We receive a lot of enquiries from self-employed customers who aren’t sure whether they are able to apply for a mortgage. It might because they only have one year of accounts or it could be because their income can vary considerably from month-to-month and is quite difficult to prove.
Self employed mortgage applications are more common than you might think. It is often just the documentary ‘proof of income’ that differs with a self employed customer. Whereas an employed customer will be able to present payslips and a P60, a self employed customer may be required to obtain various documents from either their accountant or from HM Revenue and Customs.
A good mortgage broker will be able to tell you which lender will consider an application for you based on your own individual circumstances. For example, there are some lenders who will ask for a minimum of one years’ accounts but other lenders who will insist on a minimum of two years. It can take quite some time for a customer to research this themselves.
Once you know which lender you wish to place an application with, you will need to forward them your supporting documents, including proof of your income. Generally speaking, this will be your latest accounts (the number of years’ of accounts will be dependant upon the lender’s own criteria), your latest SA302 documents and your latest tax overview documents. The SA302 and tax overview documents are obtained from HM Revenue and Customs – usually using their self assessment service. Occasionally, where applicable, the lender will also write to your accountant.
So although it may be slightly more challenging to process a self-employed mortgage application, it is certainly not impossible.