Comprehensive Guide to LLP Mortgages
Your property may be repossessed if you do not keep up repayments on your mortgage.
How Are LLP Mortgages Assessed and What Documents Are Needed?
Lenders assess LLP mortgage applications by evaluating the partnership’s financial health, income generation, and credit history, along with the personal credit histories of the LLP partners. Additional factors such as the type and value of the property and any associated business plans are also considered. For LLPs, mortgage affordability may require a higher deposit compared to standard residential mortgages. This is influenced by various factors, including income proof, the nature of the property, and, for investment properties, the expected return on investment. The process is comprehensive, ensuring both the LLP and its partners demonstrate financial stability.
FAQ'S
What is a limited liability partnership? Can you get a mortgage with an LLP?
An LLP is basically a type of limited company. It’s a self-employed business with directors. The difference between an LLP and a normal limited company, without going into too much detail, is about how the company is made up and the directors’ responsibilities. You can get a mortgage in an LLP and as a director of an LLP.
There are three different ways to set up a business – as a sole trader, which is typically one-man bands; as a limited company, which is probably the most popular, and as a Limited Liability Partnership.
Each individual type can get a mortgage in a very similar way. It’s just how the companies are set up that’s different.
Can a newly established LLP apply for a mortgage? Can I get a mortgage if I’ve only been in an LLP for a year?
Standard self-employed criteria would apply. You would still have to prove your income, whether you’re applying as a director or in the name of the company.
The company would have to prove that there’s sufficient income within the business to fund the mortgage. If it was in the name of the director, they would have to prove their income with self-assessment. Generally we would need a minimum of 12 months’ trading.
Some lenders don’t set a minimum time for the LLP to have been established. But if it’s a new business that’s just been set up, having a history of doing a similar job in an employed role would help towards getting a mortgage.
Vulnerable Customer
We understand that from time to time our clients may find themselves dealing with circumstances which could mean they are potentially vulnerable. For example, a change in health, caring for a family member or coping with the loss of a loved one. There are many different types of vulnerability, and what makes one person vulnerable might not affect someone else. When we are vulnerable, our need for financial advice may change. However, admitting vulnerability or seeking help can sometimes feel hard.
If this is something you would like to discuss with us, please ask for a copy of our support guide or download a copy here. This guide is designed to help explain vulnerability and the ways in which we might be able to support you. If you feel any of the circumstances in the brochure apply to you, please talk to us.
