Self-employed need 3 years of accounts-what figures do they base lending on?

debsleypig

With the new ban on self-cert mortgages, I was just wondering about the need for 3 (or 2?) years of accounts for self-employed people. WRT this, would the mortgage company base the amount they would lend on the last year of those 3 years (assuming the net profits had steadily increased over the 3 years), or on an average of the three years?

Any advice greatly appreciated.

Radsteral

hsbc took my 3 years average in order to calculate how much can i borrow.
. they dismissed me in 5 minutes and i too dismised them same day by moving all my money and accounts

other banks take different approach, you just need to have the papers with you when you go there so they can see them
Just tell them, to see if they can lend me provided whats on table now, but tell them not to do credit check.
or just do with 1 bank so you can get the mortgage prmose that you ll need , but when you find the house then check for best deal ..
if they all do credit check your credit rating ll get !!!!ed off

rcbishop14

They are not banned yet, when sorry if there is a change of goverment they wont be banned.

Dont use a bank please, use a mortgage broker.
I no very few if any banks running self cert schemes.

tomthelondoner

Different lenders will approach it differently. Some need three years accounts full stop, others are happy with two years and a projection, some even with one year and a projection. They usually use the figures from the last finalized year, or a projection, providing it is supported by bank statements. It also depends on whether you are a sole trader, a partnership or a limited company. If you have been self employed for less than 2-3 years it often helps if you have previously been employed (PAYE) within the same line of business - for instance you were employed as a dentist, and then opened your own private dentistry practise. Lenders also like IT contractors - some seem to have slightly more lenient rules for them....
The news today is just a draft to be consulted - it will be open for a debate until the end of January 2010. Even after that date, changes will not happen overnight, I suppose