A self-employed company director moving home in Haverhill

Clients: A limited company director and her partner · Branch: Haverhill · Need: A company director mortgage to move to a larger family home

The challenge

Lucy (name changed) runs a small electrical contracting company and, on her accountant’s advice, pays herself a modest salary plus dividends. Most of the profit stays in the business. She and her partner Ben wanted to move to a four-bedroom house in Haverhill for £425,000, using £140,000 of equity from their sale.

They needed to borrow £285,000. Their current lender only counted the salary and dividends Lucy actually drew, which capped them at about £230,000, around £55,000 short.

What we did

• We gathered two years of certified accounts, her SA302s and tax year overviews, and a letter from her accountant confirming the profit retained in the company.
• Our adviser approached lenders that assess company directors on salary plus their share of the company’s net profit, not just the income they take out.
• Porting her existing mortgage would have meant the same low income figure, so we weighed a new lender against the £3,200 early repayment charge for leaving. The new lender still came out ahead over the five-year fixed rate.
• We packaged the application with a clear summary of the business, so the underwriter could see its trading history and steady profits at a glance.

The outcome

Lucy and Ben had an agreement in principle within 48 hours and a full offer for £285,000, at 67% loan to value, two weeks later. Their sale chain stayed on track, and Lucy didn’t have to change how she pays herself to get her company director mortgage.

Self-employed or a company director? See how our self-employed advisers can help.