Mortgages
Mortgages for limited company directors
Income for mortgage purposes for Limited Company Directors is defined in one of two ways.
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Income for mortgage purposes for Limited Company Directors is defined in one of two ways.
The majority of lenders (80%) use directors’ salary plus dividends to calculate income for a Limited Company Director, usually averaged over the latest two financial years.
The minority of lenders (20%) use directors’ salary plus share of net profit to calculate income, again typically averaged over the last 2 years accounts.
The latter income definition can sometimes result in a higher income figure, and hence you may be able to borrow more on that basis.
Lender’s definition of ‘net profit’ can vary, some exclude corporation tax being paid, but the more common definition is net profit after corporation tax has been paid.
Your home may be repossessed if you do not keep up repayments on your mortgage
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