Getting a Mortgage in a Limited Liability Partnership (LLP)
Explore LLP mortgages with confidence. Find out everything you need to know and how a broker can help you
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If you’re in a limited liability partnership (LLP), you might be wondering how you can secure a mortgage. Luckily there are plenty of options available, but because your employment is slightly different from the norm there’s still a lot to think about.
This guide will take you through everything you need to know about mortgages for LLP borrowers, from how they work to what criteria you’ll need to meet and more.
Can you get a mortgage in a limited liability partnership?
Yes, though it won’t be as simple as if you were in more traditional employment. Mortgage lenders will treat you as being self-employed and so their assessments will differ accordingly – you’ll need to provide different income evidence and will need to show how the LLP is set up and managed, and things can get even more complicated if you want to buy a property as an investment with your fellow partners.
Either way, it won’t always be straightforward and you’ll likely require specialist support, which is why speaking to a broker who specialises in mortagages for LLPs is always recommended.
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How do these mortgages work?
In essence, these mortgages work in much the same way as a mortgage for PAYE applicants – and if you’re simply looking to buy a home in a personal capacity, you’ll generally have access to the same products. The main differences come in terms of the assessment process.
How LLP income assessed
Income will be assessed based on your net profit share (as seen in your finalised accounts) or your share of total income received (evidenced via your SA302 self-assessment tax returns).
Mortgage lenders will typically use an average of the previous two years’ figures, but if your profits or income have massively increased in the last year, some lenders may allow you to borrow against this figure instead. You may also be asked to provide additional clarity over the increase (likewise if there was a decrease).
The income calculations will be used to determine how much you’ll be able to borrow, with income caps always coming into it. Most lenders cap their lending at between 3 and 4.5x your income, though some will go as high as 5x or 6x depending on your circumstances.
Try our mortgage calculator below to get a rough idea of your total borrowing. Select ‘Partnership’ from the dropdown menu for ‘Trading style’ to get started.
Self-Employed Mortgage Calculator
This calculator can work out your maximum mortgage borrowing if you're self-employed. Select your trading style from the drop-down menu, then enter your income and outgoings, and our calculator will do the rest.
You could borrow up to
Most lenders would consider letting you borrow
This is based on 4.5 times your net profit or the total income declared. To borrow more than this, you will need to speak to a mortgage broker who specialises in self-employed borrowers
This is based on 4.5 times your share of the partnership's net profit or total income declared. To borrow more than this, you will need to speak to a broker who specialises in self-employed borrowers
This is based on 4.5 times your share of the net profit/salary plus dividends, or total income declared. To borrow more than this, you will need to speak to a broker who specialises in self-employed borrowers.
This is based on 4.5 times your income. To borrow more than this, you will need to speak to a broker who specialises in self-employed borrowers.
Some lenders would consider letting you borrow
This is based on 5 times your net profit or your total income recieved. This income multiple is often unavailable to borrowers who aren't applying through a mortgage broker.
This is based on 5 times your share of the partnership's net profit or your total income recieved. This income multiple is often unavailable to borrowers who aren't applying through a mortgage broker.
This is based on 5 times your share of the net profit/salary plus dividends, or your total income recieved. This income multiple is often unavailable to borrowers who aren't applying through a mortgage broker.
This is based on 5 times your income. This income multiple is often unavailable to borrowers who aren't applying through a mortgage broker.
A minority of lenders would consider letting you borrow
This is based on 6 times your net profit or the total income declared. This income multiple is only available under specific circumstances and is usually only accessible via a broker.
This is based on 6 times your shares of the net profit or total income declared. This income multiple is only available under specific circumstances and is usually only accessible via a broker.
This is based on 6 times your share of the net profit/salary plus dividends, or total income declared. This income multiple is only available under specific circumstances and is usually only accessible via a broker.
This is based on 6 times your income. This income multiple is only available under specific circumstances and is usually only accessible via a broker.
Now that you have a rough idea of your maximum borrowing, get in touch to speak to a mortgage broker who can provide bespoke calculations and access to the best rates and deals.
It’s worth pointing out that some lenders operate slightly differently and may be able to use an internal reference from the partnership in an affordability assessment, rather than needing to rely on accounts or tax returns. However, documentary evidence from the LLP’s accountant will still be required.
Other factors that can affect eligibility
Limited liability partnership borrowers will also be assessed for a mortgage based on the following criteria…
- The length of time you’ve been trading as an LLP. Many lenders expect self-employed borrowers to have been trading for at least three years, and this applies if you’re in a partnership arrangement too. However, a lot will accept two years’ accounts and few will accept applications after you’ve been trading for a year or even less, though they may need to see additional evidence of your experience in the sector and/or previous employment.
