I recently secured a mortgage for a limited company first time buyer mortgage using a gifted deposit from three different people. This made up 50% of my client’s total deposit, which created a few challenges when proving affordability to a lender.
My client was self employed with his own limited company – a restaurant in London – of which he needed to use the accounts from. However, the restaurant had made a small loss the year before, so he wanted to use the latest accounts now that business was going well.
In addition to this, my client’s wife was employed through the company. This was a problem to the majority of lenders, especially as she had only been there for approximately 8 months rather than the 12 month employment history required, yet my client needed this for affordability.
Equally, the people gifting the deposit had previously moved some cash between different accounts which raised a few questions with lenders.
The initial lender I approached had many personal questions regarding the gifted deposit, which my client felt uncomfortable with, so we hit a wall as a result.
However, I was able to source an alternative lender who was happy to consider my client’s application with a reference from their accountant stating the limited company was sustainable.
My client was able to provide 12 months’ worth of bank statements. These initially looked fairly complicated as he had been moving money in and out of savings. However, I was able to demonstrate exactly where the money was going at each stage to make it as easy as possible for the underwriter.
I was able to do so successfully and the lender was willing to accept the application. Despite a few challenges along the way, the rest of the deal was smooth-running for my client all the way to completion.