Mortgage multiples for Ltd Co directors?
Discussion
What would be the maximum a typical lender would be able to offer in the following circumstances assuming property value is £1.5m.
2 x married directors own 100% of company
Salaries of £12.5k & £8.5k
Dividends of £37,700 each
Last year company profit £150k
Prev year profit £50k
No debts or dependents.
Thanks.
2 x married directors own 100% of company
Salaries of £12.5k & £8.5k
Dividends of £37,700 each
Last year company profit £150k
Prev year profit £50k
No debts or dependents.
Thanks.
I had a similar situation in 2017 and Clydesdale bank (now owned by virgin money who are now owned by nationwide) had a great product that allowed exactly this. They allowed me to borrow based on Ltd company profits which was super helpful at the time. Not sure if such a product exists now but it definitely helped me a lot back then.
It's not an unusual situation, so most banks should quote you standard multiples in region of 4.5, but they all have different ways of measuring profit. HSBC, for example, will only look at your post-tax profits for past 2 years, so if you've been paying a lot into pensions or bought an EV, then you're going to be struggling to get a high multiple with HSBC.
Other banks may do a more traditional examination of your self-assessment, so it shouldn't be a problem to find what you need depending on what kind of shape your accounts are in.
So in your case in both cases it looks like about 50k each x 4.5 then you are looking at about 450k?
Other banks may do a more traditional examination of your self-assessment, so it shouldn't be a problem to find what you need depending on what kind of shape your accounts are in.
So in your case in both cases it looks like about 50k each x 4.5 then you are looking at about 450k?
Edited by lizardbrain on Saturday 23 August 12:10
997.1 said:
I had a similar situation in 2017 and Clydesdale bank (now owned by virgin money who are now owned by nationwide) had a great product that allowed exactly this. They allowed me to borrow based on Ltd company profits which was super helpful at the time. Not sure if such a product exists now but it definitely helped me a lot back then.
They no longer lend against gross profit like they used to.....Gassing Station | Finance | Top of Page | What's New | My Stuff