Entrepreneur Mortgages

If you run your own business and want to get on the property ladder, this mortgage could be for you

Working for yourself can mean that your income varies. If you can’t show a regular income, it could be difficult to get a mortgage with most traditional lenders and getting a better deal on an existing mortgage could be tricky too.

We understand that being self-employed puts you in a unique position. You might want to focus on growing your business in its early years and choose not to take a large salary.

 

We look at the bigger picture

 

Whether you’re a sole trader, director of a limited company, working in a partnership, or even a professional within an established practice, we’ll look at the retained profit and net profit performance of your business – not just your salary and dividends.

Flexible underwriting means we’ll assess all types of self-employment and we’ll work with you and your accountant to fully understand the business.

Why choose an Entrepreneur Mortgage?

  • Our mortgage specialists will consider your business’s performance and potential, not just your personal income
  • Our flexible underwriting means we look at each mortgage on an individual basis rather than automated credit scoring
  • We’ll consider other income you might have when we look at affordability and your ability to pay a mortgage on the home you want
  • We don’t make our decision to lend based solely on your salary or dividends

2021 Building Society of the Year at the Scottish Mortgage Awards 

 

Here's what you need to know

An Entrepreneur Mortgage is suitable for: sole traders; company directors; trading in a partnership; self-employed contractors with their own limited company; and self-employed professionals (e.g. solicitors, GPs, medical doctors, accountants) in their first year of self-employment within an established partnership or practice.

Minimum loan to value is 80% up to a maximum of 90% (95% if you meet our Professional criteria).

Loans from £30,000 up to £1,000,000 

Minimum mortgage term is 5 years and maximum term is 40 years

To apply you need to be at least 18 years old and normally not more than 85 at end of mortgage term.

 

Why choose an Entrepreneur Mortgage?

  • Our mortgage specialists will consider your business’s performance and potential, not just your personal income
  • Our flexible underwriting means we look at each mortgage on an individual basis rather than automated credit scoring
  • We’ll consider other income you might have when we look at affordability and your ability to pay a mortgage on the home you want
  • We don’t make our decision to lend based solely on your salary or dividends

2021 Building Society of the Year at the Scottish Mortgage Awards 

 

Here's what you need to know

An Entrepreneur Mortgage is suitable for: sole traders; company directors; trading in a partnership; self-employed contractors with their own limited company; and self-employed professionals (e.g. solicitors, GPs, medical doctors, accountants) in their first year of self-employment within an established partnership or practice.

Minimum loan to value is 80% up to a maximum of 90% (95% if you meet our Professional criteria).

Loans from £30,000 up to £1,000,000 

Minimum mortgage term is 5 years and maximum term is 40 years

To apply you need to be at least 18 years old and normally not more than 85 at end of mortgage term.

 

Why choose an Entrepreneur Mortgage?

  • Our mortgage specialists will consider your business’s performance and potential, not just your personal income
  • Our flexible underwriting means we look at each mortgage on an individual basis rather than automated credit scoring
  • We’ll consider other income you might have when we look at affordability and your ability to pay a mortgage on the home you want
  • We don’t make our decision to lend based solely on your salary or dividends

2021 Building Society of the Year at the Scottish Mortgage Awards 

 

Here's what you need to know

An Entrepreneur Mortgage is suitable for: sole traders; company directors; trading in a partnership; self-employed contractors with their own limited company; and self-employed professionals (e.g. solicitors, GPs, medical doctors, accountants) in their first year of self-employment within an established partnership or practice.

Minimum loan to value is 80% up to a maximum of 90% (95% if you meet our Professional criteria).

Loans from £30,000 up to £1,000,000 

Minimum mortgage term is 5 years and maximum term is 40 years

To apply you need to be at least 18 years old and normally not more than 85 at end of mortgage term.

 

Income requirements for mortgages more than 80% loan to value

For sole traders or partners:

  • We’ll consider the average share of the last 3 years’ net trading profit.
  • Where there is only a 2-year track record, we may also take into account an estimate or projection for the coming year, as long as:
  1. Annual turnover is level, or progressively rising.
  2. Net profit (and share of net profit) is level or progressively rising.
  3. Income drawn from the business does not exceed the share of net profit in any accounting period.

For directors of a limited company:

  • We’ll consider the average salary/dividend for the last 3 years and any retained profit.
  • Where the company has only a 2-year track record, we may also take into account an estimate or projection for the coming year, as long as:
  1. Annual turnover is level, or progressively rising.
  2. Net profit is level or progressively rising.
  3. Salary plus gross dividends are level or progressively rising.

Income requirements for mortgages of 80% or less loan to value

For sole traders, partners and company directors:

  • Our underwriting team will assess the sustainable income, with reference to at least one year of financial history (supported by either final accounts, or an accountant’s certificate) and a projection for the coming year.
  • The type of business and number of shareholders can influence any mortgage decisions.

