Self Employed Mortgages: How Many Years Accounts Do I Need?

Self Employed Mortgages: How Many Years Accounts Do I Need?

You may have heard that most lenders want to see at least two to three years’ worth of accounts from self-employed professionals attempting to obtain a mortgage. But what if you haven’t been trading for that long? Or you can only show income from the previous 12 months or so?

Luckily, with the help of a specialist mortgage broker, it’s still possible to get a self-employed mortgage, even if you don’t have years of accounts to show.

The type of mortgage you’re likely to be offered will depend on numerous factors, such as the amount of money you want to borrow, the value of the property you’re buying, your personal circumstances, and your credit history.

That being said, here are some general guidelines on the number of years’ worth of accounts self-employed applicants will need in order to get a mortgage.

Can You Get a Mortgage With 1 Years Accounts?

Yes. You could be reading this because you’ve been denied a mortgage due to a lack of trading history or because you’re thinking about applying but aren’t sure what a mortgage lender will require. It’s true that qualifying for a mortgage with less than two years’ of accounts is tough, but it’s still possible with the right lender.

For starters, most mainstream lenders will want to see at least two or three years of accounts before they’ll even consider your mortgage application. This is because they need to be able to verify your income and get an idea of your financial situation over a sustained period of time.

If you’ve only been self-employed for one year, it’s likely that a mainstream lender will reject your mortgage application outright. However, there are some specialist lenders who will be willing to consider your case – this is where specialist mortgage brokers can assist. With the correct specialist mortgage broker, they can place you in front of a lender who will be more sympathetic to your circumstances, increasing your likelihood of being approved for a mortgage.

What if You Haven’t Even Finished Your First Year of Trading?

If you haven’t finished a tax return for your first year, most lenders will not approve you for a mortgage. That being said, there are still a few niche lenders who may consider you for a mortgage before you’ve completed your first year in business.

Historically, mortgages without one year’s books haven’t existed because the lender must show that they have lent responsibly and that their approval is based on real evidence that you can unquestionably afford to repay what you borrow.

It’s not acceptable if you don’t have a legitimate proof of the tax you’ve paid, even if you’ve had a fantastic first six months and earned far more than you need. However, If you’re nearing the end of your first trading year, say at 9-10 months, it may still be worth submitting an initial application to get the mortgage authorised in principle.

  • There are lenders who will approve a mortgage at this point based on the information you’ve supplied.
  • Other lenders who require a full year of trading might be willing to sign the first initial agreement, provided you wait until your year is up before submitting the application in full.

Why is it More Difficult to Get a Mortgage if You’ve Been Self-Employed for a Short Time?

Self-employed borrowers tend to have a harder time getting approved for a mortgage since the lender might be unsure how much you make and, as a result, will consider you a higher risk when it comes to repaying what you owe. Most lenders consider individuals that have been self-employed for more than three years in the same way as an employed person.

As the number of start-up businesses in the UK continues to rise, so are the amount of self-employed individuals looking for a mortgage. The best way to place you in good stead for a mortgage if you’ve been self-employed for less than three years is to seek advice from a specialist mortgage broker who has access to the whole-of-market.

About the author


Kristi Lopez

Kristi Lopez is working as a professional news editor at The Next Hint, Inc. She is accustomed to finding daily reports. Therefore, this keen working and addiction towards her work, it helps her to find good news.

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