One of the most thrilling investments you’ll ever make is purchasing a home. When you’re a self-employed borrower, mortgage lenders also take into account the same factors: your credit score, the amount of debt you have, your assets, and your income. It’s possible to obtain a mortgage with only one year’s worth of accounts. By doing this, you’ll be able to convince the lender that you’ve been profitable for at least a year. You submit the same mortgage application as everyone else if you’re self-employed with one year’s worth of accounts and want to buy a house.
Prior to recent years, the majority of lenders demanded to see a track record of 2 to 3 years’ worth of accounts. Fortunately, this has changed, and there are now a variety of lenders who offer self-employed mortgages for borrowers with only 1 year’s accounts.
If you work for yourself, you’re undoubtedly accustomed to having to be more organised and keep track of your revenue. That will be helpful when the time comes to apply for a mortgage, as will this review of what to know and how to get ready.
Most importantly, if you only have 1 years’ accounts, you might require a specialised lender. This is because, given that you just started working for yourself, employers will view you as a high-risk applicant. Due to the stricter restrictions faced by high street lenders, candidates with less than three years of accounts are more likely to be rejected.
Do you have 1 year of account history? Count Ready can get self-employed mortgages with just a year of account history! Get in touch with our mortgage specialists right away for further details.
How much can I borrow with 1 years’ accounts?
With a year’s worth of accounts, it’s likely that you’ll need a professional lender to get a mortgage. How lenders determine an applicant’s income for a self-employed mortgage can vary greatly. Some would base the calculation on your most recent year’s reported income, while others might use an average of the figures from the previous two or three years.
Lenders may look at retained earnings, salary and dividends from a limited company structure, and direct income in different ways.
There isn’t a set formula that lenders must follow when determining your income. Once you know how much you can borrow, though, you should have to follow the same rules as everyone else who applies for a mortgage with the same institution.
Is it harder to get approved for a mortgage while self-employed with 1 years’ accounts?
If you match the requirements of the lender, you may still be eligible for a mortgage even if you work for yourself, as a contractor, or as a freelancer.
In reality, obtaining a mortgage while you are self-employed with one year’s worth of accounts is very similar to doing so when you have records of more than 1 year. In fact, a specialist mortgage broker can help with this.
Can I get a self-employed mortgage without proof of income?
Every time a borrower submits a mortgage application, the lender will want proof of income. The applicant’s ability to pay back the loan is one of the most important things that lenders look at. This needs to be confirmed and recorded. So, sadly, income will always need to be supported.
What is an SA302?
SA302 is a statement provided by HMRC that demonstrates your earnings. In order to confirm the income of self-employed mortgage applicants, many mortgage lenders may request comprehensive accounts (often spanning one to three years’ worth). However, SA302 forms are becoming more and more popular.
Can I get a self-employed mortgage with bad credit?
Finding a mortgage lender willing to work with you when you have poor credit might be challenging. Mortgages for the self-employed with bad credit are something our mortgage brokers know a lot about. This is because they have access to specialised criteria and products that aren’t easily available to all mortgage brokers.
Are self-employed mortgages with 1 year’s account more expensive?
In general, it can vary from lender to lender, and they aren’t more expensive because the mortgage products are the same for salaried employees and self-employed individuals.
If you can’t demonstrate your income or don’t have a sizable deposit on hand, it can become more expensive because you might be assessed a higher interest rate.
Do you need a mortgage with 1 years’ accounts?
Self-employed borrowers are subject to all standard requirements. Our knowledgeable experts are here to help if you’re self-employed and need a mortgage for one year’s worth of accounts.
If your credit history is strong, you will have more options accessible to you, and the potential to make a larger down payment will lower the amount of loan you require.
Get in touch with a specialised self-employment mortgage broker who can help you obtain a mortgage with just 1 year’s account history!