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Limited Company Director Mortgages - How can I apply?
Can I get a mortgage if I am a Limited Company Director?
The mortgage market is open to everyone so even if you are a Limited Company Director you will be able to explore a range of different mortgage deals and options. You may want to opt for a specialist lender who understands more about you being a Limited Company director and knows how your income can work.
You can easily find specialist lenders with competitive interest rates through the help of a mortgage broker. Pia mortgage experts have access to a wide range of mortgage lenders including some deals that might not be available on the high street.
How do I document my trading history?
You will need to provide a trading history to your chosen mortgage lender to show your income and outgoings. You should seek the help of a chartered accountant to assist you when it comes to your finances to ensure that they are all in check and legitimate.
Should you decide to pay yourself your salary through a PAYE system then you must first register your company as an employer with HMRC. You will then receive your unique company reference number which will be used
The PAYE system makes it easy for lenders to look into the history of your earnings as well as the tax you have paid. Some lenders ask for up to three years’ worth of accounts so be prepared. No matter how you pay your salary and dividends you will need to make sure you can prove it to a lender.
If you pay yourself via dividends, then you will declare them in Director Minutes from the director’s meeting. As well as keeping Minutes you will need to provide Dividend vouchers for shareholders too.
Retained profits are documented through a balance sheet. You should get an accountant to assist you in recording incomings and taxes paid to ensure they are all correct and legitimate.
It is important to check a lender’s criteria before applying for a mortgage through them, some lenders do not take certain sources of income as an accepted form of income towards your mortgage assessment.
How do I prove my income?
The way in which you prove your income will depend upon how you pay yourself. Usually, lenders will ask for at least two years’ worth of business and personal accounts. Lenders will want to see that you have paid your taxes correctly and that you have a reliable source of income.
Usually, lenders will want to see your SA302 forms as well as tax overviews. It is best to seek professional help especially when it comes to your income, some lenders will require you to use specific or chartered accountants so always ensure to check the lender’s specific criteria before applying for a mortgage.
What if I have fluctuating income?
If your income does change consistently then lenders will usually try to work out an average annual income. It can be best to find specialist lenders who understand more about how your income works. Lenders will want to know that the income is regular and enough to afford the repayments on your mortgage. If you fail to keep up with repayments on your mortgage, then your home could end up being repossessed.
How much can I borrow?
The amount that you will be able to borrow will depend upon how much you earn annually. Lenders will make you undergo an affordability check in order to see for themselves your credit history and incoming to ensure you are a reliable borrower.
You can access up to five times your annual salary if you have a good credit rating, but this will be subject to lenders. As a Limited Company director, you may have retained profits in your business that you may want to be included in your income, this could require a specialist lender.
It can be worth saving up for a larger deposit before approaching a lender to show how serious you are about investing in property. It will make you more attractive as a borrower to the lender.
How can a Mortgage Broker at Pia help me?
Pia has access to a wide range of mortgage lenders and can access some mortgage deals that are not available through high street lenders. As a Limited Company director, you will have a lot of responsibility tied up in your company, so we are here to make the mortgage application process easier for you with tailored mortgage advice.
You may require a specialist lender if you want specific forms of income to be included in your affordability check. We can listen to your circumstances before picking out options for you when it comes to lenders.
It is important to approach lenders prepared to ensure that you maximise your chances of being accepted onto a mortgage. Not all lenders are authorised and regulated by the financial conduct authority, here at Pia we can ensure everything is legitimate as we are regulated.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE