Self-Employed Mortgage Advice Liverpool
Along with many of the other stresses that are part and parcel of being self-employed, many people also worry about how much they can borrow and if they’ll qualify. Your business might be performing well, but, inevitably, you try and keep your tax liability as low as possible. This is because Accountants sometimes encourage putting expenses through as high as possible to keep profits low. The issue with this is that it causes a problem when it comes to borrowing money. Unfortunately, you can’t have it both ways! Here is our business owner, director and self-employed mortgage advice.
Self-Employed Mortgage Advice
Luckily, there are Lenders out there that will assess your income in several different ways. Some Lenders will lend more than others and our role is to find the one most suited to your requirements. For example, most Lenders average the last two years earnings, but we have access to others that only consider the latest year. This can be beneficial if you’ve seen an upturn in business over the last year.
Director Mortgage Advice
If you’re a Director of a Limited Company, then many lenders will average the last two years of salary, plus dividends. However, some lenders class you as employed unless you own a certain percentage of the company. In these circumstances, even if you are a Director, they might consider going off your payslips for the last 3 months.
Low Dividend Business Owner Mortgage Advice
As well as the above, some business owners run highly profitable organisations but only feel the need to take a low dividend. This type of applicant can be disadvantaged by the salary + dividend method. However, there are Lenders out there that will consider using the net profit of the Limited company to solve this problem.
If your business is due to complete a set of accounts, you can always contact us with the projected figures. We can then use that information to calculate what your maximum borrowing would be. Although, it is worth noting that the accounts would need to be finalised before a formal mortgage application.
In summary, calculating the maximum borrowing capacity for a self-employed applicant is a minefield – you could easily go to 10 different Lenders and get 10 different answers! In fact, would quite expect exactly that to happen. If you need to maximise your borrowing capability, I would urge you to use a Mortgage Broker.
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