Company Directors & Partnerships
Dream home, fantasy extension or lower interest rate. Everything considered.
Client’s Guide
A guide to mortgages for the Self-Employed, Company Directors and Partnerships.
Investors Guide
A Guide to Mortgages for the Self-Employed, Company Directors &
Partnerships
Dream home, fantasy extension or a lower interest rate. Everything is considered.
Whether you’re a limited company director, employ 100 people, are a sole trader or partnership, being a business owner is never easy. It doesn’t matter if you are just starting out or if you’ve been in business for over 20 years, it takes a lot to run a successful business. Traditionally getting a mortgage for self-employed businesses or company directors has never been straightforward.
At Principle Financial Services we understand how complex and time consuming it can be to get a mortgage, so we have produced this simple guide which covers key aspects of mortgage lending in an easy-to-understand way.
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A guide to mortgages for the Self-Employed, Company Directors and Partnerships.
How does a self-employed/ company director mortgage work?
Exactly the same as an employed mortgage, you can secure a loan against a property you own or wish to purchase based on your income and expenditure and the value of the property. The way your income is multiplied and the way your expenditure is calculated or deducted is the same as an employed person.
The mortgage products and interest rates are exactly the same whether your employed, self-employed or a company director. The lender will never charge you more for being a business owner. The interest rate is purely based on the amount you borrow against the value of the property.
However, the way they reach that income figure changes from lender to lender. Some are interested in your salary and dividends, others, the net profit of the business. Some will accept your accounts as proof of income and others will insist on HMRC Tax Year Overviews and Tax Calculations.
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A guide to mortgages for the Self-Employed, Company Directors and Partnerships.
What does the Principle process look like?
At Principle Financial Services we make it our mission to deliver a quality service that fits in with the way you run your business. We will always put you and your business first so that you receive the most suitable, holistic advice - putting people before pounds. Although, at times, it might feel as though you are being interrogated by the ‘Spanish Inquisition’ the questions we ask help us deliver mortgage advice suitable for your objectives and future aspirations. To this end we will ask questions about your income and expenditure, study your business accounts, look at HMRC documents and consider your credit position. Once we have finished gathering information we will move on to the next stage, research.
Researching the market is not just about finding a mortgage product but it is also about understanding and building relationships with reputable mortgage lenders. We have the tools, experience and expertise which allows us to navigate through the whole of
the mortgage market. This is very important when you’re a business owner, sole trader or limited company because one lender may consider something another may not and vice versa.
Once we have completed our research, we discuss your income and expenditure with the lender before we submit for a credit check to ensure that we are accurate in our submissions. We then apply for a decision in principle, which is an initial agreement from the mortgage lender that they will be happy to lend based on the information you’ve provided and your credit score. For your clear understanding we present our findings to you, we discuss the key documents, which includes everything you need to knowinterest rates, payments, early repayment charges and of course any fees invloved.
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A guide to mortgages for the Self-Employed, Company Directors and Partnerships.
For your clear understanding we present our findings to you. We discuss the key documents, which includes everything you need to know - interest rates, payments, early repayment charges and of course any fees involved.
Once happy, we submit the application to the lender and they begin their underwriting process. This will include an assessment of your documentation, a valuation of the property and your credit check.
We will also instruct solicitors to deal with the mortgage transaction. Whether it’s a purchase or a remortgage, having the right legal team on board is paramount to the process. The lender will then produce a mortgage offer and the solicitors will take over to move through to completion. For a remortgage this includes a review of the mortgage offer, the land registry and getting a new mortgage deed signed.
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A guide to mortgages for the Self-Employed, Company Directors and Partnerships.
In the meantime, we will sit down with you again and carry out a full final review process, dotting the Is and crossing the Ts. We will review the fine print of the offer and the insurances we have recommended for you, ensuring you are comfortable for completion to be set. If you are purchasing a new property, from the moment you exchange contracts you become
legally responsible for the property at this point, therefore we will ensure your home and lives are covered from this moment onwards. The mortgage then completes. Your new lender, rate and payment are all set up! We ‘turn on’ your insurances to ensure you are fully protected from the moment the mortgage has been set.
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A guide to mortgages for the Self-Employed, Company Directors and Partnerships.
Top tips for getting a mortgage when you’re Self-Employed, a Company Director or in a Partnership:
1. Gather your documents. Your accounts should be up to date and accurate, your tax year overviews and calculations are all necessary to completing a mortgage application and for us to understand your position fully.
2. Get a good accountant, make sure they’re not just minimising profit but that they understand your priorities in the future, because if buying a new property is on the agenda, documenting all the possible profit is very important.
3. Use a whole of market adviseruse Principle Financial Services! Making sure you have an expert on hand, someone who deals with business owners all the time and has access to the entire mortgage market is paramount, not only to getting the best deal, but receiving the best advice.
Principle Financial Services provides whole of market mortgage advice regulated by the Financial Conduct Authority.
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Do You Need Help With Your Mortgage?
At Principle Financial Services we make it our mission to deliver a quality services that fits in with the way you run your business. - Please do not hestitate to get in touch with us to see how our services can help you with your mortgage enquires.
SHANE FOX
shanefox@principlefinancialservices.co.uk
01530 860190
The Springboard Business Centre, Mantle Lane, Coalville, Leicestershire, LE67 3DW
PLEASE NOTE THE FOLLOWING
This guide is for general information and is not intended to address your personal and financial requirements and should not be deemed or treated as constituting financial advice. Nor does this guide constitute tax or legal advice and should not be relied upon as such. Tax treatment of investments and legal advice depends on the individual circumstances of each client and may be subject to change in the future. For further guidance on the matters discussed in this guide please speak to Shane Fox, who is a regulated financial adviser. Your home is at risk if you fail to keep up payments on your mortgage or any other loans secured against it.
Principle Financial Services Ltd is an Appointed Representative of New Leaf Distribution Ltd. who are authorised and regulated by the Financial Conduct Authority. Number 460421.
SAMANTHA HAGON
samhagon@principlefinancialservices.co.uk
www.principlefinancialservices.co.uk info@principlefinancialservices.co.uk