Mortgages With One Years Accounts
Mortgages with one year’s accounts with Lee Gathercole and Neezam Romjon.
Can I get a mortgage with one year’s accounts?
Yes you can get a mortgage with one year’s accounts or twelve months worth of trading history, more specifically.
It can work in different ways, but twelve months of trading history is generally the minimum for most lenders. If you’re a Sole Trader, for example, they will look at this year’s net profit. If you’re a Limited Company Director, they’ll look at what salary and dividends you’ve taken over the last twelve months or use a set of accounts to establish your net profit figures, some lenders look before and some look after tax.
How do I prove my income with one year’s accounts?
If you’re a Sole Trader then your net profit is usually evidenced by your tax calculation, and company accounts are usually used if you’re a Limited Company Director or if you’re employed by an Umbrella Company.
How much can I borrow with one year’s accounts?
This will not be too dissimilar to someone who may be able to provide two or three years of accounts. Typically lenders are willing to lend around four and a half to five times your income, sometimes you can get a little bit more and with more specialist lenders.
Can I Remortgage with one year’s accounts?
Yes, you can. Whether you’re looking to buy or Remortgage, lenders tend to assess affordability in the same way. So it doesn’t really matter if you’re Remortgaging to raise capital or if you’re buying your first home, affordability is seen in a similar way.
There are so many different factors that can affect your ability to borrow, such as how much deposit you’ve got, your credit score, whether you’re buying or Remortgaging in just your name or as joint borrowers, how old you are and what the maximum term the lender will lend to you.
Your credit commitments, whether you’ve got any children and many other different variables will also impact this, which is why we always recommend speaking to a broker first so we can compare across the market and give you an idea on what you can borrow.
If I have Bad Credit then can I still get a mortgage with one year’s accounts?
Bad Credit is such a generic and ambiguous term, and could be anything from a missed payment five and a half years ago, to being in mortgage arrears right now. So it depends on the severity, and we’d usually explore this in your discovery call.
Most lenders will want you to have corrected those arrears or caught up on those missed payments before they’ll consider lending to you. The more recent it is, the more limited your options will be, whereas the further in the past, generally speaking, if you’ve since proved keeping up payment since then, some lenders will be happy with that.
Somebody who’s only got one year’s trading as a Self-Employed applicant and has bad credit coupled together, there may be two or three lenders available, as opposed to fifteen or twenty. A broker is best placed to understand your situation, understand the market and help you approach the right lenders the first time.
Rates are probably slightly higher with those lenders, and sometimes if you wait three, six, or maybe eighteen months, you may have access to slightly more competitive lenders.
Are there many lenders that lend with one year’s accounts?
One of the biggest challenges is finding the right lenders, but the good news is there are some high street banks who offer mortgages to applicants with one year’s accounts. There are some specialist lenders, and in our discovery call we will go over your situation in terms of income and how you’re set up as Self-Employed and usually be able to pinpoint some specific lenders, rates and options for you in that first call.
How do I apply for a mortgage with one year’s accounts?
It’s a very similar process, and preparation is key, so make sure you’ve got the documents that the lender is likely to ask us for. The only difference is it may take a bit longer than you expected, as it’s generally deemed as a high risk application if they’re basing affordability on one year’s trading from a Self-Employed applicant.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP WITH YOUR MORTGAGE REPAYMENTS