Limited Company Director Mortgages
Mortgages For Directors of Limited Companies – tailored lending solutions for ambitious business owners like you.
Limited Company Director Mortgages
Mortgages For Directors of Limited Companies – tailored lending solutions for ambitious business owners like you.
Your property may be repossessed if you do not keep up with repayments on your mortgage.
Some mortgages may also have a fee for mortgage advice. The fee that you will pay depends on your circumstances. The maximum fee is 1% but a typical fee is 0.30% of the amount borrowed.
What is a Limited Company Director Mortgage?
Owning your own company gives you certain independence, but it also complicates the mortgage process. Many traditional lenders will not recognise your actual income because a lot of it is paid through dividends, retained profits, or business expenses.
Limited Company Director Mortgages have been developed to acknowledge these complications by evaluating your income based on your salary and the performance of the company. This way, your borrowing ability is indicative of your true earnings and not just the income shown on documents.
When evaluating loan applications from directors in limited companies, lenders look at a number of factors beyond the essentials. These include:
Comprehensive Income
Instead of just considering your PAYE salary, lenders may also include any pre-tax dividends you take from the company and even retained profits from the company to form a clearer picture of your income.
Trading History
If you have a track record of trading, usually two years or more, this reassures lenders regarding your company’s condition, which aids your application.
Affordability Assessment
When assessing the application, lenders will review both business income and personal income so they can assess what size mortgage can realistically be managed without financial difficulty.
What Documents Should Limited Company Directors Prepare for a Mortgage?
To apply successfully, directors will usually have to provide:
Having these documents to hand can speed up your application time and increase your approval rate for a favourable mortgage.
Your Journey to Home Ownership as a Company Director
At SAM Mortgages, we specialise in finding directors like you viable mortgage products that adequately represent your financial circumstances.
Our team understands the challenges that come with being a business owner, including irregular income streams and personal vs company finances. Because of this, we will spend time unpacking your whole earning potential and will only work with lenders who value the entrepreneurial journey of a business owner.
Whether you wish to expand your property portfolio, buy your first home or refinance, we are here to help you through the process in a smooth, transparent and personalised manner.
– Call us on 01604 261685 today or book an appointment online to start your journey.
How Are Mortgages for Limited Company Directors Different from Standard Mortgages?
Mortgages for limited company directors stand out to the lender in several areas:
In consideration of the structure of a person’s income, they will consider more than just a salary when reviewing your affordability position, including pre-tax dividends as well as previously retained profits.
Risk Profile – Lenders might consider directors a slightly higher risk due to being self-employed, which may affect the rate and terms of the mortgage.
Specialist Lenders – You may need a specialist lender who deals with self-employed and director mortgages.
Taxation Advice – There may be linking of personal and company finances; obtaining expert advice is essential.
Frequently Asked Questions
Do I need to have two years of accounts experience to apply?
Can I use retained profits to support my application?
What if my income goes from year to year?
Are interest rates higher for directors?
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How Much Do You Need?
Our mortgage calculator provides a guide on how much you could borrow and the required deposit. This is only a guideline; to find out a more accurate amount, it is best to speak to one of our advisers.
