As a start-up entrepreneur or self-employed professional, you may be wondering if it's possible to get a mortgage with one year's accounts. Perhaps you've heard you'll need two, or even three years' books before you can apply.
If so, this guide will help you understand your mortgage options. You'll also learn how much you can borrow, what documents lenders will need to verify income, and how we can advise you to get the right mortgage deal for your circumstances.
- Can I get a self-employed mortgage with 1 years accounts?
- How much can I borrow on a mortgage with 1 years accounts?
- How will mortgage lenders assess my income?
- What documents do lenders require to prove my income?
- Do I lose my trading history if I change from sole trader to limited company?
- Can I get a 95% LTV mortgage with just 1 year's accounts?
- I've got bad credit on my credit file. Can I still get a mortgage?
- Getting a mortgage with 1 years books
Can I get a self-employed mortgage with 1 years accounts?
Yes, it's absolutely possible to get a mortgage if you only have one year's accounts.
It's true that the majority of lenders will want to see at least two years of accounts to approve a self-employed mortgage.
When you have several years' accounts, mortgage providers can be that much more confident of the sustainability of the business. As well as how your earnings have progressed year-on-year.
Fortunately, there are a small number of mortgage providers happy to consider applicants with just one year's books.
Some, but not all, of these lenders will:
- Request a projection of your second year's trading performance signed off by your accountant.
- Set a lower maximum LTV in the 80-90% range.
Can I get a mortgage with less than a year's accounts?
It's possible, but only in very limited circumstances. For example, it may be possible for a contractor to get a mortgage if they have a track record of previous employment in the same industry.
But generally, the answer is no, because banks and building societies want to see verifiable proof of earnings via HMRC filed accounts and self-assessment tax calculations.
Having said that, if you're in the final 3 months of your first year's trading, and you have a good idea of what your year-end numbers will look like, it's certainly worth contacting us on 0117 205 0655 at that point.
We can get you an Agreement In Principle from a lender, based on your anticipated figures or accountant's projection for year one, and make a formal mortgage application as soon as the accounts are submitted to HMRC.