Mortgages For Self-Employed Directors

Getting a mortgage as a company director

Securing a self-employed director mortgage can be tricky, especially if you are only paying yourself a minimal salary. However, it’s not impossible, and this is one of the areas that Active specialise in.

Income and dividend payments

It is commonplace for directors to pay themselves a salary that is below the next tax threshold, retain more profit in their businesses and pay themselves a large dividend. Tax on dividends is lower than on income, so it makes sense for directors to do so, to maximise their income levels.

However, many high street banks will only consider the applicant’s personal salary income, which can be significantly lower than their real take-home amount. This, therefore, limits the amount the bank is willing to lend you, despite being the director of a (hopefully) profitable business.

Proving your income for a mortgage

Whether you are employed or self-employed, mortgage lenders need you to prove your income. This is relatively straightforward as an employed worker as you have a contracted salary amount, proved by your regular monthly payslips. If your payslips do not reflect your whole income as a director of a business, i.e. your dividend payments are not shown, then a high street bank may consider you to be a higher risk borrower. This could lead to non-acceptance or a less ideal interest rate.

Specialist lenders in self-employed director mortgages

Don’t fret, your dream property is still a possibility. It is just advisable for you to find a lender who specialises in mortgages for self-employed directors looking to make their property purchase. These specialist lenders will consider your circumstances and your dividend payments as well as all other criteria that self-employed directors need to meet.

Expert director mortgage advisers

Active has a team of mortgage advisers that are experts at working with self-employed directors, securing deals, and making their property dreams a reality. Whether it is your first or your tenth property, Active’s self-employed mortgage team will guide you through the process from application to completion.

Our expert mortgage advisers work with the UK’s self-employed business directors to find them top mortgage deals, and it is easy to book a consultation with a specialist. We will work with you to find out what you can afford, what type of property you are looking to buy and more about your circumstances, so we are primed to find a specialised mortgage deal that you, as a self-employed director, deserve.

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