Do mortgage lenders recognise a franchise as salary: ask the expert
I am considering a franchise option. My question is this. We currently rent a property, but would ideally be aiming to buy a house within the next 12 months. Will a mortgage lender recognise a franchise as a salary, as it would a standard job? I have heard stories in the current climate about banks not giving mortgages to borrowers who run their own businesses, and I want to know if being a franchisee would fall into this caveat too?
Answer by Vanessa Wheeler
All lenders take a different approach with this and I don't think that there will be a one rule fits all. Lots of factors will be relevant eg deposit, credit history, how much you want to borrow etc Will you be self employed or an employee of your own company ? I suggest that before taking on a franchise that you talk to banks, lenders and possibly a mortgage broker to get a feel for how lenders may view your particular circumstances.
Vanessa Wheeler is a solicitor at Setfords Solicitors. Please contact her for legal advice on business and commercial law, including franchise and contractual matters. She can also assist with employment matters. She and her colleague Vanessa Challess Dines will be holding a one to one legal clinic at Workingmums LIVE on 27 March where you can get direct advice on your employment law questions. People visiting the Setfords stand will be seen on a first come first served basis.