It is possible to get a mortgage if you were running your firm as a sole trader, but you are now operating as a limited company.
You will need to have stayed in the same line of work and be able to provide proof of your income when you were a sole trader. You may also have to provide an accountant’s certificate.
Even if you have been running your business for years but change the trading structure to a limited company, some lenders will treat the firm as a brand-new business. This is a problem if they ask for two-year's accounts.
Some lenders will assess your overall financial situation based on how long you have been running your business and not on the trading structure. They will either take an average of your last two’s years income, use your lowest annual income figure over the previous two years or take the most recent year's income.
Aaron Strutt, product director at Trinity Financial, says: “Our brokers have access to a range of lenders offering mortgages to limited company directors.
"NatWest has an attractive policy because it provides mortgages to limited company directors when they have one year’s full finalised accounts, providing the limited company has not had a change of ownership.
“The bank will take an average of the most recent year's salary and dividends for the limited company and the previous year's net profit as a sole trader. If the salary and dividends are lower than the previous year’s net profit as a sole trader, the bank will use the salary and dividends.”
Another large lender will use the net profit of the business plus the salary and then apply a 4.75 times salary income multiple.
Are the mortgage rates competitively priced?
Trinity Financial has access to lenders providing mortgages for company directors, and the rates are impressively priced.
The larger banks and building societies do not charge a premium for business owners and here is an example of some of the great rates available at the moment.
Call Trinity Financial on 020 7016 0790 to secure a limited company mortgage or book a consultation