Mortgages for company directors
There's a misconception that mortgages for business owners are almost impossible to secure because your income derives from being a company director. We are here to tell you that that’s not the case. However, there are certainly stricter criteria that you need to meet as the head of a limited company, but rest assured, you are still eligible for a mortgage loan from a range of specialist lenders.
Firstly, most high street lenders expect basic criteria that requires you to have been trading for a minimum of 12 months, which allows you to provide a full year's tax accounts. You’ll also need to provide information and documentation covering the salary and/or dividends you have drawn from the company. This is considered your ‘income’ and is used to determine how much you can borrow.
When applying for any mortgage, your mortgage broker requests you prove that you have a current, stable income, and the necessary precautions in place to be able to meet the expected future payments over the course of your mortgage term.
This all sounds simple enough, but mortgage requirements for company directors aren’t as straight forward to prove, and mortgage approval is often harder to obtain.
Most lenders, especially the typical high street lenders, are left without the reassurance of a long-standing company employing the borrower the expected lengthy periods. Minimising the risk that comes with employment can reassure a lender that the borrower should be able to pay their mortgage over the next 20 years, but as a company director there isn’t such a strong assurance of a guaranteed annual income.
This is typically the view of the high street lender, yet views on this vary. Some of the lesser-known lenders are willing to take a broader approach to income streams than others. Some will even take the net profits of the business as well as company director personal earnings into account.
This is the precise reason why we always recommend speaking to one of our specialist mortgage brokers. They provide free no-obligation mortgage quotes, including the best interest rates on offer and lowest monthly payments. This should increase your options significantly before you begin approaching mortgage companies yourself.
With access to a huge pool of lenders and a great deal of experience in securing suitable mortgages for company directors, CLS Money is well placed to help you find a deal that suits your circumstances.
After all the hard work it took becoming a limited company director, we believe you should be rewarded with a mortgage that matches your acheivement. We’ll guide you through the mortgage application from start to finish, ensuring you are in a great position to be accepted by the specialist lenders that can offer you the prime terms on a director’s mortgage.