As a limited company director, paid mainly through dividends, is it possible for me to get a mortgage?

Posted on 26 March 2008

I currently have a mortgage of £109,000. I've been paying it off for nearly a year. The mortgage is over 15 years (it has 14 left to run!). I've recently come of age at work. I'm the director of a limited company. My salary is £6,000 a year. But Each month I pay myself a dividend out of the company profits. Basically each month after paying my personal income tax, and Corporation Tax, I come out with an absolute minimum of £4,728 per month. My girlfriend comes out with £876. So basically we have £5,600 a month coming into the house. I plan to rent my existing house out for around £400 a month. So we will have £6000 per month coming in. Would I be able to take a mortgage on with my girlfriend and if so how much and what would be the best deal?

Hi Anthony,

Yes you should be able to get a mortgage, but most lenders would want to see two years worth of accounts.  You could possibly self-certify as your income is adequate but you would need a decent deposit; around 20% for an affordable deal.

As for the rate, we cannot recommend a lender without carrying out a financial review.  Please call on 0800 358 55 60 if you would like a Charcol broker (who is fees-free and whole-of-market) to establish your priorities and give you a few quotes.

Regards

 

Answers provided in response to Ask Bea are based on the information provided and do not constitute advice under the Financial Services & Markets Act. They reflect the personal views of the authors and do not neccessarily represent the views, positions, strategies or opinions of Charcol Limited. All comments are made in good faith, and neither Charcol Limited nor Bea will accept liability for them.

We recommend you seek professional advice with regard to any of these topics where appropriate.

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