Guide to Mortgages for Sole Traders, Partnerships, & Company Directors
Business owners; did you know that you have many options available to you when it comes to borrowing enough funds to purchase or remortgage your home?
Clients trust us to secure limited company mortgages as well as self-employed mortgages – we work with lenders that can use net profits, salary and dividends. All cases are looked at on an individual basis; we are able to work with lenders that will use the latest years income only or take an average of several years. Mortgages for company directors don’t have to be complicated. Our approach is the perfect solution for clients.
Lender policy on income requirements varies widely across the market, so even if you have been declined by banks on the high street previously, talking to an experienced broker can lead to a positive outcome. Complicated income streams are what we are good at!
Most lenders require 2 years trading history, a handful will accept 1 years trading history.
Fox Davidson can secure finance for clients with as little as 6 months trading history in a limited company. A lender would need to see that the change to a Ltd company followed a successful period of self-employment as a sole trader or in a partnership.
How much can you borrow?
Being a company director has many benefits when it comes to affordability. Fox Davidson can utilise lenders that will take your income at its highest point, profit before corporation tax, plus your salary.
Sole traders and partnerships will need to provide their tax calculations, income is based on the net profit figure as declared to HMRC.
Lenders use affordability models to determine how much you can borrow. If we were to convert this into an income multiple, we would expect to be able to achieve 5 to 6 times your income.
The table below shows how lenders treat income based on your self-employed status and the documentation required.
Limited company, self-employed or mortgages for business owners – the team at Fox Davidson are waiting to help. Call us today.
A mortgage is a loan secured against your home or property. Your home or property may be repossessed if you do not keep up repayments on your mortgage or any other debt secured on it.