Self-Employed Mortgage with One Year’s Accounts

Can I get a mortgage if I have been self-employed for one year?

It can be worth waiting some time to approach a lender if you can afford to provide more accounts for them to assess. You will still be able to find options if you have only been self-employed for one year, but the options will be limited, and it will be important that you have paid at least one year’s worth of tax.

There are specialist lenders out there for self-employed borrowers if you do not have the correct accounts needed for a mortgage, but you will need to delve into the mortgage market to find them. It can be worth seeking out a mortgage broker to assist you in finding the right lender for you.

How do I prove my income with one year’s accounts?

Lenders will look at your income in order to assess whether you can afford the mortgage you are applying for. You will need to prove your income and as someone who is self-employed, this means gathering your documents.

As a sole trader or a member of a partnership, you will need to show to the lender your share of the net profits as well as all SA30s forms you have. As a Limited Company Director your salary will be explored as well as any retained profits.

Most lenders will also require a projection of future profits and confirmation that your business is likely to continue to grow, they will normally expect this to come from a qualified accountant.

How much can I borrow?

The amount that you can borrow is going to depend on how much you earn annually. As a self-employed applicant who has been trading for only one year or under you will need to hand in as much proof of upcoming work and previous work as you can. You may need to seek the help of a qualified accountant to help get your paperwork in order.

Your credit score plays a huge part in deciding how much you will be able to borrow too. If a lender can see that you can handle borrowing money and are reliable at paying it back, then it is more likely you are going to be deemed less of a risk to lend to.

All lenders have different criteria to fill so it is important to look into the criteria of your chosen lender before approaching. A mortgage broker at CD Financial can help you find a specialist lender and discuss your mortgage options.

What deposit will I need?

Typically, you can expect to need to provide 10% of the purchase price of the property in question as a deposit. If you are self-employed and have been trading for less than a year you should aim to provide as much of a deposit as you can.

If you happen to be a first time buyer, there are schemes that you can access in order to provide a slightly lower 5% deposit. There are a number of different lenders out there and many can be flexible too, the bigger the deposit the more likely they are to accept you onto a mortgage.

Is Help to Buy available for the self-employed?

So long as you have at least a year’s worth of accounts, you will be able to access the Help to Buy scheme. This will allow you to buy a property with only a 5% deposit and then the government will give you another 20% to put towards your wanted property.

You need to be careful as even though you can access the Help to Buy scheme there are limited lenders who are willing to accept a self-employed applicant who is accessing the scheme onto a mortgage. You should speak to a mortgage expert to discuss the right option for you.

How can a mortgage broker at CD Financial help me?

Here at CD Financial we can access the whole of the mortgage market for first charge mortgages meaning that we can access mortgage deals that are not available through high street lenders. Once we have listened to your position and needs, we will advise on lenders and what mortgage options are there for you. Through Openwork Limited, we are authorised and regulated by the Financial Conduct Authority meaning we are qualified to help with mortgage applications and mortgage lenders.

As someone who has only been self-employed for a year it can be harder to obtain a mortgage due to the lack of accounts you have to provide, there are options out there for you depending upon your circumstances. Get in touch with a mortgage expert at CD Financial today to discuss your options.

Your home may be repossessed if you do not keep up repayments on your mortgage.