Mortgage as a company director - apply as employed or as a director?

travelmonkey

Hello folks. First time buyer here. I set up my own ltd company in April and have been listed director since then. My question is: when applying for a mortgage, do I apply as employed and present my payslips etc or do I attempt to get a directors mortgage? I am hoping find a place within the next 12 months so would the director route stop me achiving that? Thanks.   

[Deleted User]

You apply based on lenders criteria. Usually if you have over a 20% shareholding then you will be assessed as self employed and will show payslip, and tax calculations to prove any dividends.

It can get complex with using retained profit as income even if you haven't drawn it and then you will show full company accounts to prove income

MalMonroe

Well, you're self-employed, not employed.  So that's how you'd apply. 

Some information here :   https://www.money.co.uk/mortgages/can-i-get-a-mortgage-if-im-self-employed.htm

Cscott139

If you only set up in April this year you are going to struggle. Most lenders will require a min of 2 years accounts.

ACG

You will have options once your business has been up and running for 12 months. You would apply as a director if you own over 20-25% of the business.

travelmonkey

ACG said:

You will have options once your business has been up and running for 12 months. You would apply as a director if you own over 20-25% of the business.

Thanks. It would be me and my partner who are equally split at 50% each for now. It looks like the best advice is to focus hard on creating a solid profit for now and look into the options after next April. 

dunstonh

My question is: when applying for a mortgage, do I apply as employed and present my payslips etc or do I attempt to get a directors mortgage?

You are not self-employed but employed as far as everything is concerned apart from mortgages.   Mortgages treat you as a variation of self employed.   They look at salary, dividends and retained profits (the latter being very useful)

BraveJan

I had the same question and I already found all the necessary answers. Thank you for your answers!

Joeisaware539

travelmonkey said:

Hello folks. First time buyer here. I set up my own ltd company in April and have been listed director since then. My question is: when applying for a mortgage, do I apply as employed and present my payslips etc or do I attempt to get a directors mortgage? I am hoping find a place within the next 12 months so would the director route stop me achiving that? Thanks.   

I had a friend of mine: He transferred all the shares to his mother put himself on PAYE for a year; submitted payslips and got a mortgage as employed. 7 months after transfers back to himself. 

He even told the mortgage advisor what he was doing and she kept referring to him as a manager not a Director, the mortgage adviser was well aware and also the underwriter in the branch. 

He has since paid the mortgage off in full. That’s how he did it. 

He is extremely intelligent so I don’t know if that helped him. 

It could of been good timing. The mortgage adviser was the under writer in branch and turned a blind eye no idea... really. 

[Deleted User]

Joeisaware539 said:

travelmonkey said:

Hello folks. First time buyer here. I set up my own ltd company in April and have been listed director since then. My question is: when applying for a mortgage, do I apply as employed and present my payslips etc or do I attempt to get a directors mortgage? I am hoping find a place within the next 12 months so would the director route stop me achiving that? Thanks.   

I had a friend of mine: He transferred all the shares to his mother put himself on PAYE for a year; submitted payslips and got a mortgage as employed. 7 months after transfers back to himself. 

He even told the mortgage advisor what he was doing and she kept referring to him as a manager not a Director, the mortgage adviser was well aware and also the underwriter in the branch. 

He has since paid the mortgage off in full. That’s how he did it. 

He is extremely intelligent so I don’t know if that helped him. 

It could of been good timing. The mortgage adviser was the under writer in branch and turned a blind eye no idea... really. 

dont do this.  This is mortgage fraud.  

Joeisaware539

Deleted_User said:

Joeisaware539 said:

travelmonkey said:

Hello folks. First time buyer here. I set up my own ltd company in April and have been listed director since then. My question is: when applying for a mortgage, do I apply as employed and present my payslips etc or do I attempt to get a directors mortgage? I am hoping find a place within the next 12 months so would the director route stop me achiving that? Thanks.   

I had a friend of mine: He transferred all the shares to his mother put himself on PAYE for a year; submitted payslips and got a mortgage as employed. 7 months after transfers back to himself. 

He even told the mortgage advisor what he was doing and she kept referring to him as a manager not a Director, the mortgage adviser was well aware and also the underwriter in the branch. 

He has since paid the mortgage off in full. That’s how he did it. 

He is extremely intelligent so I don’t know if that helped him. 

It could of been good timing. The mortgage adviser was the under writer in branch and turned a blind eye no idea... really. 

dont do this.  This is mortgage fraud.  

How can it be fraud, when he advised the mortgage adviser in branch who approved it?

It worked for him and now he’s on the ladder not complicated self employed hurdles that are put in place. The bank who approved it he told me he banked with them already so don’t know if this helped.