So, instead of wondering and worrying about what sort of information you may need to provide to get a mortgage as a Limited Company Director, contact the professional experts of your choice today and let them get you started on the road to your new home.
We’ve investigated a Limited Company Directors Mortgage for you and collated our findings into a series of ‘top tips’ to help you have the highest chance of a successful application process.
Know how mortgage lenders work and how they’ll review your application. For example, in terms of assessing your income, as a director of a Limited company, the majority of lenders will only use your salary derived from the business, combined with the dividends you take.
Know the timescales mortgage lenders may require information over. For example, it has been common for mortgage lenders to request that you provide salary and pay information over the past three years. However, of late, more and more companies will work with you with just one or two years of trading accounts - to know which is which, you’ll need your mortgage advisor's help.
Get to know your mortgage advisor, and ensure they’re experienced at arranging Limited Company Director Mortgages. It’s all very well for the lenders to ask about your pay and dividends, but as you are already aware, this does not always reflect “the whole story” of how a business works.
Make sure your mortgage advisor is used to applications that need to include some or all of the following common business practices/occurrences.
You must use a specialist mortgage adviser, who in turn will have access to specialist Mortgage lenders who are better able to consider all the nuances of your application than a typical high street lender may be.
For example, lenders - whether from the High Street, major financial institutions or those niche mortgage product companies that you’ve never heard of previously - with experience in providing mortgages to company directors always understand that a company director’s base salary provides only a tiny part of the picture of how profitable the company is. The business owner must find themselves a specialist lender who is willing and able to consider the following points as well when assessing their Limited Company Director mortgage application:-
The starting point for your road to a mortgage, then, is to find an experienced, professional mortgage adviser who can make the rest of the journey as smooth as possible for you.
Make sure your mortgage advisor is used to applications that need to include some or all of the following common business practices/occurrences.
- choosing 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, which is not recognised by some mortgage lenders and therefore reduces the amount of lending available unless a specialist Limited Company Director mortgage lender is approached.
You must use a specialist mortgage adviser, who in turn will have access to specialist Mortgage lenders who are better able to consider all the nuances of your application than a typical high street lender may be.
For example, lenders - whether from the High Street, major financial institutions or those niche mortgage product companies that you’ve never heard of previously - with experience in providing mortgages to company directors always understand that a company director’s base salary provides only a tiny part of the picture of how profitable the company is. The business owner must find themselves a specialist lender who is willing and able to consider the following points as well when assessing their Limited Company Director mortgage application:-
- Operating profit (both before and after taxation)
- Director’s salary and dividends
- Latest years trading figures
- 1 years trading overall (as opposed to the more traditional three)
- Other applicants employed by the same company (for example, if your spouse or partner works for/with you, you need a mortgage lender who can look at your application together)
- References from a qualified accountant (your company accountant, who has prepared your annual returns, is perfect for this)
The starting point for your road to a mortgage, then, is to find an experienced, professional mortgage adviser who can make the rest of the journey as smooth as possible for you.
