Larger Mortgages for Company Directors

If you’re a company director, getting a mortgage can seem like an uphill battle. You have been prudent and not taken unnecessary income from your Ltd company, but lenders are assessing you on the money you have personally withdrawn from your business and restricting how much you can borrow.

This happens because most lenders are set up for straightforward salaried employees or sole traders. When income comes from company profits, many lenders struggle to assess it properly.

The result is that you’re told you can borrow far less than expected, you’re asked for personal tax returns that only show the bare minimum of income you need right now. Or even worse, you’re declined despite having built up a solid business that is making excellent profits. 

The problem is company director income doesn’t fit neatly into a standard payslip like a PAYE employee. Profits before and after corporation tax, directors loans, salary, dividends, pension contributions, are often misunderstood or ignored altogether. To the wrong lender, that complexity looks like risk, even when your income is stable,tax efficient and predictable.

Meanwhile, to add insult to injury, employed family and friends are getting mortgages easily, simply because their often smaller income is easier for lenders to understand on paper.

Apply to the wrong lender as a company director and you risk wasted time, unnecessary stress, and a declined application that still leaves you no closer to buying the property you want.