Self Employed One Years Accounts

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Self-Employed Mortgage with One Years Accounts

If you are self-employed, it may seem daunting beginning the search to obtain a mortgage, but there is good news – it isn’t impossible. Lenders tend to prefer employed borrowers who are under the PAYE system as it makes reviewing their finances easier.

Self-employed workers will need to prove their income which can be a longer process due to having to file taxes and accounts yourself or through a qualified accountant. There are specialist lenders out there who specifically cater towards self-employed applicants too.

Can I get a Mortgage if I Have One Years of Accounts?

It is best to have been trading for three years to provide three years’ worth of finalised accounts to a lender when applying for a mortgage. That being said, there are options if you have only been trading for a year and a handful of options available to you if it has only been nine months.

It is important to have been trading for at least a year so you can provide documents from the tax year. There are specialist lenders out there that will consider you if you haven’t completed a year’s worth of trading, yet as you can imagine the market is limited.

How do I Prove my Income with One Years of Accounts?

Whether you have one year or twenty years’ worth of accounts the figure is used the same. As a sole trader or someone working in a partnership, the figure will be your share of the net profit or the total income received on a self-assessment tax return (SA302’s). If you are a Limited Company Director, then it will be the director’s salary and dividend received as stated on the accounts or reference.

How Much Can I Borrow?

Self-employed applicants can commonly borrow the same amount as an employed applicant if you have a good credit score. This is usually around five times your annual income. If you can prove that you are on a higher income, lenders may allow you to borrow more.

If you have not been trading for a year yet, you can ask the lender to consider an income projection. This is where you estimate a year’s income based on the months you’ve been actively trading.

It is important to understand that lenders will vary in what criteria you will need to fill to be accepted onto a mortgage. It is important to look around at different lenders as there will be one suited for your needs. It is advisable to seek mortgage advice from an expert such as a Mortgage Broker to ensure you are making the right choice.

What Deposit Will I Need?

You will need at least a 10% deposit which is no different from other types of residential mortgages. This could however vary depending on your circumstances, lenders may ask for more of a deposit if you are considered a high-risk borrower. There are flexible lenders out there with flexible mortgage options and lower deposit options available. It is advisable to have as much of a deposit as possible to look attractive to lenders, especially if you have bad credit or no credit history.

Is Help to Buy Available for the Self-Employed?

You can get access to Help to Buy schemes if you have one years of accounts, meaning you can buy with a 5% deposit. There are however limited lenders who will consider self-employed help to buy mortgages so you may need to search for them.

How Can a Mortgage Broker Help?

A Mortgage Broker has knowledge of the whole of the mortgage market and will be able to cater to your needs. It can be stressful enough finding property let alone the heartache of being told no. A Mortgage Broker is honest with you and will look into your finances and work out what repayments on your mortgage you can afford.

Brokers will then help to find a lender which suits your needs and will actively help you to be accepted onto a mortgage. Brokers do not tend to charge for general enquiries and will only charge a fee once the mortgage application is being processed.

We also have access to more exclusive deals from lenders due to building a strong relationship through working together. Mortgage Brokers deal with all sorts of clients daily and have a lot of experience when it comes to self-employed mortgages and where to look.

You do not need to go through this process alone, speak to a Mortgage Broker today. Leave the searching and legalities to the experts, we can speed up the process and make it smooth.

Call us now on 0113 208 3308

to find out more or arrange a consultation.

Based in Leeds, One Mortgages & Protection Limited offers impartial and unbiased advice to customers UK wide, no customer is too far away to help.