How Limited Company Directors Can Get The Mortgage They Need
If you’re a limited company director, you may believe that increasing your dividends is the only way to secure a bigger mortgage. But this is a common misconception – and one that could cost you unnecessary personal tax. The good news? There’s a smarter way to secure the mortgage you need.
Why You Don’t Necessarily Need to Increase Dividends
Many business owners assume they must take large dividends from their company to boost their personal income on paper. While this might increase affordability with some lenders, it also comes with a tax liability. Dividends are subject to tax – and in many cases, this approach is completely avoidable.
How to Get a Mortgage Using Net Profits
Instead of using dividends for affordability, some lenders will assess your company’s net profit. This means you can access mortgage borrowing without having to take the profit out of the business as dividends that may increase your personal tax bill.
Choosing the Right Lender Matters
Not all mortgage lenders assess income in the same way. While some lenders may focus on salary and dividends, certain lenders cater specifically to limited company directors. These lenders take a more flexible approach, considering your net profit or retained earnings alongside your salary.
Speak to a Mortgage Expert
Navigating the mortgage market as a limited company director can be complex, but the right guidance makes all the difference. If you want to secure a mortgage without the stress then book a call today.
You should seek professional tax advice before applying for a mortgage.
There may be a fee for mortgage advice. The precise amount will depend upon your circumstances, but we estimate it will be £499.