Can I get a mortgage with an LLP?

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Can I get a mortgage with an LLP?, Yellow Brick Mortgages

Can I get a mortgage with an LLP?

Tom explains the mortgage process if you are applying in a limited liability partnership.

Podcast approved by The Openwork Partnership on [xx/xx/xxxx]. 

What is a limited liability partnership or LLP for short? Can you get a mortgage in a limited liability partnership?

Yes, you can get a mortgage in a limited liability partnership. It’s a type of company that gives all of the partners involved limited financial liability. All partners can participate in management decisions – which is slightly different to a limited partnership, where you have to have one general partner who has unlimited liability and limited partners can’t then be part of the management. That’s the slight difference between the two. 

Mortgage lenders tend to treat LLP directors as being self-employed, so for assessments you will need various different income evidences and information about the business.

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?

Yes, you can get a mortgage even if you are newly established. But the trading history of an LLP does play a crucial role in eligibility for a mortgage. A longer history shows more stability and less risk. 

So while the age of the limited liability partnership matters, it’s not the sole reasoning for whether a mortgage application will be accepted.

How are LLP mortgages assessed by lenders? What mortgage criteria does an LLP need to meet?

When applying as part of a limited liability partnership, you are typically considered as self-employed, so different assessment requirements are in place.

You will need evidence of income and detailed insights into how the business operates, how it’s managed and various different documentation that a self-employed person would have.

What documentation will lenders want to see as an LLP?

The more information you can have upfront, the better. Typical documentation needed are things like your SA302 tax calculations for the last two years, obviously assuming that you have been going that long. 

You also need the corresponding tax year overviews for those years, the accounts for the partnership and anywhere between three and six months’ business bank accounts.

How much can an LLP borrow? Is there a cap on this, and how much deposit is needed?

That’s a very hard question to answer, because each lender has a different affordability calculator. They’ll have different deposit requirements as well, depending on whether you’re a new LLP or if you have been established for a longer period of time. 

That’s really why it’s best to come and speak to us. We can look at all of that for you and find out the minimum deposit required and go from there. 

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Can an LLP with company debt apply for a mortgage?

Yes. Whilst it’s not as easy if an LLP is in debt or has bad credit, it’s still possible. Lenders will consider funding after assessing the debts and understanding the reasons why there’s any bad credit there. They’ll then take a view. 

What happens if I have bad credit as an LLP partner?

It’s still possible to get a mortgage if you have bad credit, but potentially we’ll need to look at specialist lenders. They may ask you to put down a bigger deposit, and you may have to pay a slightly higher interest rate, which means your monthly payments will cost more.

Can I get a Buy to Let mortgage as an LLP? 

Yes, you can get a Buy to Let mortgage in a limited liability partnership, providing you meet the lender’s criteria at the time. Typically you will need a bigger deposit and the property would have to meet the rental income requirements of the lender. 

How does remortgaging work as an LLP? Any differences in the process here?

No, not at all. It’s a straightforward remortgage. It involves the same work that we would always do upfront, in terms of finding a suitable lender who would lend the right amount of money.  You might choose to stay with your existing lender or look to move to another provider that’s offering us a better deal. It’s not too different, really.

How can a mortgage broker like Yellow Brick Mortgages help with a mortgage for an LLP?

Lenders will want to know the finer details of the limited liability partnership – things like the number of directors and the shareholding profits of the company. So a mortgage for a limited liability partnership does involve a lot more. 

We’re here to help you maximise affordability and find the best deal for you. You want to make sure you’re not overpaying for your mortgage, and for that reason it’s crucial to speak to someone like ourselves to find the best deal that you’re eligible for.

Finding the best deal doesn’t necessarily mean finding the lowest or cheapest rates. It’s seeking out the right deal for your business at that time.

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

SOME BUY TO LET MORTGAGES ARE NOT REGULATED BY THE FINANCIAL CONDUCT AUTHORITY.

Approved by The Openwork Partnership on [xx/xx/xxxx].