 

Property

Residential mortgages are available for owner occupied residential properties. All mortgages are subject to a suitable property valuation.

For property purchases in Scotland, we can normally use the property valuation contained in the sellers' Home Report provided that it’s no more than 3 months old (please speak with our mortgage advisers for further details).

Maximum Loan and Loan to Value

For loans up to £300,000 you can borrow up to 90% of the property valuation or purchase price (whichever is lower).

For loans up to £450,000 you can borrow up to 80% of the property valuation or purchase price (whichever is lower).We’ll lend up to 95% LTV if you meet our Professional Criteria.

For loans up to £750,000 you can borrow up to 70% of the property valuation or purchase price (whichever is lower).

For loans up to £1,000,000 you can borrow up to 60% of the property valuation or purchase price (whichever is lower).

Maximum loan size is £1,000,000.

How much can I borrow?

All mortgage applications are based on affordability.

  • For loans less than 80% of the property valuation or purchase price (whichever is lower) we’ll lend up to:
    Single applicant: 4.5 x income
    Joint applicants: Main income x 4.5 plus second income x 1 OR Joint income x 4

  • For loans over 80% of the property valuation or purchase price (whichever is lower) we’ll lend up to:
    Single applicant: 4 x income
    Joint applicants: Main income x 4 plus second income x 1 OR Joint income x 3.75

Our flexible underwriting means we assess all applications on an individual basis. The amount we’ll lend will depend on your circumstances. Any existing financial commitments will be taken into consideration when calculating affordability.

Interest Rate Options

We offer a range of competitive interest rates to choose from. Call us on 0333 207 4007 for details. Our lines are open 9-5 Mon to Fri (10-5 Wed). Calls may be recorded and/or monitored.

 

Repayment Options

  • Capital and Interest
  • Interest only - available up to 75% of the property value or purchase price (whichever is lower) with a maximum loan size of £350,000. When you apply, we’ll need confirmation that you have plans in place to pay off your mortgage at the end of the term and we’ll ask you about your plans occasionally while you have a mortgage with us. Examples of these plans are normally endowment policies; stocks and shares ISAs; pension lump sums; and second/investment properties
Security

A Standard Security (Scotland) / First Legal Charge (England) will be taken over the property being purchased as security for the mortgage borrowing.

Early Repayment Charges

If you make overpayments of 10% or more of the loan amount in any 12 month rolling period during the initial period, and depending on which mortgage you have, the charges apply as follows:

  • For our 3-year mortgage, you will need to pay a charge equivalent to 3% of the outstanding balance amount in year 1 and 2 and 2% in year 3.
  • For our 5-year mortgage, the early repayment charge will be:

o            5% of the outstanding balance in the 1st year

o            4% of the outstanding balance in the 2nd year

o            3% of the outstanding balance in years 3 & 4

o            2% of the outstanding balance in year 5

After the initial period, the Society will not make an early repayment charge if you move to Standard Variable Rate and choose to repay the mortgage. However, there will be certain redemption fees that will need to be paid (see our Details of Charges leaflet for more information).

Insurance

You’ll need to provide evidence that buildings insurance for the property is in place before we can release funds.

 

What happens if I want to move house?

If you move home and want to transfer this mortgage to a new property, you can do this if the application satisfies the normal lending criteria of Scottish Building Society.

 

What you’ll need for your application

We’ll allocate a qualified mortgage adviser to take you through the whole process. They’ll be able to advise which product best suits your requirements by the information you give them. You can have a face-to-face or telephone meeting/appointment – whatever works best for you.

We’ll need proof of ID - this can include a passport or a driving licence.

We’ll need proof of income – please refer to the top of the page for full details

We’ll also need information about the property you want to buy, including valuation details or Home Report, and how much your deposit will be.

We’ll need your consent to check your personal financial data to help us assess your mortgage application so we can complete it as efficiently as possible.

 

What happens after I’ve applied for a mortgage?

The next step is for us to make you a mortgage offer. Before we can do this, we’ll need a valuation of the property you want to buy. Most homes for sale need the seller to produce a Home Report, which is given to prospective buyers. This contains a survey report featuring information on the condition and valuation of the property. If there’s no Home Report, we’ll instruct an approved valuer to carry out a Lender’s Valuation. We’ll need to charge for this.

Conclusion of Missives and settlement is the final stage. This means that the buyer and seller are both committed to the sale. Your solicitor will keep in touch with you throughout the whole process.
Your solicitor will request the mortgage funds from us before transferring to the seller’s solicitor. When the solicitor has paid the agreed price and has received the required legal documents, it’s all done and you can move in to your new home.

YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE