With the number of people in self-employment reaching an all-time high in the UK it might seem surprising that at Domus we regard this as a special situation.
In recent years as lenders have tightened criteria and become far more meticulous in the way they process and underwrite mortgage applications it is the self-employed as a buyer type who have suffered the most.
It is so much easier for a lender to assess the taxed income of an employed person. 3 month’s pay slips and maybe a P60 should suffice for most employed people. How would a bank assess the taxed income of a self-employed person? To start with accounts are produced annually and the tax paid on that income is normally paid twice yearly. From an HMRC perspective there are certain rules for how long after a company’s year end the accounts must be finalised and the tax paid. Unfortunately these rules, which all self-employed people adhere to by law, will often make it much harder for a self-employed person to get a mortgage.
From a lenders perspective all they are interested in is accurately determining your income and then assessing your ability to afford a loan based on your other commitments.
How old are your most recent accounts? Were they prepared by a chartered accountant? Is your net profit increasing or decreasing? How do you pay yourself, maybe with salary and dividends? Do you retain any profit each year? Not to even mention how many years have you been trading and how many years finalised accounts do you have?
In our experience the whole process of getting a mortgage nowadays as a self-employed person is that much more involved. As a result it is imperative to be dealing with a broker who really knows their stuff and has sufficient attention to detail to make sure your deal is placed with the lender who will look most favourably at your case to give you the borrowing you need on the most preferential terms and will process your application in the shortest timeframes.
At Domus finance we have the experience and detail orientated approach with all our clients to ensure you will also receive the very best advice and highest service available.
To find out more please call us on 020 3393 4333 or email us at email@example.com.