Limited Company Director Mortgages

Limited Company Director Mortgages – finding a fair deal

For a Limited Company Director, the biggest challenge in getting a mortgage is to make sure you’re offered a loan amount and mortgage rates that you feel are fair.
As long as you can provide business records and have good credit, Limited Company Director Mortgages aren’t hard to find. At Mortgage Marketplace we’ll help you find the most suitable deals.

Can I get a mortgage as a Limited Company Director?

It should be straightforward to find a Limited Company Director mortgage if business is going well and you have a couple of years’ accounts.

The only hurdle for Limited Company Directors is making sure they can borrow the amount they are aiming for. The reason is that mortgage providers decide how much to loan you based on your income. But Company Directors typically pay themselves a low salary and take further money from the business as dividends.

If the lender only takes your salary for the loan calculation, you won’t achieve your full borrowing potential. We could find you a mortgage provider that will look at salary, dividends and your company’s retained profit to come up with a fair deal so you can borrow more.

What size of deposit will I need?

Putting down a bigger deposit will get you better mortgage deals and lower rates. It’s possible to get a mortgage with just 5% deposit, but you will need an excellent credit score for this and your monthly repayments will be high.

A larger deposit means a smaller Loan to Value (LTV), and if you can get below an 80% LTV – by having a 20% deposit or more – you’ll unlock the most competitive rates and a wider choice of lenders.

A mortgage calculator can be helpful in exploring how a higher deposit can reduce the monthly repayments on your mortgage.

Assessing income for a Limited Company Director mortgage

Specialist lenders understand that a Company Director’s salary isn’t a realistic indication of earnings. These lenders will consider some (or all) of the following to assess mortgage applications:

• Operating profit (before or after tax)
• Director’s salary
• Dividends and Share of Profit
• Latest year’s figures
• Other applicants employed by the company

Specialist mortgage providers will often underwrite a mortgage individually, looking at your specific business situation and financial details to create a bespoke mortgage offer.

Remember that lenders will also take a look at your credit score. If you have adverse credit history it can reduce your choice of lenders and may mean you need to pay higher interest rates.

What happens if I have fluctuating income?

Many small businesses have variable income, so a lot of mortgage lenders will look at your accounts and take a two- or three-year average to calculate your annual income. Big variations in your company profits, and in how much you have taken out of the business, can sometimes make this more complicated.

Mortgage Advisors will recommend how to manage your application if your income is very variable. If business has seen a downturn in the past two years it can help to justify this to your lender and detail any steps you are taking to drive recovery.

How can a Mortgage Broker help with Company Director mortgages?

Mortgage Marketplace has helped many Company Directors achieve their property goals. By spending time with you and exploring all the details about your business and your plans, we can seek out the most valuable products.

We compare fees, rates and criteria across both high street lenders and specialist providers to recommend mortgage options. We will also support you through your mortgage application and make sure you have all the documents you need.

Mortgage Marketplace is a trading style of Mortgage Marketplace Ltd and its Appointed Representatives. We are authorised and regulated by the Financial Conduct Authority. Contact our registered office today for an initial chat about how we can support you to find a suitable mortgage deal.