How to get a mortgage as a Company Director
When you run a company that has a limited status, it can be tricky to determine exactly where to start your search for a mortgage. Your self-employed status can be a real obstacle, even if your company is doing really well for itself, with the true irony being that you may have more trouble buying a home than the people whose wages you pay.
Add into the mix that as a company director, your finances might be a tad complex and mainstream lenders can take an awfully dim view of people whose income is not straightforward, consistent PAYE.
The good news is that a mortgage for someone in your position is absolutely not out of the question, whether you have a good credit rating or even a poor one. The fact is that many people with a chequered financial past and working as a director of a company, don’t even bother applying, so sure are that they’re not going to meet the required criteria.
At Niche Mortgage Info, we are on a mission to spread the word that there are options available through specialist brokers that are far more flexible and understanding to personal circumstances that aren’t quite the norm. We recommend specially chosen mortgage brokers that take the bigger picture into consideration and have access to special rates and products you won’t get direct from the main lenders. As long as you can prove the mortgage you’re applying for is affordable, your chances of success are very good.
The rules governing the extra work that will need to be done to qualify for a mortgage with bad credit can be seen by viewing our self employed and bad credit page.
What will you need?
Typically speaking, mortgage lenders will need to see that your limited company has been in business for a minimum of a year before they’ll consider offering you the chance to own your own home. There’s one or two exceptions to this rule, as if you’re in a very specific line of work, like a doctor, you may be considered without needing to have been trading for 12 months. However, this only applies if you have contracts in place that are proof of future income.
Mortgage companies will also usually want to you to provide at least 12 months of accounts and sometimes up to two or even three years of profit and loss. It’s important to differentiate between a tax year and a trading year, as if your accounts don’t cover April to April, your initial tax return might not span an entire trading year. In this case, the lender may choose to take a 1 year snapshot, instead of making you wait until the very end of the tax year.
If any of this sound like you, we’d recommend have a chat with one of our recommended brokers to see if you qualify.
To be as prepared as you can be, you should make sure you have the following.
- Tax Overview (minimum 1 year)
- Tax Calculation (most recent year)
- Company Accounts (minimum 1 year full accounts)
- Projected Accounts for the current tax year (these may be requested to be supplied by your accountant if you have less than 3 years history)
- Current Tax year Salary/Dividend projection* (these may be requested to be supplied by your accountant if you have less than 3 years history)
- Current Tax year projected accounts (these may be requested to be supplied by your accountant if you have less than 3 years history)
- 3 Months Personal Bank Statements
- 3 Months Business Bank Statements
- 3 Months Wage Slips (if applicable)
- Credit Reports from the 3 main agencies – More info