Mortgages for Limited Company Director which don't require too much paperwork

[Jarstastic]

DH and I are buying a new house. We sold 2 properties during Covid and have been living in rented. Approx 50% deposit/50% mortgage.

DH is in a salaried job, £150,000 + £50,000 bonus. I am an employee of a LTD company of which I am the majority shareholder. Unfortunately during Covid, my industry took a battering. I've put some money into the business from my personal account.

We intended to just use DH's earnings for a mortgage. However, the mortgage broker said me being classed as a dependent brings down the mortgage amount by £60,000. He also moved jobs and so his bonus can't be considered as only received one year in current company, not two years.

We can't buy the house in just his name and mortgage as a large chunk of the equity comes from a property I bought prior to getting together (Not a situation we want but looking at all options).

We have now put me on the mortgage application as an employee for my basic salary of £12,570. (I usually got paid this monthly and then topped up at the end of the year, however, stopped paying myself anything at all: payroll was run for the basic monthly amount, but I didn't draw the money). We now have 2 months bank statements to our joint account showing both salaries going in.

A month ago the mortgage we were looking at (Accord) had on website one month's pay slip and one month's bank statement. For shareholders of 25%+ perhaps would be requested 2-years SA302 (personal tax return). We had looked at this mortgage as they would consider his bonus, weighted at 50%. However, this mortgage has now been withdrawn from the market!

Looking at the websites of options the broker has recommended now, the lenders are asking from company directors with more than 25% shareholding for company accounts, company bank statements etc.

Any ideas/experience of which lenders won't ask for the company information?
I'm literally just putting this income down, no extra PAYE or dividends. My business will pick up (has already) but it doesn't really matter about my salary for affordability from our end, we have been paying rent for nearly 2 years. We just don't want us to be -£60k, and don't want to wait till his bonus can be considered.

I've never hear

try again!

I've never heard of a partner being classed as a dependent.

We had a mortgage with Accord approved last month. We are pretty straightforward in salaries roles except we both get overtime & DH gets a bonus. They wanted quite a bit of additional info that wasn't initially required & it took a few weeks. Our broker said lenders were really tightening up.

But I can't help on your other questions I'm afraid.

As affordability is a legal requirement, all lenders will check.

As a Ltd Co director I went with Santander. V straightforward though we did have a great broker.

Would this help?

Following its latest review of the mortgage market, the Financial Policy Committee has confirmed that it will withdraw its affordability test Recommendation. This will come into effect from 1 August 2022.

Not sure. I suspect that the due diligence will
still mean they dig the arse out the detail. The days of self cert are long gone.

Thank you. I’d forgotten about this. Will ask the mortgage broker about this today and again on Monday in case any new products turn up due to this change, or a new month.

@weirdlynormal This situation is a far cry from self certification. They will easily lend what we want on my DH’s salary as a sole application.

@Jarstastic sorry I wasn't implying you were pushing limits or anything. I was ruing the loss of something that simplified the system. It's a total pain (as a company owner I totally get the hoops). I have found that if you want reasonable charges then you have to just go with the ridiculous demands. A broker should really earn their fee for this.

Ah. Thanks.

Thank you for commenting.

What did you have to provide? Santander's website say for 'self employed income' (and broker has said any mortgage company would treat me as self employed) they state accountant certificate OR 2 x Inland Revenue's personal tax SA302s.

The latter would be best for me, but wondering if they will then request detailed information from LTD company accounts.

I have a mortgage with Santander in my sole name and there was no reduction for self employed DP as a dependent (I'm assuming there was for 2DC but not significant as I don't earn much and borrowed at quite a high salary multiple. Similar equity / loan ratio to you but lower earnings.

Thank you. I thought Santander may be different but I just ran scenarios through the Santander intermediary calculator for affordability.

In a sole name with a salary of £150,000 with 3 dependents/children will lend up to £687,000. (If I take out the dependents, it says will lend up to £740,000!) Make it a joint application with no salary mentioned for second applicant and it goes down to £627,000. So this correlates with what the IFA advised though that was a different lender.

Maybe the difference is having the mortgage in your sole name? Once you are past a few 3 dependents ie. add me as a 4th, it doesn't seem to make much difference. However, we've been advised we can't have the mortgage in his sole name because of the source of funds for deposit. Was this a consideration for you?

Broker here

Every lender will treat someone with over 25% of the company ownership as self employed which will mean tax assessments and tax year overviews and will potentially also request full company accounts. The reason for this is you can control your income so lenders will look at the last 2 tax years to confirm your income hasn't been artificially inflated for mortgage purposes

There are lenders who will take 1 years bonus.

If the deposit is coming from a joint property and you are married nearly every lender will want you on the application. There are lenders who would be OK with you being an authorised occupier but you would need to proceed with caution as you are effectively gifting your equity to your husband

I thought I'd update this thread in case helpful to anybody. We moved into our house last autumn!

"Following its latest review of the mortgage market, the Financial Policy Committee has confirmed that it will withdraw its affordability test Recommendation. This will come into effect from 1 August 2022."
I posted on 28 July and our situation changed in the first week of August.
I am not sure if it was this, or due to contacting another broker who recommended we focused on 5-year fixed mortgages as affordability criteria was less stringent than 2-year fixed mortgages (and had been for several years?). Our previous broker had just said interest rates about the same between 2 and 5 year mortgages and asked how long we wanted to be tied in for. They had not mentioned any differences in affordability.

We got a mortgage through NatWest. The process was pretty smooth. They lent what we needed on DH's salary alone (excluding bonus). The broker decided not to factor any income in for me on the application. However, they made a manual note on the file asking NatWest not to class me as a dependent due to income showing on bank statements.

The only thing which wasn't ideal is having to make part of the mortgage interest only to make our committed payments lower to pass their affordability. We are overpaying each month.