A reader asks about using their company equity alongside their salary for a mortgage at age 55. This article explores mortgage options for company directors, including income assessment, age limits, and the role of mortgage brokers.
A reader wants to know if their equity in a company can be used alongside their salary when applying for a home loan. If you have a question for our experts, email us at \I am 55 years old and I am a director of my company, which I own 100 per cent of. I would like to know who are the most competitive lenders for company directors .
Can I use my role and the fact I own 100 per cent of my company, in addition to my salary, to help me get a \It’s encouraging to see you taking proactive steps towards securing a new home and seeking clarity about your mortgage options. As a company director and someone in your mid-50s, your circumstances are not unique, and there are plenty of options open to you. At 55, you’re well within the age range for most lenders. Many have no restrictions on your age at the time of application, although there are typically rules about the maximum age at which the mortgage must be repaid. High-street lenders often set their repayment cut-off at around 75 to 80 years old. However, building societies such as Penrith, Harpenden, and Hodge are known for their more flexible criteria, with some having no upper age limit at all. The key consideration here is affordability. Lenders will assess whether your income is sustainable throughout the mortgage term. If you’re planning to work well into your later years and remain actively involved in your company, this could bolster your application. Alternatively, if you’re planning retirement within the next 10 years, pension income can also be factored in. Some lenders allow applicants to combine working income with anticipated pension income, offering a degree of flexibility that aligns with your longer-term financial plans. The term of your mortgage will also be influenced by your intended retirement age. For example, if you plan to retire at 67, some lenders would consider a term that aligns with this timeline due to affordability and pension income typically being lower than working income. However, with many lenders, you could extend the term, provided you can demonstrate affordability through pension income or other assets. As a company director, your income structure may differ significantly from that of a salaried employee, but there are many competitive lenders who cater specifically to self-employed individuals. Your position as the 100 per cent owner of your catering business gives you several income avenues to present to lenders. Typically, they will assess your net profit as declared in your company accounts. Some lenders use net profit before tax, while others may assess net profit after corporation tax. This flexibility can work in your favour, depending on how your business is structured.Given your role, lenders may also view your income as stable, particularly if your business has a consistent track record of profitability. Your ability to continue generating income through management rather than physical labour as you age could further support your case. It’s worth noting that while mainstream lenders can provide generalised solutions, they may not always offer the tailored advice you need. This is where working with a mortgage broker can be invaluable. Brokers specialise in navigating the complexities of company director applications, ensuring that your unique circumstances are fully accounted for. They can also connect you with the right lenders who may not deal directly with the public, thus expanding your pool of options. At 55, securing a mortgage as a company director is entirely achievable with the right approach. By working with a knowledgeable mortgage broker, you can explore lenders that not only understand the intricacies of director income but also offer flexible age criteria. Whether you’re planning to leverage your current earnings or transition into pension income over time, there are solutions available to help you move forward confidently. Best of luck with your new chapter, and I hope you find a home that marks a fresh start. Don’t hesitate to seek tailored advice to ensure a smooth process and a mortgage that fits your needs perfectly
Mortgage Company Directors Equity Income Assessment Age Limits Retirement Mortgage Brokers
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