Jump to content
jonnyboy

Can you repay a directors loan before a mortgage?

Recommended Posts

Hi Jonny,

Depends on the circumstances.

If you are intending to sell an encumbered property and then settle your directors loan from the proceeds, then your solicitor is correct.

If you intend to settle a mortgage in cash, from bank funds, then I cant see why you cannot pay your directors loan off first.

Hope this helps

Conrad

 


Conrad Paton

+44 7957 959851

conradpaton@yahoo.co.uk

https://www.linkedin.com/in/conrad-paton-424446110

 

Share this post


Link to post
Share on other sites

Thanks Conrad. My thoughts are that any excess cash in the company can be used to reduce the directors loans. What it sounded like to me was that I couldn't do this as I would have to reduce the mortgage first. I don't think that's right.

If I have a 20yr interest only mortgage and cash building up I don't see an issue with reducing the directors loan account but maybe I've misunderstood all this.

Share this post


Link to post
Share on other sites

Excess cash in the company is exactly that....excess.

You can buy a Maserati with it, pay off your directors loan, pay off your mortgage, buy another property, hire staff....whatever you wish!

Oh...forgot......or you can use it to instruct a different solicitor.

The choice is yours.

Conrad


Conrad Paton

+44 7957 959851

conradpaton@yahoo.co.uk

https://www.linkedin.com/in/conrad-paton-424446110

 

Share this post


Link to post
Share on other sites

Yeah so I have my own solicitor who was doing the purchase and then I found out they aren't on the mortgage company panel. Pain. And it's that solicitor that is saying that the mortgage must be paid back before any director loan.

I've found out that my solicitor was on their panel. They are trying to find out what happened. Hopefully it will work itself out.

Yes, I'm purchasing a BTL.

Share this post


Link to post
Share on other sites

Hi again,

As director of your limited company, you are in charge of it's finances. You decide who and what to pay first.

Unless you sell...

On 12/3/2019 at 4:25 PM, conrad_paton said:

If you are intending to sell an encumbered property and then settle your directors loan from the proceeds, then your solicitor is correct.

Then this ^^ happens 

You and your 'new' solicitor probably have crossed wires somewhere. Dont worry too much about it, let's hope your 'old' solicitor gets back on the case.

Conrad

 

 


Conrad Paton

+44 7957 959851

conradpaton@yahoo.co.uk

https://www.linkedin.com/in/conrad-paton-424446110

 

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

×