Self employed without audited accounts and want a...

[Mermaid]

I wonder whether anyone can save me some time with this one...

My husband and I are buying a house, and we have enough cash to buy it outright, but some of our money is in fixed rate bonds paying 5% and cash ISA's which we'd like to keep. The value of the bonds and ISA's is about 20% of the value of the house.

I've had a long discussion with First Direct tonight, who won't even talk to us as we don't have audited accounts, which is a shame as we'd love their 2.29% mortgage with no penalty for repayments and a £199 set up fee.

When we got our last mortgage, we supplied certified proof of income from the tax office.

Does anyone know of a mortgage we can get that is low rate, where we don't have to supply audited accounts? I'll be making lots of phone calls tomorrow, and it would help if I could target the most helpful banks etc. first.

Many thanks,

Mermaid

[kingstreet]

Looking at Halifax and Abbey criteria, Halifax say they will accept SA302s in lieu of accounts, from self-employed applicants.

Abbey reads "latest self-assessment returns and tax calculation forms" for 90%+ lending and "Tax calculation forms" for less than 90%.

I guess if the top two will take your SA302s, a fair few after that will follow suit.

Nationwide, just to be curmudgeonly, demands an Accountant's Certificate.

[Crashandburn]

Order your SA302s for the last 3 years ASAP. Taking about 6-7 days to come out now.

ING will use the SA302s with a 2.5% deal

[Leon W]

Most lenders do not require audited accounts.

Are you sure they need accounts audited ? Most self employed people turn over less than £6.5 mill and have less than 50 employees which is the general cut off point for audited accounts.

Seems a bit silly to me.

[pan_kaj]

Do you know if HSBC insists to see audited accounts?
My mortgage application is due this week....

If they dont accept unaudited accounts what options do we have?
Is there anything we can provide (other than audited accounts) that can make up?

[kingstreet]

What Leon said!

It isn't normal for accounts to be audited, unless you're a plc.

Accounts prepared and signed off by an accountant are normally fine for mortgage purposes. Check the lender's list of acceptable accountancy qualifications against your accountant's credentials.

[Tribulation]

We just re-mortgaged with the Halifax (through a broker).

Wife is self employed, all they needed was last 3 months bank statements showing money coming in (which while we were honest, surely this is open to abuse, ie looking to move in 6 months, hold back money for 3 months then artificially inflate money going into bank over following 3 months).

Broker said that they can fast track (or something like that) the mortgage where they check our finances on the Halifax's behalf, and they said they can accept methods the Halifax wouldn't if we went to them direct.

Took about 3 weeks from us enquiring to completing and 1 week was waiting for my existing mortgage provider to get their act together and submit final settlement figure.

Bearing in mind I'm on benefits due to ill health, our existing mortgage was with a sub prime lender, our credit cards are nearly maxed out, Halifax tried to sue me 12 years ago and the ombudsman ruled in our favour setting a new precedence, I didn't think we had any chance, but it sailed through.

[stavros1981]

Having just got a mortgage with HSBC, they only wanted to see the tax returns for my wife. She is self employed and wanted the last 3 years tax returns. did not want to go into the full accounts I had prepared in readiness.

hope this helps

S

[dunstonh]

Wife is self employed, all they needed was last 3 months bank statements showing money coming in (which while we were honest, surely this is open to abuse, ie looking to move in 6 months, hold back money for 3 months then artificially inflate money going into bank over following 3 months).

Broker said that they can fast track (or something like that) the mortgage where they check our finances on the Halifax's behalf, and they said they can accept methods the Halifax wouldn't if we went to them direct.

If you are pushing lending criteria, then you have to prove more. If you are way within lending criteria and have plenty of room to spare then you are asked to prove less.

[Indecisionismymiddlename]

First Direct are a bit confused about audited accounts. It seems to depend who you speak to in their for them to understand the difference between audited and approved by an accountant.

they're not particularly friendly to the self employed in my experience, probably because they've got such a good offering they can afford to be choosy.

[kingstreet]

Originally Posted by Tribulation

surely this is open to abuse, ie looking to move in 6 months, hold back money for 3 months then artificially inflate money going into bank over following 3 months).

Broker said that they can fast track (or something like that) the mortgage where they check our finances on the Halifax's behalf, and they said they can accept methods the Halifax wouldn't if we went to them direct

The broker has anticipated you being accepted onto fast-track which means your loan to value and credit score is enough for Halifax to not ask for the usual status requirements like accounts, bank statements and payslips.

However, they sample an increasing number of cases to ensure the declared income is true and can be verified. So you can pass credit score, go on fast track, get a formal mortgage offer, then your case is called for audit and you are asked to provide all the evidence you would have required on a normal case. The hunter system logs cases where these requests are made and the application is subsequently cancelled.

The broker can find himself without an agency with too many of these and where further applications for the same customer record an income which is different in each case.

Your broker is using fast-track as a backdoor route to self-certification of income and with the level of monitoring which now takes place, this is fraught with danger for the broker and the borrower. For example, before I place a case with a lender, I ensure I have certified copies of all the status requirements the lender might have as I'm required to be able to provide confirmation of income if it is requested. No one case is worth my career. Some brokers seem to ignore the penalty for falsified records.