Calling all Limited Company Business Owners looking for a mortgage for their dream home or an upcoming remortgage!
Do you value your time, your money and your stress levels?
Would like to know the top 5 mistakes we come across from 1000s of mortgage customers we speak to?
By avoiding these mistakes and listening to the tips, you will have more success when it comes to your mortgage.
***5 Mistakes that limited company business owners make when looking for a mortgage on their dream home***
- Liabilities outweighing assets
- Thinking a director’s loan is a form of income.
- Trying to get a mortgage without 12 Months accounts
- Living in your personal overdraft.
- Going directly to a bank or Lender
Click the video below to watch it or scroll down to read the blog:
I feel there are five mistakes, that limited company business owners make when looking for a mortgage for their dream home, or, their upcoming remortgage that I see on a regular basis. Today I want to help you prepare for your dream home by giving you 5 mistakes I want you to avoid.
Mistake 1:
So, number one, when I look at a set of company accounts, I’m looking at your balance sheet, and I need to see that your assets outweigh your liabilities; i.e., you own, or your company is worth more than what it owes. I see too many accounts where the liabilities outweigh the assets and, unfortunately, mortgage lenders do not like that because you could go bust tomorrow.
Mistake 2:
Number two is having a directors loan as your form of income. Now, I get it. I’m a company director, you want to put money into your business to grow it, to invest in it, to buy premises, to buy new assets, but, when you start drawing that money back out, you’re essentially drawing on a loan. And that is not a provable form of income for a mortgage lender. You need to have salary, dividends, or net profit after tax to calculate how much you could afford to borrow.
Mistake 3:
Mistake number three, trying to get a mortgage within 12 months of forming your limited company. Now, it could be possible with one or two lenders, however, my ethos is all about fitting the majority of lenders to get you the most suitable interest rate and to make it less stressful, we don’t want to make anything more stressful, but to make it less stressful, and to make it goes through with ease; the application, that is. So, if you wait until you have a full 12 months of limited company trading accounts, whether you’ve been employed before, whether you’ve been a sole trader before; having a full 12 months account, is going to set you up for more success and a greater number of lenders available to you.
Mistake 4:
Number four, again, I see all too often, but if you’re living in your overdraft, that is a mistake. Now, again, I get it. You’re a business owner, you keep the majority of your money, more than likely, in your bank account of your business. But what a mortgage lender looks at is very black and white. They’re not looking at your business, they’re looking at your personal bank statements, and if you’re living in your overdraft, their concern is that you can’t maintain your standard of living.So, by paying yourself that little bit extra for one month, clearing your overdraft and staying in the green, mortgage lenders are going to see, that your earnings, your income, and your income and your expenditure, is more sustainable, and you’ll have a better disposable income.
Mistake 5:
And mistake number five, in my opinion, is going directly to a bank. Because every single mortgage lender does a different set of criteria, and your personal circumstances, your business circumstances are completely different from the next person’s.So, what’s right for you is not going to be right for somebody else. And, with each lender having a different set of criteria, would you rather run up and down the high street? Or would you rather work with an advisor, or an experienced broker who understands self-employed mortgages, business owner mortgages, and can do all that for you; and make sure you get the most suitable interest rate, and make sure that you have way less pain and way less frustration, trying to arrange the mortgage, and deal with everybody involved yourself?
So, they’re the five mistakes that I see most commonly and have seen with all the clients that I’ve dealt with. My ethos is all about preparation. You’re a business owner, if you want to hit a million pound, in turn, over with a hundred or two hundred pounds’ worth of profit, you now have set a goal to achieve that.
If you know you want to move into your dream home, and if you know that you have an upcoming remortgage, then my recommendation is to reverse engineer the process. Sit down today, work out how much you’re going to need to borrow tomorrow, and then you have a target set to achieve within your business.
And if that’s something we can help you with, please do get in contact, or alternatively you can visit our website and download a copy of The Seven Mistakes that Business Owners and Entrepreneurs Make with Trying to Get a Mortgage or if you really want to set yourself up for success and plan for two, three years’ time, then you can dive on to Amazon and buy a copy of my book, The Self Employed Mortgage Guide.
We would love to help you and build a long-term relationship with you. So I look forward to seeing you again on another video.
Here is what to do next:
If you liked this blog we think you will love this Video we did on a real-life Active Mortgage Strategy Call!
OR
If you’re looking to go a step further, you can go and download your FREE copy of – 7 MISTAKES BUSINESS OWNERS AND ENTREPRENEURS MAKE THAT COULD JEOPARDISE YOUR MORTGAGE
OR
Give us a call on 01245 850165
