a mortgage. I'm a sole director of a company. I was one of the lucky ones in that last year the accounts for the business were substantially higher than the year before and the business was unaffected by Covid. The lenders have just come back to ask if the company received any grants last year. Back when everything kicked off in March the government made available grants for businesses who receive small business rate relief where they rent premises. My business took the £10,000 grant and it was paid on 8th April 2020. This was back in the time when everything was shutting down and it seemed to make sense to accept it as the future was unknown. no other grants or government assistance were claimed as it soon became clear it wasn't needed and we were able to successfully continue on trading. Is this likely to adversely effect my mortgage application? The money is still in the business account and could be paid back if needed. 

@arrows123 The underwriter may deduct the 10k grant income as a one-off event and recalculate the profit numbers and affordability. Whether that will have an adverse impact on your application will depend on how much you are looking to borrow.

arrows123

K_S said:

arrows123 said:

Currently going through application with Virgin Money through a mortgage advisor for a mortgage. I'm a sole director of a company. I was one of the lucky ones in that last year the accounts for the business were substantially higher than the year before and the business was unaffected by Covid. The lenders have just come back to ask if the company received any grants last year. Back when everything kicked off in March the government made available grants for businesses who receive small business rate relief where they rent premises. My business took the £10,000 grant and it was paid on 8th April 2020. This was back in the time when everything was shutting down and it seemed to make sense to accept it as the future was unknown. no other grants or government assistance were claimed as it soon became clear it wasn't needed and we were able to successfully continue on trading. Is this likely to adversely effect my mortgage application? The money is still in the business account and could be paid back if needed. 

@arrows123 The underwriter may deduct the 10k grant income as a one-off event and recalculate the profit numbers and affordability. Whether that will have an adverse impact on your application will depend on how much you are looking to borrow.

Thanks for your reply, it should be fine then. The company profits for the last year were £30k more than what was taken out in salary + dividends, and it seems Virgin Money use the average of company profits for the past two years (plus affordability) rather than salary + dividends anyway. 

K_S

arrows123 said:

K_S said:

arrows123 said:

Currently going through application with Virgin Money through a mortgage advisor for a mortgage. I'm a sole director of a company. I was one of the lucky ones in that last year the accounts for the business were substantially higher than the year before and the business was unaffected by Covid. The lenders have just come back to ask if the company received any grants last year. Back when everything kicked off in March the government made available grants for businesses who receive small business rate relief where they rent premises. My business took the £10,000 grant and it was paid on 8th April 2020. This was back in the time when everything was shutting down and it seemed to make sense to accept it as the future was unknown. no other grants or government assistance were claimed as it soon became clear it wasn't needed and we were able to successfully continue on trading. Is this likely to adversely effect my mortgage application? The money is still in the business account and could be paid back if needed. 

@arrows123 The underwriter may deduct the 10k grant income as a one-off event and recalculate the profit numbers and affordability. Whether that will have an adverse impact on your application will depend on how much you are looking to borrow.

Thanks for your reply, it should be fine then. The company profits for the last year were £30k more than what was taken out in salary + dividends, and it seems Virgin Money use the average of company profits for the past two years (plus affordability) rather than salary + dividends anyway. 

@arrow123 That's right, Virgin take net-profit + salary for affordability purposes.