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Give me strength

A rant about clients bombarding me with mortgage broker questions

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Client was incorporated by previous accountant and as a result of the incorporation, had a credit balance on DLA of 30K.

For the past 2 years, client has taken a minimum salary (NI threshold) and 5K dividends in 2017-18, reducing to 2K in 2018-19.  Further extractions from the company have come off the DLA balance, at client's request as "why should I be taxed on salary / dividends when I'm owed money from the company".  Fine.

Now, she wants a mortgage and has discovered that I was right when I told her that most lenders will not take DLA draw downs as income.

Client now very unhappy that she cannot seem to obtain a mortgage.

No you cannot re-write history and no you cannot have your cake and eat it - duckwit.

Client has pestered me all morning about urgently sending accounts and various summaries as client is meeting a mortgage adviser this morning.  First I know of this is at 9:30am with client ringing incessantly!  Urgent urgent urgent!

Now I get a phone call while client is sat with the mortgage adviser.  "Here, the mortgage lady wants to speak to you".

Mortgage adviser suggested that projections for the next 12 months may help if needed - ok fair enough.

20 minutes later, client rings and says "so have you sent those projections over yet"!

I'm sure you can guess the answer that was given.

Unbelievable.  Blood pressure high once again.

Apologies, just wanted to vent.

Replies (21)

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By James Green
11th Jun 2019 14:15

I feel your pain.

I hated dealing with mortgage brokers so much that I took CeMAP myself and now do them for clients directly.

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Replying to James Green:
By Roland195
11th Jun 2019 14:20

Isn't that a conflict of interest?

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Replying to Roland195:
By James Green
12th Jun 2019 12:25

Why do you believe that?

Accounting / tax regulated by one regulator, financial services by FCA.

All commissions etc fully disclosed and agreed with client.

I believe it’s fairly common for firms of our size to have financial services businesses.

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Replying to James Green:
By Roland195
12th Jun 2019 12:46

I am not suggesting you are doing anything wrong and indeed can see the advantages to this in terms of efficiency but can't quite shake the view that you couldn't possibly wear the hats of accountant, tax advisor & mortgage broker all at the same time.

Do the lenders not have a problem with this?

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Replying to Roland195:
By James Green
12th Jun 2019 13:33

Thank you for the calcification.

I’ve had no issues with any lenders and sit on the approved panel of over 200 through our financial services network.

Picking up a thread below, I never provide projections for mortgages and have never found the lenders actually want this.

All accountancy / tax information is appropriately caveated when passed on to the lender.

I find that the clients will tell me well in advance that they are seeking to get a mortgage - because it’s me organising the mortgage -and so I get the opportunity to plan their earnings much more sympathetically than I could as just the accountant.

I also routinely say to them all “do you want to pay little tax or do you want to borrow money, because you can’t do both at once.” Indeed this has been one of the strongest ways I’ve “policed” clients over the years steering (most of) them away from anything “iffy”

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By Roland195
11th Jun 2019 14:19

As far as I can tell, this is now part & parcel of the job however I agree that it is beyond frustrating when an issue you warned them about arises and it then seems to be your fault or responsibility to fix.

I've ranted on here more than once about the ridiculous system that exists for mortgages for the SE, particularly Owner Managed Companies - it's truly shocking how little the company accounts seem to matter for one thing.

I'd love to see some sensible guidance from the institutes that wasn't veiled threats.

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By ireallyshouldknowthisbut
11th Jun 2019 14:54

I was asked last week to supply:

“letter from Accountant confirming your percentage shareholding within the Limited Company"

I responded with "Companies house states as of XYZ that my client holds 12 of the 36 shares, so 1/3 of the total"

And they asked again for the %..........................

I explained "my client has 33.33% recurring of the share capital, (12 divided by 36, or one third) "

Which they were happy with.

Edited for typo!!!

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Replying to ireallyshouldknowthisbut:
Hallerud at Easter
11th Jun 2019 14:28

You might want to edit the reference to 33, I started wondering if my mental arithmetic skills were failing.

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Replying to ireallyshouldknowthisbut:
By atleastisoundknowledgable...
11th Jun 2019 22:37

TBF, you didn’t answer their question the first time.

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blue sheep
11th Jun 2019 14:27

Clients do get very upset about the mortgages (understandable to some extent)

I had a similar situation recently but I explained to the client exactly how quickly we could move if we were given the correct information, and in fairness to the client they did call me about 2 weeks in advance of the year end to warn me, in which case I was quite happy to move quickly for them.
If I get a situation like that they are first in the queue for a fee increase, along with those they pay late.

