Mortgage Case Study - How We Get the Business Funding You Need
Securing a Mortgage with 12 months Trading Accounts
Securing a Mortgage with 12 months Trading Accounts - It Can Be Done!
Purchase Price: £245,000; Mortgage Required: £208,000; Term: 21 Years
Miss Edwards was referred to us by an existing client; she had been running a successful Fish and Chip Shop in Gloucestershire for just over one year and wanted to purchase her first home.
After approaching her bank and scouring online she continued to come up against an obstacle – the company only had 1 year of trading accounts. The standard response she was met with was “come back in 2 years’ time”.
When we were first approached by Miss Edwards we were confident that the mortgage could be placed with a specialist lender. We initially completed an AIP (Application in Principle) which gives an initial decision based upon the clients’ income, regular outgoings, monthly expenditure, credit score and the amount that they want to borrow. This came back as an ‘accept’ with the next stage being to gather numerous additional documents and progress to a ‘full application’ stage.
With all the supporting documents (personal and business bank statements, I.D., certified accounts, SA302, proof of address for her current and previous home and proof of deposit funds) in place, and accepted, we had to wait for the underwriter’s response.
Initially, they stated that there may be a problem with the qualification that her accountant holds as it did not meet their requirements. Her Accountant confirmed that he was not registered with the ICAEW or ACCA - this presented a slight hitch. After much careful consideration we contacted a suitably qualified accountant in her area who was able to liaise with her existing accountant to complete, submit and fully sign off the accounts.
Miss Edwards then found herself in a legal dispute with the local council as a sign post in her front garden meant that part of the land within her property boundary did not belong to the property.
We liaised with her solicitor and the local council to ensure that the problem was resolved. During this period of time her mortgage offer expired so we contacted the lender to request an offer extension - after completing several forms this was granted.
Miss Edwards was then able to complete her purchase and move into the property.