Getting a self-employed mortgage with one year of accounts or less

If you’re self-employed, lenders like to see as much evidence as possible that you’d be able to comfortably afford your monthly mortgage repayments.

It’s common for lenders to ask for at least three years’ worth of accounts before even considering your application. However, there are a few that may offer mortgages to those with just one year’s worth of accounts. There may even be some that will look at your application if you’ve been in business for only 9-10 months.

Your choice of lenders will be smaller in this situation, and you may only be offered inferior rates.

Nevertheless, you can still get a foot on the property ladder.

Tips to be approved for your mortgage application

Just because you find a lender that will consider applicants with one year of accounts, it doesn’t mean they’ll approve you.

In many cases, you’ll need to show more proof you’re a reliable borrower than an individual with three years of accounts.

Here are some tips to boost your odds of being approved for a mortgage with one year’s worth of accounts.

• Good income vs outgoings. As part of its affordability assessments, your lender will check your recent bank statements to compare your income to your outgoings. This is to ensure you can comfortably handle your mortgage repayments, as well as your other financial commitments. The more leeway between your income and outgoings, the better.
• Clear your debts. If you’re being charged interest on existing debt, this will harm your perceived affordability. Pay off as many debts as you can before applying for a mortgage.
• Fix your credit score. Your credit score is a numerical representation of your past reliability with financial commitments. If you make timely repayments on debts and bills, your credit score grows. If you go overdrawn or miss repayments, it plummets. Ensure your credit score is healthy by making all bill payments on time via direct debit. Making timely repayments on a credit-builder credit card can help your score grow even faster. You can check what your credit score is here.
• Refrain from making too many credit applications. Each time you apply for credit, the lender will credit check you, temporarily harming your credit score. It’s therefore best not to apply for too many financial products in the months leading up to your mortgage application.
• Reduce the amount of credit you have access to. Additional access to credit, perhaps from a business overdraft or business line of credit, can spook lenders. They see this as an opportunity for you to get into unmanageable debt, so it’s worth closing any products you no longer use.
• Amend mistakes on your credit report. If your credit report has errors on it, this could harm your mortgage application. You can check and amend your credit report by contacting any of the UK’s three major credit reference agencies – Experian, Equifax or TransUnion (Callcredit).
• Work with a professional mortgage adviser. These individuals will help you prepare your application and point you towards the most likely to approve someone in your circumstances.

Finder survey: Are you currently self-employed?

Written by

Matthew Boyle

Publisher

Matthew Boyle is a banking and mortgages publisher at Finder. He has a 7-year history of publishing helpful guides to assist consumers in making better decisions. In his spare time, you will find him walking in the Norfolk countryside admiring the local wildlife. See full bio

Matthew's expertise

Matthew has written 285 Finder guides across topics including:

• Helping first-time buyers apply for a mortgage
• Comparing bank accounts and highlighting useful features
• Publishing easy-to-understand guides