As a limited company director obtaining a mortgage can be slightly different compared to applying as an individual. Here are some key points to consider when applying for a mortgage as a limited company director:
- Lenders: Most lenders will treat you as Self Employed when applying for a mortgage if you have more than 20% shareholding in the Limited Company.
- Income Assessment: Unlike salaried employees, limited company directors typically draw income from their company through a combination of salary and dividends. Lenders assess your income based on these factors. They may consider the company’s trading history, retained profits, and projected income when determining your affordability. Some directors leave money in the company and salary and dividends do not represent what they could have earnt. If this is the case please check out our page on using your share of net profit to get a mortgage.
- Accounts and Documentation: You will need to provide several documents during the mortgage application process. These typically include your personal and company accounts, tax returns, and bank statements.
- Specialist Mortgage Brokers: Working with a mortgage broker who specializes in limited company director mortgages can be beneficial. They have expertise in dealing with lenders who understand the specific requirements of limited company directors and can guide you through the process. Contact Us
- Deposit: As with any mortgage application, you will need to provide a deposit. The size of the deposit can affect the interest rates and mortgage options available to you.
- Credit History: Your personal credit history will still play a role in the mortgage application process. Lenders will assess your creditworthiness, so it’s important to maintain a good credit score.
- Affordability and Affordability Assessments: Lenders will assess your affordability based on your income, expenses, and commitments. They will also consider any other outstanding loans or financial obligations.
- Personal Guarantee: In some cases, lenders may require a personal guarantee from the director, especially if the limited company has a limited trading history or financial stability.
Mortgages for Limited Company Directors do not have to be complicated. It’s important to note that each lender may have different criteria and requirements, so it’s advisable to seek professional advice from a mortgage broker or financial advisor who can help you navigate the process and find the most suitable options for your specific circumstances.