Mortgage with One Years Accounts

Is it possible to get a Mortgage if you’ve only been Self-Employed for one year?

They are not widely available, but it is certainly possible to get a mortgage with just one year of accounting history. Whilst most Mortgage Lenders will expect Self-Employed mortgage applicants to be able to show three year’s worth of accounts, some specialist lenders will be able to help you. You should be aware that due to minimal lenders offering this type of mortgage, the interest rates on your mortgage are likely to be less competitive. As high street lenders won’t usually be able to consider your application, speak to Mortgage Brokers like ourselves to find out which lenders are more accepting of your situation.

How do I prove my income with one years’ accounts

For Self-Employed mortgage applicants, Mortgage Lenders will usually take an average of their earnings over a period of two to three years, to mitigate some of the risk, given that Self-Employed income is still considered less stable than that of employed people. Where you only have one year of accounts available, additional proof that your business will support your income in the longer-term is likely to be requested. Business plans and projected future income can usually back up your application, alongside business bank statements The Self-Employed business activities you perform will have an impact on how your income is used by the Mortgage Lender and how you provide your proof of income for your first year of business, as follows:

Limited Company Director

Your personal salary and dividends will be used, although rarely net profits are also considered. To prove this you will need: Your latest years finalised accounts, certified by a qualified accountant SA302 for the same period Business bank statements Sole Trader/Freelancer Your personal income will be used to calculate your mortgage and you will need to provide: SA302 for the year Certified accounts at least 12 months worth, but the more the better Partnership To use your income derived from a partnership, you must own at least 25%. Your share of the net profits will be used in the mortgage calculation. To prove this you will need: SA302 form for the year How much can I borrow? A typical mortgage applicant can expect to borrow four and half times their annual income. This should not be affected by your employment type unless your income is low or you have a poor credit score. What deposit will I need? There is no specific deposit requirement needed by Self-Employed applicants and the minimum deposit usually needed for a Standard Residential Mortgage is 10%. That being said, with a short trading history, you will increase your chances of securing a mortgage if you are able to offer more than the minimum deposit requirement. This can also give you access to more competitive mortgage rates. Do I have access to the Help to Buy scheme if I’m Self-Employed with one years accounts? All of the government home ownership schemes were created to help those applicants who would struggle to get a mortgage under normal circumstances. This extends to Self-Employed applicants and although there will certainly be less availability if you have fewer years of accounts available, again, specialist Mortgage Lenders should be able to help you.