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Owning a limited company and securing a mortgage

One of the things that often concerns individuals when considering leaving permanent employment to go self-employed or set up a limited company is how it might affect their ability to secure a mortgage.

For those already on the property ladder it isn’t such an issue but for those considering buying their own home in the near future it is a factor to consider. The good news is that securing a mortgage is still possible. You just might have to jump through a few more hoops to get there!

Since the economic downturn it has been increasingly difficult for anyone to get a mortgage but small business owners and the self-employed have undoubtedly felt the impact of tighter lending guidelines.

Here’s our advice if you are looking for a mortgage

  • Be prepared. Keep all your accounts up-to-date. Make sure you accountant is chartered.
  • Check your credit rating and do what you can to ensure your credit score is good.
  • Think about what you can afford and be realistic about the monthly payments you can make. Factor in other costs associated with home ownership. If you are used to renting remember you’ll need to budget for repairs, maintenance, buildings insurance etc.
  • Look at smaller building societies if you find you are getting the cold shoulder from the big name banks. They may be more flexible and look at each application on a case by case basis.
  • Consider using a specialist mortgage broker. You might not want to pay an independent broker but in the long run a broker may save you a lot more than their fee. They also often have access to mortgage products that you won’t find on comparison sites. They will know which lenders are worth approaching on your behalf and could save you a lot of time as well as avoiding disappointment.
  • Save a healthy deposit if you can. The bigger your deposit the more options you will have as banks and building societies will see you as less of a risk.

It can be a frustrating process but it is worth remembering that the mortgage market is changing all the time. If you use our accountancy services and we can assist in anyway please just let us know.

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