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Image PN
By Mr Hankey
11th Jun 2019 14:52

Urgent! Urgent! Urgent! Drop everything at the click of my fingers! The world revolves around me! I emailed one minute ago, why haven't you got back to me yet?

Yep, sure know that sort of client.

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By Chris.Mann
11th Jun 2019 17:03

You obviously overlooked the fact that you only act, for the one client.
And yes, he/she is indeed, the “special one”!

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14th Jun 2019 10:08

Personally I am fed up with mortgage companies ignoring the agreement they came to with HMRC (via council of lenders) that accountants produced tax calculations and overviews are sufficient.

Started to bill the mortgage advisors for certificates and projections if they have already had tax cals/overviews and for that matter silly questions, because they are too lazy to check there own file first.

Edit: HSBC should have been HMRC

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By Duggimon
12th Jun 2019 09:00

I will never understand mortgage advisers asking for projections. I'm sure, like me, the rest of you only ever send out projections with a disclaimer along the lines of "I have made these figures up, they might be a good guess but they're still a guess, don't anybody rely on them for any reason".

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By ireallyshouldknowthisbut
12th Jun 2019 09:06

Re projections, as an ICAEW member i am strongly advised (also known as dont do it) not to provide for mortgage purposes, given they are of course bobbins.

This then causes conflicts with the broker/lender/client who say "but all the other accountants do this". When the other CA's I talk to off forum......don't do it either.

I fail to see how any accountant can do projection for mortgage purposes in any case, unless the business is exceptionally stable.

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By towat
12th Jun 2019 12:32

Mortgage advisors are the bane of my life, usually still asking for SA302's, and trying to explain the difference between self-employed, and Ltd Co profits then explaining why year end isn't 5th April and dividends are paid on different dates so may overlap tax years...

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Glenn Martin
By Glenn Martin
12th Jun 2019 12:59

The mortgage info is a bit of a mess as a lot still ask for SA302, then also want an accountants reference, I thought lenders had agreed what was acceptable yet they all seem to do their own thing.

I had one last week where someone said his mortgage was due to expire in 7 days could I sort it out for him.

His earnings have been poor for last year so would not get loan.

What is the answer then?

How about giving more than 7 days notice, if you had told me a while back we could have increased your salary to give you the income you need.

Client was miffed I was not more helpful, but failed to remember I had closed the miracle department down.

I am actively trying to get my clients all with one of 2 brokers who are clients and I work well with, as when clients go with people you do not know it goes pair shaped.

I also see an increasing trend where with people who cannot get a mortgage, the mortgage guys don't admit they are unable to do it.

Instead they try and blame us "All your accountant needs to do is say this or do a projection showing you can afford it"

Well if you accountant would have just done this you would have got it etc.

FCA regulation still seems loose in the mortgage world.

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Jennifer Adams
By Jennifer Adams
14th Jun 2019 09:43

One of the main benefits of Accweb is reading such posts and finding out you are not the only one! I have lost count of the number of times I've been bombarded with 'I need a (re)mortgage... it ceases next week'.

And yes... usually a phone call every morning and afternoon until accounts are produced (invariably from figures produced the week before so jumping the queue).

I get a 'I need an SA 302' from the client (brokers still use that) and I explain that there is more to it than that (e.g Tax Over view). So I always always ask for the name of the broker the client is using and ring to find out exactly what they have been told. You will invariably find that they have not been given the full story.

I am finding that lenders are getting more lenient with their criteria as there are less mortgages being sourced. There is one lender who will lend on company gross income - Santander. This is for a personal mortgage not a company one by the way

In a situation similar to your own I was asked to explain why no div etc. and wrote a short letter of explanation. By the way... never do a 'to whom it may concern' always find out who the lender is and write the letter to them.

A good broker will advise client to wait until next years accs are done and then show a dividend. You can get a mortgage with just one years accounts now.

You need to be very careful with giving projections - I would refuse in case there is any come back. Always think about your professional indemnity insurance.

In fact when I send accounts/letter/whatever I always put a rider that 'these accounts have been produced for tax reasons only and are not intended for any other use' .. or somesuch.

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By enanen
14th Jun 2019 12:23

As my crystal ball does not work anymore, I refuse to do projections for mortgages.

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15th Jun 2019 12:15

Respectfully, I ended up in a similar situation to your client and am furious that despite a perfect payment history I'm stuck with a 4.5% rate. Since I understand the issue a bit better I'm trying to sort it out, but since (after tax) mortgages are usually people's biggest outgoing it's understandable that they get upset easily, and some understanding of other humans wouldn't go amiss amongst some other contributors.

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