Mortgage offer declined because some of the deposit is from a limited company dividend

[hjjhouse]

Has anyone brought a house with part of the deposit coming from a dividend? Did you have the money in your personal bank account before the mortgage application?

We had to use a broker and go with a specialist lender because we have multiple streams of income from different limited businesses. My partner had 1/3 of the deposit still in his business account, we were told this would be fine to leave it there (by the broker) until we exchange. The money was just left in a business savings account and not part of any business cash flow. We had our accountant write a letter stating that the money being taken out as a dividend will not effect the business in any way and he provided proof of revenue growth over the last 3 years. The lender has declined us on the basis that the money isn’t yet in a personal account and could negatively effect the business, even though we’ve provided proof.

The broker told us this would be fine otherwise we would have taken it out before the official application. And now we’re going to loose our dream home because the only other lender we can apply with requires a 20% deposit which we do not have :;( Was the broker wrong for telling us this? Or is this just the lender being hypercautious?

Why can't you just transfer the money from the business savings account into a personal account if it has been withdrawn from the company as a dividend?

Our deposit came from dividends, but it was already in personal savings accounts. I can understand lenders getting skittish if it isn't. Has the dividend actually been declared? Get a different broker - a good one will be able to tell you what to do.

Are there really only two possible lenders who will consider you ?

If the money is still in a business account , it belongs to the business. Even if it’s been allocated to the directors loan account.

Have you already declared the dividends from this year, or is it from last year?

Why don’t you just pay it into your personal account ?

Are you sure is a dividend and not a directors loan from the company to you / your partner?

Revenue growth isn’t the key issue here, as dividends can only be paid out of taxable profit. You could be incensing turnover but not increasing profit.

How many limited companies do you have - you mention “ multiple “ streams of income but your question is about the deposit.

You shouldn’t be making offers on property if you don’t have a mortgage approved in principle.

How far away from the 20% deposit requirement with the other lender are you ? Could you get some temporary family assistance with that ? What in your circumstances means you only have the option of these two lenders ?