Stupid stupid Banking systems!

Could not get a £30k BTL mortgage on a £380k house that has had a >95% occupancy since 2002.

The conversations with various banks went something like this

Ah Hamish, you’ll have had your tea.

I have that Banker. We’re here for a modest BTL mortgage and you have various products that interest us.

Aye Hamish, we have and all your ratios are ‘well in’. Mrs Hamish’s ratios are not bad either.

Hamish, We see that aside from your BTL’s you operate a limited company. We completely understand (and if we were allowed to comment would probably agree with) the remuneration structures you currently have in place; the company accounts look good. All above board; splendid.

This does however leave us with a tiny problem. We cannot include any of your BTL income or profit (however the Government decides to calculate it), we cannot consider your 20+years of excellent BTL accounts and your tax returns do not show a minimum of £25k income for the last 3 years. Besides, you had a take-away last week that some would call frivolous and may suggest a slide into unchecked spending.

Banker, what about our tax returns from before that?

Hamish, it has to be the last 3 years. Now, we know why your finances are structured like that and we completely agree that paying yourself more would mean the only beneficiary would be HMRC. But it means we can’t tick the box. You see, having a 3 years tax returns each showing £25k pa is important for our liquidity check list. Lending to someone who has earned less would be wrong and as a complete banker we must look after the incapable because we don’t want a credit crisis on our hand do we?

But I could fire myself right now for complete incompetence; no job is safe or stable not even yours.

Hamish, don’t get upset, we agree,,, your 999 credit score, everything paid off, hundreds of clear and unused credit cards all taken out simply to get the 10% off introductory offer, clearly a canny low risk punt ,,,,, give me a mo’.

Hamish, I have discussed this with Saruman and maybe, just maybe if you paid yourself more for 1 year we could tick my precious box-sis and you could join us. You haven’t yet filed your 15-16 return. Perhaps if you could come back in December with your 2016 tax return showing a different story for that 1 year, adjust you 15-16 return-sis before casting it into the fires of Mount HMRC Doom on 31 Jan 17?

But Gollum, This is absolutely crazy. Not only did this conversation begin as a pastiche of a sketch from I’m Sorry I Haven’t a Clue it seems now to be developing into a malformed version of an overlong book I was force fed for my Eng Lit o-level. Besides, it is only in the last couple of years that we have been able to put any money away for our dotage what with kids and universities and taking risks to start the company after being made redundant; a move that is now beginning to pay back all the hard work. After all, it was your bank that screwed our pensions up in the first place. Do remember Thatcher, the Dark Lord Sauron? the ’80’s, the battle between The Ring of Banks and the alliance that fought against that miss selling? Oh, you are too young. Bless.

Hamish, did you say pensions-sis? Can I see your precious Company account-sis again? Retained profit is small.

Gollum, over the years we were prudent. We saved when others were seduced by the cheap credit and irresponsible lending practices forged beneath Mordor. We never went on expensive holidays outside the Shire. We stayed and we grew our own yellow labels, buying second and third hand. I do all my own burrow maintenance and so we have nearly paid off our family home mortgage. When we retire I don’t want a mortgage. I want us to be able to pay the council tax and use 1 bar on the fire at the same time (eating optional). Therefore, even though it is quite late in life, I am putting what I can into my pension. Isn’t that what the Servants of Sauron want us all to do?

Oh Dear Hamish, the Underwriters don’t like it if there is no retained profit-sis

Underwriters-sis?

Hamish, these are the wraiths who get others to cough when you can’t and we have to sell your mortal remains and don’t get what we think we are entitled to. They ensure that If we screw up we all still get paid and you get the bill. These Names live deep down in the fetid bowels of the banking world adjacent to the Osborne’s department of spurious taxation where they toil away blindly; prevented from any contact with the real meaning of risk.

But Dear Sméagol, you must try and remember, I am a mere human. The BVI’s are too far and the map on the inside cover of the book doesn’t extend that far. if I retain profit I would have to pay corporation tax on that profit to Chief Orcs. What would be the point of that when at the moment I would be much better off putting it into my pension before the end of the Company Year?

Hamish, you must understand, I cannot agree, The Eye of Sauron is amongst us again but in leather trousers this time. She together with an ex-transport minister, the new Servant of Morgoth, have indicated no changes to Osborne’s approach, powers that be, must tick my precious box-sis mumble mumble prudent lending rules have been forged mumble mumble now please stop being reasonable.

Like I said, stupid banking systems

Hamish

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