Mortgage With One Year’s Accounts
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- Working for you to find the right lender from a huge panel
- Designed to save you time (and a few headaches!)
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Get in touch for an initial fee free, no-obligation chat with an adviser about the most suitable mortgage option for you.
The Financial Conduct Authority does not regulate some Buy to Let Mortgages.
Your property may be repossessed if you do not keep up with your mortgage repayments.
Mortgage With One Year’s Accounts
- A team of down to earth mortgage advisers
- Working for you to find the right lender from a huge panel
- Designed to save you time (and a few headaches!)
Get in touch for an initial fee free, no-obligation chat with an adviser about the most suitable mortgage option for you.
Your property may be repossessed if you do not keep up with your mortgage repayments.
The Financial Conduct Authority does not regulate some Buy to Let Mortgages.
Mortgage With One Year’s Accounts
Anthony McQuilliam talks us through mortgages with one year’s accounts.
Can I get a mortgage with one year’s accounts?
Yes, you can, but it does limit your options. There are a lot of lenders that will look at a client’s most recent year’s accounts – which helps if your business has been a lot more profitable than previous years. But these lenders will also consider you if you’ve only been self-employed for one year.
How do I prove my income with one year’s accounts?
This depends on how your business is set up. If you’re a sole trader the lenders want to see your most recent year’s tax computations and tax year overviews. If you’re a limited company director, they will want to see these tax documents plus your most recent business accounts, as sent to HMRC.
How much can I borrow with one year’s accounts?
If you’re a sole trader the lender would look at your most recent year’s tax year overview and tax computations to see the profit you’ve earnt for the year. The lenders then multiply that by 4.5 to figure out how much you can borrow. They will still take into account your outgoings, such as credit cards, loans, car payments etc.
If you’re a limited company director it works slightly differently. Some lenders will look at the net profit from the business and also the salary you’ve paid yourself. That can usually give you a higher borrowing amount compared with basing it on what you’ve actually withdrawn from the business.
Again, they would use an income multiple on that net profit and director’s salary at 4.5 times to calculate how much you could borrow.
Can I remortgage with one year’s accounts?
Yes, of course. It’s exactly the same principle – the majority of lenders would still look at the 4.5 times income multiple to see how much you can borrow.
But let’s say you were employed when you took your mortgage out five years ago. Now you’re coming up to your remortgage and you’ve just recently set up a new business. If you haven’t made enough profit to borrow the amount you need to remortgage, you have the option to do a product transfer. This is simply staying with the same lender, which isn’t based on how much you earn. You will just move onto whatever new product is available.
The only problem is if that rate is expensive compared with other options. You may not have access to the cheapest deals in the market. But at least you can have an option to change your product and choose how long to fix your interest rate for.
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Our highly experienced Advisers are ready to help you with either buying or remortgaging a home, protecting your property and lifestyle along with saving you time and effort, ensuring you have a competitive deal right for you.
What if I have bad credit? Can I still get a mortgage with one year’s accounts?
Yes, of course. There’s a particular lender I have in mind that specialises in both bad credit and people with one year’s accounts. Also, if you’re a limited company director it’s one that uses your director’s salary plus your net profits.
It’s a lender that charges a slightly higher interest rate, and you would need more deposit – usually in the region of 10%. But if you’re happy with that and you really want to buy that dream property, a little bit more interest isn’t a problem as long as it’s affordable for you.
Are there many lenders that lend with one year’s accounts?
There are quite a lot of potential lenders, including high street names. Even if you have bad credit plus one year’s accounts, while it limits the options, there are a few different providers we can go to.
How do I apply for a mortgage with one year’s accounts?
The big issue if you’re doing this on your own is that you’ll have to speak to all the lenders individually. That would involve a mortgage appointment with each one to find out if they can lend to you with one year’s accounts. With a lot of lenders out it will be an out-and-out ‘no’.
That can consume so much time, especially as you need to be getting on with running your business. You won’t have time to rush around speaking to every lender. So the best way, in my opinion, is to speak to a mortgage broker. We specialise in this area and have helped a lot of people that have just started their own business to get mortgages.
We have the experience, knowledge and expertise to know which lenders are appropriate. We will save you so much time and money and let you concentrate on running your business.
What else do we need to consider for mortgages with one year’s accounts?
It certainly gives you a lot more options if you have two years’ accounts, but if you’ve found that dream property and desperately want a mortgage, it’s definitely doable. If we can get you in with a high street lender the rates may even be lower than you might expect.
Approved by The Openwork Partnership on Monday 24th April 2023.
Your home may be repossessed if you do not keep up with your mortgage repayments.
