Self-employed Mortgages with 1 Year Accounting Period.
At Mortgage321 we've helped a number of clients who have asked us to arrange a mortgage even though they only have 1 years accounts.
They often say to us "My Bank/Building Society will not consider my income until I have at least 2 years accounts or, in some cases, 3 years accounts"
We work with a number of lenders who are happy to consider applicants with 1 years accounts when assessing mortgage affordability.
Mortgages with 1 year accounts.
In the days of self-certification, when applying for a mortgage a self-employed person or Company director, with more than 20% shareholding, could simply give a statement about their earnings for the lender to use as a basis for awarding it.
Since that option was removed in 2011, getting a mortgage when you’re self-employed or a Company Director has become a little more challenging, but it is by no means impossible.
Regulations require mortgage lenders to ascertain an applicant’s proof of income, to show they are lending responsibly and that the borrower is able to repay the loan. Some lenders do this by requesting up to three years’ worth of business accounts, which can be a problem if you’ve only been trading for 1 year.
Fortunately, it is possible to get a mortgage with one year’s accounts, although it’s not the easiest task. Lenders willing to consider providing a mortgage in these circumstances will typically ask for a lot more background information than just your accounts. They will be interested in how long you have been working in your trade prior to being self-employed or a Director, whether previous jobs have been similar to your business now, and your previous income level through that work. All these and more will play a part in the underwriting process and give a guide to your income and outgoings.
Lenders will also give more flexibility if you are able to put down a larger than average deposit, or already have a lot of equity in a current property, then they will feel more confident about their perceived level of risk in the mortgage.
That's where Mortgage321 can help - in presenting you as a borrower in the right way to ensure you will be accepted with just one years accounts.
To find out more contacts us today and see how we can help you!