If you’re the director of a limited company, you might be wondering if you count as self-employed. The answer? Yes! Even though you’re operating through a company, mortgage lenders typically view you as self-employed. But don’t worry, this doesn’t mean you’re at a disadvantage. With the right preparation, securing a mortgage can be straightforward and achievable.
Being a director often means taking your income as dividends rather than PAYE. While this is tax-efficient, it can make things trickier for lenders. Your income might depend on your company’s performance or be tied up in retained profits. Maybe you haven’t been trading long enough to show years of consistent earnings. These factors make your financial picture a bit more complex.
The good news? Specialist lenders understand these nuances. They’re ready to take the time to assess your unique circumstances, and we know exactly who they are.
To give yourself the best chance of approval, here are some essentials you’ll need to gather:
Your credit history matters too. Issues like late payments or county court judgments (CCJs) could raise concerns, but they’re not deal-breakers.
Here’s the truth: You don’t always need three years of accounts. Many lenders are happy with just one year, as long as it’s uninterrupted and paints a clear picture of your company’s performance. Even if you’re newly self-employed, you can still make a strong case with projected income figures that show your business’s potential.
Yes, but it depends on the lender. Retained profits are often viewed as a safety net for your business, not personal income. This means mainstream lenders might not count them, but specialist lenders may consider them if you provide detailed accounts and financial proof.
It happens to the best of us, especially when starting out. A loss on your accounts doesn’t automatically disqualify you from getting a mortgage. Many specialist brokers understand that early-stage losses or older financial challenges don’t reflect your current position. If your business is now stable and profitable, there’s still a path forward.
Most lenders will ask for these documents:
Lenders often look at an average if your income varies year to year. This can be helpful if recent years show an upward trend in earnings.
Navigating mortgages as a limited company director doesn’t have to be daunting. With the right guidance and preparation, you can secure the financing you need for your dream home.
Got questions or ready to explore your options? Reach out to us today, and let’s make this process as smooth and stress-free as possible!
If you have questions about getting a mortgage with an adverse credit score, read our FAQs. Our wealth of knowledge within this market means that we’re confident in our ability to offer specialist mortgage advice and secure the mortgage you want regardless of your credit history.
Yes, company directors can get mortgages, but the process is slightly different from employed applicants. Lenders usually assess your income using your salary and dividends, or sometimes your share of net profits, depending on the lender’s criteria.
Most lenders will ask for:
Many lenders also consider just one year’s accounts if your business is fairly new.
This depends on your income and the lender’s assessment. Many lenders use your salary plus dividends, but some specialist lenders may also take retained profits into account which can increase the amount you’re able to borrow.
It can be more challenging, as not all lenders’ criteria fully support self-employed or limited company income. However, with the right advice and by applying to lenders experienced with company directors, you can often access the same competitive mortgages as employed applicants.
Yes, but your options may be more limited if you only draw a small salary and dividends. Some specialist lenders will consider retained profits in the company, which can help show your true affordability and increase your borrowing power.
