Mortgages For Business Directors FAQs
How is my mortgage application assessed if I am a Company Director?
Your mortgage application is usually assessed on your Director’s salary and dividends. At AdvantageFS however, we are able to arrange market leading mortgages where lenders will use your director’s salary, plus your share of the company’s profit. After all, this is money the company generated, you simply chose not to draw it. For certain individuals, this can be a much larger figure, leading to a much larger available mortgage.
Can I get a mortgage if my Company profits have not increased year on year?
Some lenders consider businesses that have had a decline in profits in recent years, whereas others won’t consider a drop of £1! Either way we can help in these kinds of situations, it all depends on why the profit has dropped and by how much.
How many years worth of Company profits will I need to show, to be able to apply for a mortgage?
Some lenders will consider you for a mortgage even if you have just 1 year of company accounts. If you don’t have 2 years’ worth of accounts just yet, its definitely worth getting in contact with us as we have a variety of lenders that we work with; many of whom will consider an application with just one year’s accounts. All lenders will have different criteria. The longer you have had your accounts, the more insight a lender will have into your potential finances, and so you may have access to a greater range of mortgage lenders.
What will I need for a Limited Company mortgage application?
As well as your share of director’s salary, you will need to show your share of dividends or the company’s net profit. This can be before or after corporation tax, dependent on the lender. Lender’s will typically use full accountants signed off by a suitably qualified accountant or a signed accountant’s reference from them.
Will I need a larger deposit towards a mortgage if I am a Company Director?
If you have an adverse credit rating or adverse events in your credit history, you may find that you need a larger deposit. Many Directors find that they have the same access to lenders as those who are not considered self-employed; up to 95% of the value of the property. We will be able to advise you on the best way forward, depending on your circumstances.
How do I get a copy of my SA302?
Your SA302 (also called a Tax Calculation or Tax Computation) shows your income for that particular year. It also includes National Insurance and tax contributions at you marginal rate. Your SA302’s are available via your self-assessment tax portal on the HMRC Revenue and Customs website. You will need your UTR (unique taxpayer reference) to access this.
If you use an accountant, then these should be readily available via the accountant. Remember, the lender needs the SA302’s to be less than 18 months old. This means the 5th of October marks the time of the year that the current year’s tax return must be submitted if you want to use the income for a mortgage. HMRC give you until January of course so your hand may be somewhat forced by the situation.
