Mortgages for LLPs

Mortgages for LLPs (Limited Liability Partnerships) have increased in popularity in recent years, both for investment purposes and for the purchase of residential property. While they are not impossible to obtain, successfully applying for a mortgage through an LLP can be a complex process that’s far less straightforward than applying for one as an individual in employment.
Because you’ll be applying for an LLP mortgage on a self-employed basis, regardless of whether it’s as an individual or with partners, you will be deemed as a riskier prospect than a standard borrower, because the process of proving income is more complex than having an employer who can simply verify your income. Lenders apply different criteria to mortgages for LLPs for a variety of reasons, so you might need specialist support.

What is are mortgages for LLPs?

Mortgages for LLPs don’t really exist. If you are applying for a mortgage through an LLP, you will still be applying for the same range as everybody else, but you’ll have to meet a different set of affordability criteria, which can vary from lender to lender. Borrowers employed on a PAYE basis are treated differently to those who are self-employed, such as partners in an LLP.
The length of your LLP’s trading history and how your income is assessed will have a big bearing on the amount you can borrow, and the rate you can borrow it at.

Lenders look at all the mortgage applications they receive based on risk, and most tend to view self-employed and company directors as riskier prospects than those in standard employment, even if they have a proven and successful trading history.
If you are applying for a mortgage for LLPs, most lenders will take your net profit share, or your share of the LLP’s total received income, into account when assessing your affordability.

Most lenders generally lend between three and five times your annual income if you are borrowing through an LLP. However, different lenders have different rules, so working with an expert mortgage broker with experience in arranging mortgages for LLPs will ensure you get the right advice to help you get ready prior to submitting your application.

How do mortgages for LLPs work?

Applying for a mortgage as a partner within an LLP is a relatively straightforward process. The trick is finding the right lender and preparing your application correctly. While you’ll still have access to the same lenders and mortgage products as everyone else, you’ll just need to prove your income in a different way. You may also need to provide more detailed information about the LLP and the way it has been set up, including the nature of the LLP, the length of time it has been trading for, who the key people are, your declared profit/income, any debts of the applicant/LLP (or total income received) and any outstanding debt.

The range of mortgages available to you may start to narrow depending upon how complex the circumstances and nature of your LLP are. In these situations, you might need a bit of specialist support to find the right mortgage and that’s where My Mortgage Pro can help.

We can connect you with an expert mortgage broker who specialises in mortgages for LLPs and can ensure you get the right advice to help you get ready prior to submitting your application.

Can I get a mortgage for LLPs?

In short, yes… if you know where to look and how to prepare your application properly. In fact, with the right help, you will be able to get access to the best interest rates and deals on the market. It all depends on your circumstances. It is possible to get a mortgage as the director or partner within an LLP, provided you can demonstrate to the lender that you can afford the repayments and can manage your finances sensibly.

This means proving you’ve got a steady income, but also doing things like making sure you’ve met any other outstanding credit or loan payments on time, ensuring all of your regular outgoings – such as utility bills and credit cards – are paid on time, and not taking on any new debt.

Also, the more money you have for a deposit, the better, as this will help to bring down the total amount you need to borrow and might even help you to get a better mortgage interest rate.

Contact us for more information about mortgages for LLPs

My Mortgage Pro is a professional mortgage information service. While we don’t give advice, we aim to provide you with simple, jargon-free, no-nonsense information about mortgages for LLPs to help you make the right choice. We can also connect you with a specially selected panel of leading mortgage advisers, who are authorised and regulated by the Financial Conduct Authority, who will provide advice tailored to your specific circumstances and help you find the right mortgage, fast.

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