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Mortgages for Self-employed with 1 years Accounts and More

 Mortgages for the self-employed are not a myth! Here at Mortgage Search Go, if you’re self-employed, we’re in a great position to help you find the right mortgage.

You may be surprised to know that the process through which we obtain a mortgage offer for self-employed people is very similar to the process we work through for the employed.  

You’re assessed on your past and future income in addition to your expected ability to meet your repayments.

Many of those who are self-employed take a monthly salary and/or dividend and this, along with the SA302 form and Tax Year Overview will support your application with a mainstream lender.

There are lenders that will look at retained profit within a limited company, and other lenders will consider clients with only 12 months worth of trading under their belts.

Mortgage Search Go is a whole of market brokerage. That means we have a nationwide network of lenders so we’re not tied to any one lender. If there’s a mortgage available to you as self-employed person, a whole of market broker will find it!

For more information call us on 0844 69 333 60 or click here to contact one of the helpful Mortgage Search Go team.

Mortgages for the self employed 

Are self-employed mortgages special products? Or is the way you apply for them unique? 

No, not really. A mortgage is a mortgage and like any mortgage you need to produce the necessary documents to show the lender, to prove to them that you are a good risk.

Proof of identity and residence are standard for any mortgage, but it's the income area where it gets interesting.

For the self-employed, lenders normally request documents from HMRC for income covering the last two financial years. These documents are called SA302's (Tax calculations) & Tax Year Overviews.

Lenders typically average the last two years figures (occasionally a lender may take the latest figure), but if the figures are decreasing, they’ll take the latest, lower figure. For some limited company directors, a few lenders will look at the retained profit within the company in addition to the salary and dividends actually taken. This can boost the amount you can borrow considerably.

 

How do you get an SA302 and Tax Year Overview?

Tax Assessments (SA302s) are easy to get hold of. Here’s how to do it:

  • • Log in to your HMRC online account via www.online.hmrc.gov.uk
  • • Select ‘Self-Assessment’
  • • Follow the link ‘tax return options’
  • • Choose the year from the drop-down menu
  • • Follow the link ‘view calculation’
  • • Follow the link ‘view and print your calculation’
  • • Follow the link 'print your full calculation'. 

 

For Tax Year Overviews you should:

  • • Log in to your HMRC online account via www.online.hmrc.gov.uk
  • • Select ‘Self-Assessment’
  • • Follow the link ‘view account’
  • • Follow the link ‘tax years’
  • • Choose the year from the drop-down menu and click the ‘Go’ button
  • • Follow the link ‘print your Tax Year Overview’.

 

 

Are you limited with choices for a mortgage lender if you’re self-employed?

Again, not really. Lenders have schemes for both employees and the self-employed, there are some lenders that are just better at handling self-employed clients and choose to specialise in them. It's part of our job as a mortgage advisor to understand which lenders are more likely to be sympathetic to a client’s circumstances and understand the risks/challenges involved.

No one is out to get you as a self-employed person and you’re far from a minority in the UK, after all.

 

What do you do if you’re self-employed and have no proof of income? 

We’re afraid that this will mean no mortgage. A lender simply can’t lend to you if you can’t prove an income. No proof of income, no mortgage.

 

What’s the self-employed mortgage multiplier?

We’re often asked this, so we thought we’d mention it here.

There isn't one.

Each lender uses its own affordability calculator and the results can be very different, sometimes differing by tens of thousands of pounds.

So, it's always best to seek advice on this from a broker or advisor. It could mean the difference between obtaining the mortgage and property you really want and settling for second best.

 

Can you get a mortgage if you’re self-employed and only have one year of accounts?

Yes, and there are still lenders offering this. This isn’t as unusual as you might think, and many lenders will not only lend on just one year’s accounts but will specialise in the skill of doing so.

As with all the examples here, it really does pay to pick up the phone and have a chat. We’ve seen so many variations on the above and it’s always a case of taking each client case by case and finding the product and mortgage that suits them. We match a lender to the buyer so both parties get the best outcome.

 

For more information call us on 0844 69 333 60 or click here to contact one of the knowledgeable Mortgage Search Go team.