It’s become widely recognised that since tighter financial regulations came in, triggered by the economic crisis, securing a mortgage has become problematic in general. If you’re self-employed and working as a company director you face even more obstacles when looking for a lender.
No more self-certification
In the days before tighter rules, many self-employed people got self-certification mortgages, where lenders didn’t check their stated income. However, they became known as ‘liar loans’ due to instances of and potential for fraud, and were done away with, dashing the hopes of genuine applicants. A few years on and company directors continue to struggle to get a mortgage, even if they and their businesses are successful.
Restricted borrowing
Most lenders calculate mortgage applications solely based on a company director’s monthly salary and/ or dividends. This ignores all of the hard work that directors put into their businesses, with monthly income only representing part of a director’s value – it can be a lot lower than the actual net profit that is retained in the business.
That’s where we come in.
Assessing net profit
Our years of experience in the mortgage market means that we know lenders that also take into account the net profit of a business. On this basis, we have helped directors secure mortgages that reflect the true performance of their business. With so many new businesses being formed these days, we imagine that there are many directors out there who are currently having a tough time with lenders. If you know a company owner who could do use our help, let them know there is a way forward.
Contact me to talk about mortgages for company directors: dbaird@limetreefs.co.uk.
