There are lenders in the market that are excellent at providing mortgages for limited company directors, and this case is a prime example. We were initially introduced to this client around 18 months ago to look at their options. On the initial introduction the client had already exchanged with a delayed completion adding some extra stress to the overall situation. The client was only one year into their new business at the time, but was on a run rate trajectory of huge growth. At the time our advice was to get the second year of accounts and we would be able to structure the mortgage within the clients favour. The pandemic hit at the time the client had his full second year accounts, which meant all lenders had completely changed their risk model leaving our client a bit stranded. One of the other main issues was our clients personal income was only£80,000, which meant we were looking at a mortgage of over 15x income multiple. We were able to work with the client, their accountant and the lender to give robust forecast of trading out of the pandemic and showing liquidity across business and personal assets.
Our solutions was as follows:
Purchase price – £1,700,000
Borrowing – £1,360,000 (80% LTV)
Interest rate – 2.04%
This allowed our client to minimise the amount of cash they had to use as a deposit which meant they could de-risk their personal financial situation as well as keeping as much cash in the business as possible. It also allows them to keep their mortgage payment as small as possible to allow their personal cashflow to be as positive as it could possibly be, again reducing stress on the overall financial position.
After having worked with the client over a full 18 months we were able to deliver an outcome that was structured around their financial position.