If you are a director of a limited company, you will need help from this broker to take care of your mortgage deal. Some people see company directors as individuals that may get mortgages quite easy.
However, many lenders consider company directors and other self-employed individuals as high-risk borrowers. In this article, we have things you need to know about mortgages for company directors.
Limited company director and a mortgage
This is the most frequently asked question. So, can a limited company director secure a mortgage? Yes, you can.
However, you need to hire this broker to help you with the paperwork and the best advice. Keep in mind that the assessment would be different from a full-time employment customer.
At some point, you need to find a lender who understands this situation. Choosing the right broker will also help you to take care of the rough patch to secure a mortgage.
Trading history and deposit requirements
The lender will ask you about how long you’ve been in business. The longer the better – you need at least to be in the business for 12 months. Unless you are a doctor, this is the minimum length of time to get a mortgage.
Practically, you will have a set of accounts for a full tax year. When you’ve been in business across two tax years then the lenders may consider a snapshot of 12 months instead of allowing you to finish the second year before applying.
About the deposit, a company director, as well as the business owner, will be asked for a deposit. The amount depends on how straightforward or complex your application is.
You may get up to 95% loan to value. However, you may face something different when you go for specialist lenders since why will mitigate any increased risk when it comes to larger deposits.
What if you have a bad credit score?
Every borrower with adverse credit might be restricted by several lenders. The number depends on how severe yet recent the issue is.
Keep in mind that several lenders might be diminished further if the borrower has other lending requirements such as if you’ve been in business for one year or you want to use the most recent year’s sum.
What if your business has declared losses in the last three years?
There is another difficult situation for company directors to get a mortgage. If your company has declared a loss in the last three years, it might be a bit difficult to secure a mortgage with high street lenders. The loss indicates a lack of income reliability – in other words, it means a higher risk.
Other than that, the situation would be harder for you if your company has declared a loss in the most recent year. Unless your salary is deducted before profit, your application is unlikely to be approved by the lender.
Meanwhile, you have a better opportunity if you have made a recovery since. Even you have an option to go to several specialist lenders as well. All you need to do is to call this broker.