It’s no secret that it can be harder for company directors to get a mortgage. They’re seen as a higher risk by lenders, because their income is not always as stable as someone who is employed, which makes it difficult for lenders to accurately assess how much they can afford to borrow each month.
So, if you’re a company director looking for a mortgage, what can you do to improve your chances of being accepted?
There are a number of things that you can do to improve your chances of getting a mortgage as a company director – read on to find out more!
Get Your Finances in Order
The first thing you should do is make sure that you have all of your financial documentation in order. This includes tax returns, financial statements and proof of income from your company. Lenders will want to see all of this before making a decision on your application.
It’s also important to remember that lenders assess mortgages for company directors slightly differently to other types of applications. They’re more interested in your ability to repay the loan over the long term, rather than your current financial situation – emphasising the importance of having a good credit history when applying for a mortgage as a company director.
Get Help from a Specialist Mortgage Broker
If you’re struggling to get a mortgage as a company director, one option is to seek help from a specialist mortgage broker. They’ll be able to assess your financial situation and provide you with tailored advice on which lenders are most likely to accept your application.
A specialist mortgage broker will also be able to negotiate with lenders on your behalf and find the best mortgage deal for your individual circumstances. This can save you a lot of time and stress during the mortgage application process.
Save up a Large Deposit
The larger your deposit, the lower the amount you will need to borrow, and the less risky you will appear to lenders. While it may take longer to save up a larger deposit, it will be worth it in the long run when you are able to secure a mortgage with more favourable terms.
Close Old and Inactive Accounts
If you have any old or inactive accounts, closing them before applying for a mortgage is a good idea. Lenders will take into account the amount of available credit you have when assessing your application, and having too much available credit can make you appear to be a higher risk.
Improve Your Credit Score
One of the best things you can do to improve your chances of getting a mortgage as a company director is to work on improving your credit score. This will show lenders that you’re a responsible borrower and make it more likely that they’ll accept your application.
There are a number of things you can do to improve your credit score, such as paying your bills on time, maintaining a good credit history, and keeping your debt-to-income ratio low.
Consider Alternative Lenders
If you’ve been turned down by traditional lenders, don’t worry – there are still other options available to you. There are a number of alternative lenders who specialize in providing mortgages to company directors and other self-employed individuals.
These lenders may be willing to accept a higher risk, which could increase your chances of being accepted for a mortgage.
Final Thoughts
Applying for a mortgage as a company director can be a challenge, but there are a number of things you can do to improve your chances of being accepted. Remember to get your finances in order, seek help from a specialist mortgage broker and save up a large deposit. You should also work on improving your credit score and consider alternative lenders if you’ve been turned down by high street banks. By following these tips, you’ll be in a much better position to secure the mortgage you need.