- How the LLP is set up and for what purpose. You’ll need to show evidence of the other partners, directors and shares involved in the business, as well as the nature of the LLP. This is especially the case if the partnership was set up as a special purpose vehicle (SPV) and/or you want to apply for an investment mortgage in partnership.
- Debts. If you’re getting a partnership mortgage, any debts the LLP has could impact your eligibility. The same applies if you’re getting a residential mortgage on an individual basis, with your credit score always coming into it. It can still be possible to get an LLP mortgage if you’ve got bad credit, but you’ll likely need to seek specialist lenders and will normally need to put down a higher deposit and pay higher rates.
- Deposit. Deposit requirements will be broadly the same for self-employed borrowers as for PAYE borrowers, unless you’re getting a buy-to-let mortgage. However, some lenders will impose a lower maximum loan-to-value (LTV) and therefore will ask for a higher deposit, particularly if you haven’t been trading for long.
Other more standard factors can impact eligibility as well – as is the case with all mortgages – including the type of property you’re buying (specifically whether it’s of non-standard construction), your age (particularly if you’re heading towards retirement) and your outgoings.
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How a broker can help secure mortgages for LLPs
As a self-employed borrower, an expert broker can be invaluable in your mortgage search. They’ll be able to help determine the kind of mortgage you could be eligible for and will work with you to pull together the documents you’ll need, and work out the best way to prove your income based on your circumstances.
They’ll have a network of lenders they know will be most likely to approve your application, too, and may even be able to access exclusive deals that you won’t be able to find anywhere else. Their help can be even more invaluable if you’re looking for specialist deals – such as a buy-to-let mortgage or an investment mortgage with your fellow partners – and can make the whole process far less stressful, saving you time and in many cases money as well.
Make an enquiry and we’ll match you with a broker who specialises in limited liability partnerships today.
Which lenders will consider your application?
Most mortgage lenders will consider applications from borrowers who are part of an LLP, including both mainstream and more specialist providers, though they’ll normally have a different eligibility criteria or require different documentation. For example:
- HSBC will accept applications from limited liability partners with no minimum experience requirement, though they’ll need to see evidence of two years’ income.
- Barclays stipulates that applicants must have been part of a partnership for long enough to provide two years’ tax assessments or calculations, two years’ tax overviews (or trading accounts for the most recent year), a letter from a finance or senior partner confirming income, and three full months of consecutive bank or building society statements.
- Virgin Money can consider professionals who have joined an LLP from day one, though they’ll require the applicant’s two previous P60s to see a track record of income.
The fact that criteria can vary so wildly is why the support of a broker who knows the market inside out can be invaluable. The above was accurate at the time of writing (August 2022) but all mortgage criteria is subject to change.
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Are interest rates on these mortgages any different?
Mortgage rates can sometimes be higher for LLP mortgages, particularly if you’re buying in a partnership for investment purposes. They’re often decided on a case-by-case basis and will depend on a whole range of factors, and with rates in flux at present, it’s best to speak to your broker or lender who can give you an accurate idea of the rates you may be charged.
Get matched with a broker who specialises in self-employed mortgages
Finding a broker who specialises in this sector can sometimes be as tricky as finding a mortgage itself, which is where we come in. We’ll do the hard work for you by matching you up with a broker who specialises in mortgages for limited liability partnerships and knows exactly which lender you should approach, and it couldn’t be easier to get started.
Just tell us a few details and we’ll scour our network of brokers to find the one who could be perfect for your needs. Just make an enquiry or call us on 0808 189 2301 for a free, no-obligation chat with your ideal mortgage advisor today.
Article key takeaways
Getting a mortgage could still be possibleThe expert mortgage advisors we work with understand the intricacies of your circumstances and have helped many people who are in a limited liability partnership (LLP) on their way to a hassle-free mortgage.
A broker can help you get it done rightThe right mortgage broker can help you make an informed decision about the best options. They will also have access to more deals by more lenders as they will be whole of market brokers.
Improve your mortgage eligibilityYour credit history, deposit size, your age and property type will all be considered by a lender as part of their lending criteria. so understanding and improving your eligibility could also increase your chances.
Find the right mortgage lenderChoosing the right mortgage lender is absolutely vital. The best way to find out whether sticking with your current lender is in your best interest is to speak to a mortgage broker.
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