Non-standard profiles
Company director or manager: making your income legible for a mortgage
Company director: the lender reviews your personal file and the company’s. The documents that make your income legible, and the commitments to declare.
For a company director, the lender reviews two files: yours and that of the company which remunerates you. Your income is only taken into account if the company can service it without being weakened. It becomes legible with two sets of documents provided together: tax notices and remuneration certificates on one hand, complete balance sheets and general meeting minutes on the other, and with commitments taken for the company declared from the outset.
By Sandy MASCART, mandataire d'intermédiaire en opérations de banque et en services de paiement ORIAS 26000541 sous le mandat de CDV PATRIMOINE & ASSURANCE (ORIAS 14005573)
Key points
- For a company director, the lender reviews two files: yours and that of the company which remunerates you; your income is only taken into account if the company confirms it.
- Leaving profit in the company also supports your personal file: increasing equity makes your remuneration credible.
- Dividends only count as income if they are regular over several years and consistent with the company's profit.
- Guarantees given for the company and personal loans linked to the business are declared from the outset, before a balance sheet reveals them.
- The best time to apply follows shortly after the closing of the accounts for a good financial year, when the balance sheet is fresh.
As a company director, the bank reviews two files: yours and that of the company which pays you. Submit them together, in the order of the analyst. A classic case of atypical profiles; length of service and micro regime: the self-employed.
Mortgage for a company director: income read in three stages
What you have actually received over several years, then what the company can pay without weakening, finally what you owe to it on a personal basis. A fragile company reduces the value of your income.
Leaving profit in the company also serves your personal file.
Two sets of documents
Yours: complete tax assessments, payslips or remuneration certificate from the chartered accountant, statements of all your accounts, loans and commitments, including those for the company.
The company’s: complete financial statements for the last financial years, articles of association and recent extract of registration, minutes fixing remuneration and dividends, interim situation if the balance sheet is dated, table of loans.
The rest: the documents to gather.
The five signals of the analyst
| What he reads | The question he asks himself | What reassures him |
|---|---|---|
| Turnover and profit, over several financial years | Does the activity hold up over time? | A stable or rising trend, without unexplained year |
| Equity | Does the company have reserves? | Positive and increasing equity |
| Company debt | Can it still pay its director after its own instalments? | Debts consistent with the activity |
| Cash flow | Is remuneration paid without strain? | No structural overdraft |
| Current account of shareholder | Does the director lend to the company, or borrow from it? | A credit balance or nil |
An atypical year? Attach a half-page of explanation, drafted with the chartered accountant.
Dividends: when they count
If they are paid for several consecutive years, are consistent with the results, and do not deprive the company of funds. An exceptional dividend or one that is very recent is generally not taken into account.
Changing your mode of remuneration for a purchase must be prepared for long in advance.
Declare your commitments from the outset
- Guarantees for the company: the answer to the form is yes (a guarantee from a relative).
- Debit current account: regularise this before submission.
- Personal loan that financed the company: it counts towards your debt-to-income ratio.
Holding: a one-page scheme
- Who holds what, in percentages.
- The flows that remunerate you.
- The accounts of each company.
- The debts of the holding, including any refinancing loan.
Submit just after a good balance sheet
A fresh balance sheet, a tax assessment available: the best moment. Has a preliminary sale agreement already been signed? An intermediate situation and a certificate from the chartered accountant.
The decision belongs to the lender (fees). Explain your situation by telephone, with the two most recent balance sheets in hand.
Create your file: your two folders go together.
Sources
Read next
- Mortgage in Lyon: frequently asked questions
- Mortgage for self-employed professionals or micro-entrepreneurs: two or three financial statements to borrow? Years in business, micro-business deduction, salary or dividends, irregular income: what the bank actually considers, and how to prepare your file.
- Net take-home, net payable, gross: which income does the bank actually use? Net payable, gross, taxable, bonuses, dividends, rents: what the bank actually uses to calculate your borrowing capacity, before you start house-hunting.
- Mortgage for self-employed professionals: ensuring your financial statements are assessed at their true value Line-by-line adjustment of the profit, double counting of the business loan, current account, SELARL, takeover: what increases your income taken into account.
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