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The key point to consider regarding mortgages for company directors, or for anyone who is both an Employee and Director of the company that they work for, is whether your individual shareholding is 25% or greater. If it is below 25% then for the majority of lenders you will be assessed purely as an employee of the firm using your payslips as proof of income.  If your share holding is 25% or greater then most lenders will treat you as Self-Employed, in which case the following applies:

If you are the Director of your own Limited Company then your income will be treated as one of the following figures:

  • Salary plus Dividends
  • Salary plus share of Net Profit

There are also lenders that will consider using Salary plus Net Profit before Corporation Tax in some circumstances.

By lending against the Net Profit figure, we are able to factor in any retained profit that you may have diligently kept within the business as working capital and ultimately achieve a higher mortgage amount than the traditional Salary plus Dividend figure would generate. Although most lenders would like to average profits across 2 years, again, it may be possible to obtain the mortgage you need with only 1 full year of accounts.

Speak to one of our advisers about how your specific situation will be assessed.

The key point to consider regarding mortgages for company directors, or for anyone who is both an Employee and Director of the company that they work for, is whether your individual shareholding is 25% or greater. If it is below 25% then for the majority of lenders you will be assessed purely as an employee of the firm using your payslips as proof of income.  If your share holding is 25% or greater then most lenders will treat you as Self-Employed, in which case the following applies.

For more information on mortgages for company Directors, get in touch.

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