Self Employed and less than 3 or 2 years accounts
At View Finance we love slightly more complex cases. So what happens if your a first time buyer and self employed.There reality is the options are a little more restricted depending on the lender. We are whole of market and have a lot of years combined of doing mortgages and we all have that "friend" that knows a bit about everything but unless they are a qualified mortgage advisor that has been doing mortgages for as long as we have I reckon we will be able to point you in the right direction.
When you are employed its quite easy for a lender to work out what your income is, you will have an employment contract, wage slips normally a regular amount that is paid into you account every month/week so the lender can quite comfortably work out what you will earn in a year and whats affordable. They have a responsibility to do this and so do Mortgage advisors. For a self employed person is a little harder to work out what they will earn as it will vary they may have good weeks and bad weeks, what happens if you want a holiday? This is why 1 full year is required as a minimum without this it is likely it wont happen. The fact that you are a first time buyer has little impact in this scenario they reality is they lender will what to see what you earn whether you are a first time buyer, home mover or Re mortgaging.
1 Years accounts are possible with certain lenders you will need to make an enquiry to find out if you are eligible for this, The amount that you can borrow will also depend on your income "total received" for a sole trader and normally salary and dividends for a limited company director ( some lenders will use retained profit) and this can be with as little as a 5% deposit. If 5 or 10% deposits are not possible the minimum deposit for 1 years self employed is 15% and this would normally be a specialist lender.
Generally speaking most lenders and high street lenders will require a minimum of 2 or 3 years worth of accounts for self employed mainly due to the reasons above some can move from this time frame if for example you are close to your year end and have exceeded the yearly income from the previous year will consider this information documented by your accountant or a reference
For a sole trader you will be required to provide your SA302 This is a document that confirms your tax return has been submitted formally to HMRC it will detail how your income is made up, ie self employed income or whether this is from dividends and employment or Land and property. This along with a tax year overview view is required ( this shows the tax paid ) This will show the income earnt for the year and will be used to calculate what you can borrow, along side your other commitments such as debts, dependents and various other factors.
f you would like to find out whether or not you are eligible to apply for a mortgage, or would just benefit from some more information on Mortgages then contact us today on
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