Mortgages for minority shareholders
Posted on 16th March 2024 at 13:39
Did you know that when you are a shareholder with less than 20% shares, most lenders struggle to find the capacity to be able to underwrite and take this into affordability. They will then default to your normal every day income from self employment or PAYE.
On paper, you could bring in millions in dividends and a £20k salary. They would only accept the £20k...
There are lenders who will take a view and consider it, but not many will actually accept unless you have a good few years showing pretty much the same and quite specific circumstances.
If you have over 20% or you are a director, then its different, lenders can consider you as part of the company and therefore take this income into account.
19% or less though, this causes an issue.
The good news is, I have found a lender who can help, they will also consider ignoring a 1 year dip in dividends over the middle of the years. Years such as Covid.
E.G. £500k yr 4, £500k yr 3, £100k yr 2, £500k yr 3.
I'm not going to quote rates etc, but some of the smaller building societies are much more able to help, subject to personal circumstances, LTD and property type. This one lender will hopefully set a bit of a rule amongst them.
If you are paid like this, all is not lost!
Get in touch if this could help you.
Austyn Johnson
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