Mortgage impact of going Ltd company

iamparakeet

I have been a Self-Employed sole trader since 1997.
In mid 2013, I bought my first property, currently on a five-year fixed mortgage. The approval process involved the lender requesting copies of my SA302 tax figures as well as my personal bank statements.

I am now considering transitioning my activities to form a Ltd company, partly for tax efficiency reasons.

I aim to move house within the next two to five years.

So, before I go Ltd, I am curious to know if doing so will have any negative or complicating effect on my wish to secure another mortgage, either for that next property or after the expiration of my five-year fix.

I will still be able to show a lender all the documentation from my current Sole-Trader status. And, as I understand it, I will still need to file a Personal Tax return (ie. a Self Assessment), just as I currently do.

So, is there anything I should bear in mind in starting up a business if I aim to get a mortgage in the next couple of years?

If there would be any negative consequence, it may be a deal-breaker for the option.

Thank-you.

amnblog

You are right to be cautious - some Lender have a ridiculous attitude to this type of scenario and would consider you as starting self employed again.

You should be fine with the right lender is you are still trading in the same type of business and this change is just to assist the business or taxation position.

I have a general rule with clients not to make business decisions based on the possibility of a future mortgage. Do what is right for the business.