Trusted advisors for mortgages with decreasing profits.

Self-employed mortgages with decreasing profits

Your home may be repossessed if you do not keep up repayments on your mortgage. When The Bank Says No is a mortgage broker, and not a lender.

Don’t let reducing profits reduce your optimism for the future. Our team of expert advisors are here to show you the way to the right mortgage deal.

Your home may be repossessed if you do not keep up repayments on your mortgage. When The Bank Says No is a mortgage broker, and not a lender.

Finding The Best Mortgage With Decreasing Profits Deal For Your Circumstances

If your business has made a loss over the last 2 years, it can be harder to find a mortgage. Any significant fluctuations may cause some high street lenders to question the sustainability of your income – even if it’s a one-off cost due to an office refurbishment or the impact of the COVID-19 pandemic. The good news is that not all lenders think in the same way, and our team of specialist mortgage advisors are here to help you find a mortgage against the odds. With our help, a suitable self-employed mortgage deal is just around the corner!

If my business has decreasing profits, will I be able to get a mortgage?

Yes. If your business has decreasing profits, it will be more difficult to get a mortgage and the number of mortgage deals available to you will decrease. However, there are options open to you which we can help you find and apply for with the best chances of success. Our team of expert advisors have helped self employed people in a range of sectors achieve the property of their dreams. Whatever the circumstances of your business losses, our friendly advisors are here to help you work out the best way forwards – just get in touch!

Am I eligible for a net profit mortgage?

Net profit mortgages enable self employed people to prove their income through declaring their business’ net profits. If you have your own business and generate an income that is split into expenses and profits, a net profit mortgage should be available to you. This applies to businesses run as a sole trader, partnership or limited company.

Lenders take a few different approaches for this kind of mortgage; some consider profit before tax, and others will consider profit after tax. The only drawback to net profit mortgages is that they may not demonstrate all that you can afford, and if they demonstrate decreasing profits, lenders may begin to seriously question your affordability. If you’re not sure about the best approach for your net profit mortgage, our team of advisors are here to explain everything you need to know.

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What are the requirements for getting a net profit mortgage?

Your eligibility for a net profit mortgage will depend on your credit score and other financial information, personal details like age, the length of time you’ve been self employed and the size of your deposit. As with any kind of mortgage, you stand a much better chance of being accepted if you can demonstrate your lack of risk and responsibility with money.

A lender will typically look at your average profits over the past couple of years, which may put you in a better position if your decreasing profits are only a momentary blip. For guidance bespoke to your company’s financial situation, don’t hesitate to give our team a call!

Are there any differences for sole traders and company directors when applying for a mortgage?

If you are a sole trader, a lender will consider if there are any changes to your profit levels year on year. If your profits are up from the previous year, they may use this figure in their calculations. However, if your profits have gone down, the profit average will be lowered and this may change how much the lender is willing to offer. If profits declined by a significant amount such as 20%, some lenders may not be willing to lend at all. Other lenders may consider your recent accoutns rather than fluctuations in profits.

If you are a company director, lenders will tend to look at what you withdraw as your salary and dividends. Some lenders will consider adding a share of the net profits to this, meaning you can borrow more than that determined by salary and dividends.

Self-employed mortgages with decreasing profits FAQs.

The size of deposit you require will vary depending on your circumstances and the level of risk the lender will accept. If you have a good credit score and have been trading as self-employed for a number of years, you should be able to use a lower deposit as you can provide you have a stable income. Though being self-employed doesn’t mean you can’t access a 5% deposit mortgage, the higher the deposit, the less risk you pose and the greater your chances of approval. If you can put down a 15% deposit for example, it is likely you will have access to better mortgage rates than those who can only put down 5%.

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Professional advice on self employed decreasing profit mortgages.

When the Bank Says No specialises in helping self employed clients achieve the right mortgage for them. We work across the whole market, helping people in a variety of situations access lenders who understand and accept their circumstances. Whether you’re facing a momentary blip or have seen decreasing profits over a sustained period, our advisors are here to guide you towards the best next steps.

Don’t lose hope.

If your business has been operating at a loss, you may be concerned that your future property owning plans are now out of the question. The world of mortgages can seem scary, particularly if you’re self employed. That’s why our expert mortgage advisors are here to help take the strain of the application process. Whatever your circumstances and whatever your business is going through, the right mortgage deal is still within your reach.

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