Mortgages for Business Owners

For owners of SME’s and the self employed, mortgages have become challenging since the removal of Self Cert. And this is where a professional mortgage broker can really make the difference for those with complicated or multiple revenue streams. By understanding the structure of your income and translating this in the best possible light to the lenders, the team at Harvey Bowes have consistently delivered expert mortgage advice and excellent mortgage products to those who are self employed, business owners or who have income partly or fully derived from bonus or commission. This does not mean that one can borrow more than they can prove is affordable. What it does mean is that we understand multiple revenue streams and business accounts.

The interpretation of acceptable income varies from lender to lender. It is therefore equally important to understand the lender criteria as well as understanding the applicant and how income is derived. There is also access to specialist underwriters within lenders for loans of a certain size. With some lenders this is as low as £300,000 mortgage and for others it may be £500,000 or more. However, this means that your application can be presented professionally and properly by Harvey Bowes and then considered by an underwriter with the correct understanding rather than the stereotypical ‘computer says no’ scenario.

For owners of a limited company, there may be further skills needed to find the right lender, as some consider retained profit within the limited company and others ignore it. Our statistics show a tendency for business owners to prefer interest only mortgages, keeping costs low now and using either the sale of the business or business assets as a potential repayment of the mortgage at the end of th term. In recent times, this has become more difficult, but again, at Harvey Bowes we are fully conversant with the criteria of the lenders and make the appropriate recommendations.

It costs nothing to talk to Harvey Bowes and get sound mortgage advice. Contact us today: 02921754150.

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Make an Enquiry:

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Have you been asked to obtain an SA302 form from HMRC for a mortgage application?

More and more lenders are asking to see the SA302 forms. within the blog section of this website, we give more information on how to handle this request. Please take a look, click here for more information.

What will you need to support your mortgage application

In the new era since the credit crunch, be wary of any mortgage broker promising to deliver the world with little paperwork. Especially if you want your mortgage to go through properly and swiftly. It is always best to make everything available to your mortgage broker and let them make the decision on what is best to present to the lender. At Harvey Bowes, we will normally want to talk to your accountant, this will save you time on gathering paperwork as we can get much of it from them; and if you are limited company we will be able access your abbreviated accounts from Companies House which helps to confirm the figures and by cross referencing this way we can place your mortgage application with the relevant lender with confidence. The lender may also ask for your SA302 tax return as we have mentioned. It takes a little time to gather the required documents, but this undoubtedly saves time during the application the process.

Frankly, you may choose not to use Harvey Bowes for your mortgage. That’s fine, not everyone will. But if you have read this page and have a mortgage broker promising to deliver a loan with little or no paperwork, please remember what you have read. It is far better in this market to get it right first time and that means getting the full picture. For example, if the figures placed on the application do not match perfectly with the income proof you can supply, the lender is likely to ask even more questions and therefore cause even more delays. Far better to talk to a mortgage broker who gets it right first time. Someone used to dealing with the business community, talk to Harvey Bowes today and get professional advice. Contact us on 02921754150.

Think carefully before securing other debts against your home.

Your home may be repossessed if you do not keep up repayments on your mortgage

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Some Self Employed Mortgage Question and Answers:

Q: I only have one years’ accounts – how long do I have to wait before I can apply for a mortgage?

A: If you have one years’ accounts submitted with HMRC, then there are high street and boutique lenders that will lend to you based on that one years’ income.

Q: I have been self employed for a few years, but my net profits are quite low due to the economy, how with this effect my borrowing capacity?

A: Not all lenders base the amount your can borrow on an average of the 3 year income. There are both high street and boutique lenders who will lend based on the latest year net profit only provided there is an upward trend of income. Therefore, if you are showing a steady increase over the past 3 years, your borrowing is based on what you can afford to repay using the latest years’ figure only.

Q: What do I need to provide as paperwork for a mortgage application?

A: Be thorough, have ready your SA032 tax returns (search this site for an article about what they are and how to get them), at least the last 3 months bank statements, your trading accounts approved by a qualified accountant or along with the full self assessment tax return. This way we can give you the right advice based on having all of the facts to do so.

Q: How much can I borrow against income?

A: Lenders approach borrowing limits differently to the old system of an income multiple. The affordability is dependant on your credit score, how many other financial commitments you have and other factors that are considered before calculating the amount of funds you have available each month to budget for repaying the monthly mortgage payment. Since this is more detailed than the traditional assessment, Harvey Bowes can give an indication of the amount of borrowing once a full assessment has been done. You can contact us to discuss the options on 029 2115 6918.

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