Can you get a mortgage if you’re self-employed and don’t yet have a full year of accounts?

Certainly, being self-employed and not having a full year of accounts can indeed present some challenges when applying for a mortgage. 

You are looking to borrow £350,000 based on a property valued of £500,000k with potential income of £150,000k per annum to purchase an off-plan property. 

Unfortunately there is not a straight forward answer, as it depends on a number of factors. There are some lenders who may consider 1 year’s accounts or Tax Overview with either SA302 or HMRC Tax Calculation when assessing affordability for a mortgage. 

Self-Employed Mortgages 

For directors of a limited company the salaried income plus dividends received will generally be used. Where the applicant(s) have a 100% share in the business, net profit figures can be used in addition to salaried income, as long as the funds are not held for a specific purpose such as tax bill, business expansion, etc. It therefore depends on your circumstances as to who we are likely to approach. 

You will need to provide 3 months business and personal bank statements. However, this will be very dependent on your business trading year, your previous employment or role and if you are in a position to provide projected second year trading accounts. If you were in the same line of work and have recently changed for tax purposes, some lenders may class this as continuous employment when they underwrite your mortgage application. 

Although not knowing your full financial position, it would appear, based on the information you have supplied that this something we can help you to explore in the future. My advice would be to get a signed copy of your trading accounts from your accountant if you have one and then talk to a member of the John Charcol team. As an Independent broker we have access to a wide range lenders including those that still manually underwrite cases and can therefore judge each application on its individual merits, so we who would be able to recommend the most suitable lender based upon your individual circumstances. 

You can read more on this type of mortgage on our self-employed mortgages guide. 

However, there are steps you can take to improve your chances of obtaining a mortgage in this situation: 

1. Keep detailed records - make sure you keep meticulous records of your income and expenses. This includes invoices, receipts, bank statements, and any other financial documents related to your business  
2. Speak with a mortgage broker - mortgage brokers specialise in helping individuals find suitable mortgage options, including those who are self-employed. They have access to a wide range of lenders and can help you find one that is more flexible with their requirements  
3. Provide evidence of income - even if you don't have a full year of accounts, you can still provide evidence of your income through other means. This might include bank statements showing regular deposits, contracts or client agreements, or a letter from your accountant confirming your income  
4. Consider a specialist lender - some lenders specialise in providing mortgages to self-employed individuals. These lenders may have more lenient criteria when it comes to assessing income and may be more willing to consider your application based on projections or other evidence of income  
5. Increase your deposit - a larger deposit can often improve your chances of securing a mortgage, especially if you're unable to provide a full year of accounts. Saving up a larger deposit demonstrates financial stability and reduces the lender's risk  
6. Demonstrate consistency - if you have a track record of steady income prior to becoming self-employed, provide evidence of this to the lender. Consistent income over time can help reassure lenders about your ability to repay the mortgage  
7. Consider joint applications - if you have a partner or spouse with more stable employment and income, you may consider applying for a joint mortgage. This can help strengthen your application and increase the likelihood of approval  
8. Seek professional advice - consider consulting with a mortgage broker who specialises in supporting self-employed individuals like John Charcol. We can provide personalised advice based on your specific circumstances and help you navigate the mortgage application process  

While obtaining a mortgage as a self-employed individual without a full year of accounts may require more effort and documentation, it is certainly possible with careful planning and the right approach. 

Give us a call on 0330 433 2927 for more help and information.