4 Important Questions a Company Director Should Ask When Getting the Right Mortgages


All companies are created differently. So this means a high street lender may inconsistently treat a company director.

If you are a company director looking for a mortgage in the UK, there is a chance that you have been offered different deals with dissimilar interest rates, some of which you turned down.

However, it is reasonable to get a first or second mortgage or even get to-let property as a company director. Most likely, you will need to look for the best mortgage lenders, and the best way to achieve this is to ask the following questions:

1. What Income Are You Allowed to Include?

There are ultimately two ways a director of a company may pay themselves from their companies’ income. Both of them might be included as proof of income when getting a mortgage.

These include dividend income from net profits and basic salary. From the tax perspective, it can be helpful to take a small amount of basic salary and pay yourself.

This can be great if the earnings of both dividends and basic salary provide sufficient evidence that you are capable of getting a mortgage and paying it off.

The good news is that many lenders know how the remuneration of company directors works and will acknowledge the profits made in the business as evidence of their earnings.

We can help with all of these queries at Right Mortgage Uk

2. Which Documents Do You Need to Prove Your Income

 company director looking for a mortgage

As a director of a company, lenders will ask for some documents so as to prove your income. The proof required can be higher from certain lenders when compared to others. But the major ones include:

  • SA302 (request from HMRC or download it online)
  • Bank statements for the past three months (both business and personal bank statements)
  • Full Finalized accounts

Note that some mortgage lenders may not ask for either of these documents, whereas others may need one of them.

3. How Much Will You Be Able to Borrow?

Mortgage lenders will always assess mortgage amounts depending on a company director’s income. After Mortgage Market Review, mortgage lenders assess outings as well as the director’s income.

The reason for this is that the outgoings are as vital as income. Basically, this enables mortgage lenders to determine whether you may afford to take and repay the loan every month.

While mortgage lenders usually look at the general financial picture, the income also provides a guideline for the total amount of money you may borrow.

4. How Old Should Your Bank Accounts Be?

Many high street lenders need a minimum of around two years of finalized bank accounts submitted to the HMRC. In case you have more than two years’ accounts, it will be much better since they may demonstrate that your company is on a secure and stable footing.

Fortunately, several mortgage lenders are prepared to loan company directors with one year’s bank accounts. But these lenders might perceive you as a higher risk and may need bigger deposits.

The Take a way!

As a company director, know that several mortgage firms may not put in more effort to understand or know how you generate your income. But now you know that several mortgage lenders know how the remuneration works, and they will be willing to grant your wish.

Leave a Reply

Your email address will not be published. Required fields are marked *

agent for small businesses Previous post 7 Reasons to have a professional tax agent for small businesses
ULIP Plans Next post Difference Between Type I and Type II of ULIP Plans