Secure Trust Bank Mortgages will now consider net profit as part of its affordability assessment for self-employed borrowers.
Net profit after tax can be used on a case by case basis for limited companies where the applicants are majority shareholders. Net profit can also be used for sole traders and, for applicants who work in a partnership, such as a limited liability partnership, Secure Trust Bank will use the partner’s salary plus share of net profit after tax.
Secure Trust Bank asks for two year’s accounts as standard but can consider applicants with less trading history and can use the last year’s figures if appropriate.
The lender can also use anticipated income for the recently self-employed.
Tony Hall, head of sales and marketing at Secure Trust Bank Mortgages, said: “At Secure Trust Bank, we underwrite every application on its own merits and have flexible criteria so that a strong case never goes ignored.
“Our standard policy for company directors is to use remuneration plus dividends received, but with changes to the tax treatment of dividend income, we know that this approach might not be appropriate for everyone.
“So, in the right circumstances, we can also look at the profit generated by the business and consider the director’s share of that profit.”
