Shot myself in the foot

[Scrag Meister]

Both of the last couple of years I have made large end of tax year voluntary payments into my pension plan directly from MyCo.

However this has come back to bite me on the ass, now that I need a mortgage.

The pension contributions, maxed each of the last 2 years make my profit figure look a little low, and now my lender of 14 years is questioning if I can afford the repayments on the amount we are asking for.

Yes I could look elsewhere, but unlikely to get base + .49% for the term. Will wait and see what the underwriters say. I provided a load of additional paperwork explaining, also they wouldn't take my rental income into account either.

Doh!!!!

[BlasterBates]

He's questioning it, so you just need to justify it.

He may not have seen your pension pot, which you ought to be able to use as collateral.

As far as he's concerned he wants to see cash flow. What you need to do is simply justify it. In the end he want's to be sure you can afford it. If you have a good explanation he should accept it, if not you'll probably find someone who does.

...and consider commiting the pension as collateral, that should shove the interest rate down a bit.

I'm surprised they ignore rental income, but if you have mortgage repayments they may see that as a risk, i.e. when there is no tenant you have net outgoings.

[Scrag Meister]

He's questioning it, so you just need to justify it.

He may not have seen your pension pot, which you ought to be able to use as collateral.

As far as he's concerned he wants to see cash flow. What you need to do is simply justify it. In the end he want's to be sure you can afford it. If you have a good explanation he should accept it, if not you'll probably find someone who does.

...and consider commiting the pension as collateral, that should shove the interest rate down a bit.

I'm surprised they ignore rental income, but if you have mortgage repayments they may see that as a risk, i.e. when there is no tenant you have net outgoings.

No mortgage on the rental property. They ignore income from the rental, but do consider small associated outgoings amounting to around £50 per month.

There is no way for them to put a charge on the pension pot, we discussed it.

Any way, I hope to hear from them in the next couple of days.

[Maslins]

Yeah, sure many Ltd Co owners have had similar. Or possibly slightly more common, own a company which is profitable enough to take out £100k/year in dividends, but they stick to ~£30k to keep personal tax low, then lender only prepared to base borrowing on dividends not profit.

Hope the underwriter bothers to consider this properly rather than it being a "computer says no".

[Scrag Meister]

Yeah, sure many Ltd Co owners have had similar. Or possibly slightly more common, own a company which is profitable enough to take out £100k/year in dividends, but they stick to ~£30k to keep personal tax low, then lender only prepared to base borrowing on dividends not profit.

Hope the underwriter bothers to consider this properly rather than it being a "computer says no".

It wasn't those figures that were the issue, as the accountant provided a certificate showing Co turnover and profit etc..., the concern was how little made it to my personal income from the company, happens to be around the 42-43k mark .

[pr1]

this is why you should go through a broker

[jamesbrown]

this is why you should go through a broker

Agreed. There are several different ways of getting to the required borrowing (including, rarely, retained profit) and these are best explored through a broker. You may not get the absolute best rate available, depending on the route you choose, but the most important thing is to get the mortgage agreed at an acceptable rate. Anyway, hopefully the decision will be positive.

[psychocandy]

Both of the last couple of years I have made large end of tax year voluntary payments into my pension plan directly from MyCo.

However this has come back to bite me on the ass, now that I need a mortgage.

The pension contributions, maxed each of the last 2 years make my profit figure look a little low, and now my lender of 14 years is questioning if I can afford the repayments on the amount we are asking for.

Yes I could look elsewhere, but unlikely to get base + .49% for the term. Will wait and see what the underwriters say. I provided a load of additional paperwork explaining, also they wouldn't take my rental income into account either.

Doh!!!!

Base plus 0.49 where'd u get that ?????

I though my legacy base+1.1 was cracking!!!!!

[Scrag Meister]

All approved, now onto the mortgage valuation and survey.

[Scrag Meister]

Base plus 0.49 where'd u get that ?????

I though my legacy base+1.1 was cracking!!!!!

From a lender who when they say Loyal Mover rate actually seems like they mean it.