Personal Mortgage issues and business insolvency

itscurtains

Hi,

I am seeking some mortgage advice.

I am a Director and shareholder of a small company in the South West. There are 2 Directors and the same people own 50% of the shares each.

Due to our energy bills being so high due to a long contract we cannot get out of (thousands of pounds more than we should pay each month - a long story) we are not making a profit. We are considering winding up/becoming insolvent. The company has no loans.

My question is 

If the company winds up/becomes insolvent will this affect any future mortgage application I make?

Hoenir

No it shouldn't. Though you'll lack employment history. 

Trading insolvently is an offence for Directors. Speak specialist advice.  

DE_612183

How insolvent is the company? Surely better to cease trading and disolve?

itscurtains

It is not trading insolvent.

It was just a mortgage issue as to whether being a Director of a company that goes insolvent will affect mortgage issues in the future (e.g. credit rating)

DE_612183

well normally one of the questions on a mortgage application is about directors or insolvent / bankrupt businesses - it won't stop you getting a mortgage - but because of the risk factor the amount of available products and rates could be restrictive.

That's why I asked the question - much better to try and keep the business afloat / or dissolve rather than go to the wall.

Would you lend a couple of  £100,000 to someone who doesn't look like they can run a business properly? ( not saying you are but that's the question that will be posed by the underwriters )

Hoenir

DE_612183 said:

Would you lend a couple of  £100,000 to someone who doesn't look like they can run a business properly? ( not saying you are but that's the question that will be posed by the underwriters )

Companies fail for all sorts of reasons. Often has nothing to do with the skills of the Directors. Underwriters will base on their decision on the financial performance of the company nothing more. 

MWT

itscurtains said:

My question is 

If the company winds up/becomes insolvent will this affect any future mortgage application I make?

Winding it up should cause no issues at all.

I wouldn't plan on letting it become insolvent, can get messy, especially if either director has provided any personal guarantees ...

ACG

DE_612183 said:

well normally one of the questions on a mortgage application is about directors or insolvent / bankrupt businesses - it won't stop you getting a mortgage - but because of the risk factor the amount of available products and rates could be restrictive.

That's why I asked the question - much better to try and keep the business afloat / or dissolve rather than go to the wall.

Would you lend a couple of  £100,000 to someone who doesn't look like they can run a business properly? ( not saying you are but that's the question that will be posed by the underwriters )

They ask if the applicant has been bankrupt, not about their businesses in the main. 

The only issue I see is if you want to remortgage/apply for a mortgage, most lenders need 2 years trading. Obviously a new business would not have that. 

silvercar

Is the company limited? If not anyone it owes money too could try and hold the directors’ personally liable.