Limited Company Directors Mortgage
With so many people now being self-employed some lenders have changed the ways in which they will assess their income. This results in many customers being given incorrect information when applying directly to banks, building societies and often some of the less skilled mortgage brokers working in the market.
Can I get a mortgage if I’m a Limited Company Director?
Yes, rest assured there absolutely are lenders out there who offer mortgages to limited company directors, including a few of the big high street names. Use our Find A Mortgage tool and we can get you advice without having to leave your home.
What information do I need to provide to get a mortgage as a Limited Company Director?
As a director of a Limited company the majority of lenders will only use your salary derived from the business (referred to as remuneration), combined with the dividends you take. It is common for mortgage lenders to demand you provide information ranging back over the past 3 years! As you are already aware, this does not always reflect “the whole story” of how a business works. Common scenarios of business owners who struggle to obtain mortgage borrowing include directors who:
- choose to retain trading profits within the business
- have been trading for less than three years
- face differing levels of annual turnover, causing problems when “averaging calculations” reduce the amount of capital available to borrow
- employ family members within their business (often for tax planning reasons), which is not recognised by some mortgage lenders and therefore reduces the amount of lending available
Will I have to put down a bigger deposit as a Limited Company Director?
It’s not necessarily the case that you will have to put down a larger deposit as a limited company director. Depending on your circumstances, you will have access to the same offers as any other borrower – so that’s up to 95% of the value of the property available in straightforward scenarios, with a larger deposit potentially required if you’ve an adverse credit ratings or to gain access to more attractively priced mortgages.
How will the lender work out my income if I’m a Company Director?
Lenders with experience in providing mortgages to company directors understand that a company director’s base salary provides only part of the picture of how profitable the company is. It is crucial the business owners find specialist lenders who are willing to consider the following when assessing a mortgage application:
- Operating profit (before or after taxation)
- Directors salary
- Latest years figures
- 1 Years trading
- Other applicants employed by the company
- Reference from a qualified accountant
Our specialist advisors will assess your specific circumstances to help you achieve the maximum you can borrow, at the best interest rate available and will also speak directly to your accountant if required to obtain the correct paperwork.
If you have a limited company to accept income from your role as a contractor, please see our contractor mortgage page.
As a mortgage is secured against your home/property it may be repossessed if you do not keep up the repayments.