Can I get a mortgage if I have only been Self-Employed for a year?
You might be wondering if you can access a mortgage with only one year’s accounts and the short answer is yes. There will be options out there for you – but it will not be an easy search and obtaining a mortgage with only a years’ worth of accounts can be difficult.
It would be worth seeking specialist advice. At Bespoke Mortgage And Finance Centre Ltd we have knowledge of the mortgage market and can find the right lender for you. This will give you more options than high street lenders and building societies.
If you come under the following, then you will be able to find a mortgage with only a years’ worth of accounts:
- Limited Company Director trading for nine to twelve months
- Sole trader trading for nine to twelve months
- Established business that have recently changed to limited
- Contractors working for less than twelve months
- Self-employed for 9-12 months
- Self-employed for 9-12 months with bad credit.
How do I prove my income with one years’ accounts?
You will need to prove your income to a lender through a self-assessment tax calculation from and this will require a chartered qualified accountant. If you are a Limited Company director then you will prove your income via your salary and showing any dividends, accounts and retained profits. You will need to show any finalised accounts as well as any signed agreements on contracts.
Every lender is different and every criteria will differ, one lender may accept retained profits towards your income whereas another may ignore it altogether. It would be worth investing in a mortgage expert at Bespoke for mortgage advice and to help find the right mortgage lender for you.
How much can I borrow if I only have one years’ accounts?
The amount that you will be able to borrow will highly depend on your current financial situation and your credit report. If you have a good credit score and a good financial history then you could access up to five times your annual salary.
If you are on a higher income and can prove this to lenders then you can sometimes borrow even more than five times your annual salary, but this is in special circumstances. If you have not been trading for a year you could always seek an income projection. An income projection is when an accountant will give an estimate on your annual income based upon what you have worked.
What deposit will I need?
You will need at least a 10% deposit as this is the standard across residential mortgages. If you are a first time buyer you could access schemes to allow you to give a deposit as low as 5%.
There are lenders out there who will accept you on to a mortgage with a lower deposit, but they are hard to find. You may need the help of a specialist broker to be able to find these lenders.
As already mentioned, every lenders’ criteria is different and it is important to check the criteria very closely before approaching a lender in order to save time on the mortgage application process just to hear a no.
Can I get Help to Buy as a Self-Employed borrower with only one years’ accounts?
If you are a first time buyer then you can access the government’s Help to Buy scheme which allows you to approach lenders with a bigger deposit. If you can gather 5% of the property’s value as a deposit the government will match this with another 20%.
How can a Bespoke Mortgage and Finance Centre Broker Help?
Here at Bespoke Mortgage and Finance Centre we have a team of experts ready to guide you to the right lender for your situation. Being Self-Employed can come with its own challenges so why make finding a mortgage a challenge? There are mortgage products out there that are not authorised and regulated by the financial conduct authority that we can access and use our qualifications to make sure everything is legitimate.
Bespoke Mortgage Brokers have access to the independent mortgage market meaning they can access lenders that can offer more flexibility. As someone who has not been trading for an amount of time you may find it difficult to find lenders that are going to accept you.
We will be able to guide you through the mortgage application ensuring it is at its strongest before approaching a specialist lender that has been selected tailored to your situation. It is so important to pick the right mortgage to commit to as if you do not keep up with mortgage repayments your home may be repossessed.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE