What documentation will I need?

When applying for a self-employed mortgage, you may need to provide more detailed documentation than a standard employed applicant. Essential documents typically include your tax returns for the last two to three years and financial accounts prepared by an accountant. Lenders usually request the SA302 tax calculation forms, which outline your income after expenses, along with a Tax Year Overview that summarises your total earnings and tax paid. In addition to your business accounts, you may need to submit personal bank statements and your company's financial statements, particularly if you are a limited company director. These statements often include profit and loss accounts, balance sheets, and details of dividend payments. Depending on the lender and your business structure, you might also be asked for additional supporting documents such as contracts, invoices, or a statement of projected earnings.

How will my income be assessed?

Lenders typically assess your income based on your business structure. If you're a sole trader, they'll usually look at your net profit. If you operate through a limited company, they may consider your salary and dividends, or sometimes your salary plus net profit. Most lenders use average income over the past two years, though some may accept the most recent year if it's higher and your income is stable. We will be able to match you with a lender that is most suited to your individual circumstances.

Can I get a mortgage if I've only been self-employed for 1 year?

Obtaining a self-employed mortgage with only one year of accounts can present some challenges but it is definitely possible. Although a shorter trading history may limit the number of lenders willing to consider your application, we have access to lenders experienced in working with newer self-employed applicants. However, applicants with two or more years of self-employment often benefit from a wider range of mortgage options and potentially more competitive interest rates.