For self-employed individuals in the UK, securing a mortgage can sometimes feel more challenging than it is for traditional employees. However, if you have two years’ worth of accounts, you’re in a strong position to secure a mortgage. While lenders may scrutinize your financial records more closely than they would for someone in regular employment, many are open to working with self-employed applicants who can demonstrate a steady income.
This guide will explore how to navigate the mortgage process with two years of accounts, providing tips to strengthen your application and increase your chances of approval.
Can You Get a Mortgage with 2 Year’s Accounts?
Yes, having two years of accounts is typically enough to meet the requirements of many lenders in the UK. Most will ask for at least two years of trading history to evaluate your income stability and business performance. With this documentation, you’re more likely to access competitive mortgage rates and a wider range of lenders compared to someone with just one year of accounts.
What Lenders Look for in Self-Employed Applicants
To assess your mortgage application, lenders will focus on the following:
Your Income Stability: Lenders want to see steady or increasing income over the past two years and they may ask for recent business bank statements to assess more recent business levels.
Your Deposit Amount: A larger deposit (e.g., 15%-20%), makes you a lower-risk borrower.
Credit History: A strong credit score demonstrates your ability to manage financial commitments.
Business Viability: Evidence that your business is sustainable and profitable.
How to Strengthen Your Application
Here are some actionable steps to boost your chances of approval:
- Hire a Qualified Accountant
Lenders typically want to see your accounts prepared by a certified or chartered accountant. A professional accountant can ensure your financial records meet lender requirements. Look for accountants that are members of a professional body such as ICAEW or ACCA. - Provide a Strong SA302 and Tax Overview
The SA302 forms and accompanying tax year overviews from HMRC for the past two years to verify your declared income. Ensure these documents are up-to-date and accurate. - Boost Your Credit Score
Check your credit report for errors and take steps to improve your credit score. This may include reducing debt, paying bills on time, and avoiding new credit applications before applying for a mortgage. - Save for a Larger Deposit
A higher deposit not only increases your chances of approval but can also help you secure better mortgage rates. Aim for at least 10%-20% of the property’s value. - Work with a Mortgage Broker
A mortgage broker, like Mortgage Links, can connect you with lenders who specialise in working with self-employed applicants, simplifying the process and improving your chances of approval.
Why Choose Mortgage Links?
At Mortgage Links, we understand the unique challenges faced by self-employed individuals, and we’re here to guide you every step of the way. One of the key reasons to work with us is our expertise: one of our owners, James, is a qualified accountant with years of experience in senior accounting roles.
The Benefits of Working with an Accountant-Qualified Mortgage Broker
Deep Financial Understanding:
With a background in accounting, we can analyse your financial documents with precision, ensuring that your income, accounts and tax records are presented in the best possible way to lenders.
Tailored Solutions for Self-Employed Applicants:
Understanding the nuances of self-employment income such as dividends, retained profits and fluctuating earnings, allows us to match you with lenders who are more flexible and accommodating.
Accurate Preparation of Documents:
Misaligned or incomplete documentation is a common reason for mortgage delays or rejections. Our accounting expertise ensures your paperwork meets lender requirements, increasing the likelihood of a smooth approval process.
By combining mortgage industry knowledge with accounting expertise, Mortgage Links is uniquely positioned to offer self-employed individuals a seamless and stress-free journey toward home ownership.
Final Thoughts
Getting a mortgage with two years of accounts is more straightforward than you might think, especially with the right guidance and preparation. By working with a knowledgeable mortgage broker like Mortgage Links, you can simplify the process, find the best deals, and move one step closer to owning your dream home.
Ready to get started? Contact Mortgage Links today and let us help you secure the perfect mortgage solution for your needs.
